Are you interested in acquiring a Portuguese residence permit via investment into real estate in Lisbon or Porto? If so, you had better hurry!
The Portuguese authorities are planning to exclude these two cities where foreigners can buy property under the Golden Visa program. The transition period will start on June 1, 2021. This means that if you procrastinate, you will have to look for some other property to invest in if you want to qualify for the Portuguese golden visa.
A number of states offer the opportunity to obtain a ‘golden visa’- that is, in effect, a residence permit that is granted to the foreign national who makes some investment into the country: buys real property, starts a business venture, makes a bank deposit, and so on.
Unsurprisingly, the interest in such opportunities on the part of well-to-do individuals has grown due to the Covid-19 pandemic. Wealthy people are concerned about ways to preserve their cross-border mobility.
Portugal’s golden visa remains one the most attractive offers on the market. It is a fantastic chance to acquire legal residence in the European Union of which Portugal is an integral part. However, the popularity of this immigration product has backfired in a sense. The inflow of foreigners wishing to obtain Portuguese residence by purchasing property in Lisbon and Porto has ‘overheated’ the real estate market in these cities. The authorities of the country are soon going to remove property in Lisbon and Porto from the Portuguese golden visa program.
Please bear in mind that as a Portuguese residence permit holder you do not have to live full time in the country. 7 Days per year is enough.
Requirements for obtaining Portuguese residence will change soon
In December last year, the Portuguese Council of Ministers introduced amendments to the relevant legislation in an attempt to redirect foreign investments from large cities and coastal areas to more sparsely populated regions and autonomous island regions such as the Azores and Madeira.
The amendments are also aimed at attracting foreign investments to socially and culturally important projects. The local authorities would like to see foreigners putting money into city renovation, cultural heritage, ecologically oriented projects, production industry development, business ventures that will create new jobs, and other suchlike areas.
The changes to the legislation are not going into force overnight. The authorities will start a ‘transition period’ on June 1, 2021. The transition period will last until 2022 but the exact end date has not been announced yet.
The Portuguese Council of Ministers believes that the amendments are well grounded as the situation has changed since the golden visa program was launched in 2012. Spokespersons for the Council emphasize that the changes will not affect the existing golden visa holders in any way.
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This means that the new rules of acquiring legal residence in Portugal will not affect:
The extension of previously issued golden visas;
Issuance of visas to the foreign nationals who have submitted their applications before the end date.
Political rhetoric can have an impact on practical decisions
The discussions about the amendments started in early spring of 2020. When the public learnt about the upcoming changes to the legislation through the mass media, the demand for real property in Lisbon and Porto grew dramatically. InternationalWealth reported about it at that time.
However, the Covid-19 crisis evolved and it made the Portuguese Government officials postpone introducing the amendments until later. Now it looks like the ‘X’ hour has come.
The decision has not been finalized so far but some clarity about the situation is already there. Prospective foreign investors in Portuguese property understand that they have two options available:
First, purchase property in Lisbon or in the second largest city of Porto immediately thus qualifying for legal residence in Portugal and in the rest of the EU.
Second, look for other investment objects. These are available: you can invest into real estate in rural areas or in underdeveloped areas. Besides, you can purchase a building that needs restoring. The required investment amount is going to be lower in these cases.
Alternatives to acquiring legal residence in Portugal
The Portuguese golden visa program looks attractive indeed. However, there are other opportunities to acquire legal residence in Europe or in another prosperous part of the world. Let us briefly describe four such opportunities that deserve some special attention.
Malta: legal residence and citizenship by investment
The Maltese legislation allows foreigners to acquire legal residence and even full citizenship of the country in exchange for investments into property there. Becoming a citizen of Malta takes about a year while a residence permit can be obtained faster.
What is especially attractive about this small island country located between Europe and Africa? First, Malta is an EU member. Second, you can apply for legal residence in the country before purchasing the real estate. In some other countries, you have to buy property first and only after that, you can apply for legal residence. Third, you do not have to travel to Malta in order to acquire the residence permit. The property can be purchased remotely and the residence card can be shipped to wherever you are. This is especially important when the freedom of movement is restricted so much.
The immigration opportunities that Malta offers are not cheap (the price of the real property to buy starts at 250,000 euros). At the same time, the program requirements are quite clear and transparent and the Maltese residence card let alone the Maltese passport is a document that will fully legalize your presence in Europe for an unlimited amount of time.
Spanish golden visa
Spain is similar to Portugal and Malta in that it also has a residence-by-investment program and it is also very comfortable to be a Spanish legal resident. It is a well-developed economy and the living standards in Spain are high.
Acquiring legal residence in the country does not take too much time. The foreign investor has to put at least 500,000 euros into real estate in Spain in order to qualify for a residence permit. If you would like to become a full citizen of the country, you have to live there for ten years on the residence permit while spending more than six months of every year in Spain. If you do so, you will automatically turn into a tax resident in Spain too. On the other hand, if you simply want to retain your golden visa, you do not have to live in Spain. Keeping your real property there will suffice for extending the visa.
Montenegrin legal residence and citizenship
If you are prepared to consider a European country that is not an EU member yet, then you should turn your eyes to Montenegro in the Balkans. The country expects to join the European Union by 2025. Currently, 125 visa-free destinations are available with a Montenegrin passport including the EU and Schengen zone countries.
Montenegro makes some lucrative offers to foreign investors. You will qualify for legal residence in the country if you buy any residential accommodations there: the price of the property is not specified.
In addition to that, you can become eligible for full citizenship of Montenegro by investment. You have to buy property in the northern mountain regions for 250,000 euros or property on the coast for 450,000. Whichever option you choose, you will have to make a donation of 100,000 euros to the state fund in order to qualify for citizenship of Montenegro. Various fees and state duties have to be added to these costs.
Living in Montenegro is much less expensive that living in an EU country. At the same time, the living standards are quite high in Montenegro, the nature is beautiful, and the people are friendly. It takes not more than two hours to fly from the capital city of Podgorica to any large European city. Acquiring the passport of Montenegro takes about three months since the date of filing the application for citizenship.
Caribbean legal residence and citizenship
There are countries outside Europe that offer a very comfortable lifestyle too. The islands in the Caribbean basin, for example, are often referred to as ‘paradise islands’. Some Caribbean states welcome foreign investors and grant them residence permits and passports if they put some money into their economies.
For example, the Cayman Islands grant legal residence permits to foreigners buying accommodational property there. The living standards in the country are exceptionally high, the climate is just perfect, the financial sector of the economy is well-developed, and no direct taxes are levied. If paradise on earth exists, it is the Caymans.
Acquiring legal residence in the Cayman Islands is expensive though. You have to purchase property that is worth at least 2.4 million US dollars to qualify for a permanent residence permit. If you live in the country for five years on the permit, you will become eligible for full citizenship there.
Expert support in acquiring golden visas
The current situation in the world shows that not all countries can withstand the crisis equally well. This fact has pushed the demand for foreign citizenship and legal residence permits. If you can afford it, purchasing a second passport or acquiring a golden visa is more of a necessity these days than a whim.
Please apply for our professional support in acquiring a golden visa in Portugal or elsewhere. InternationalWealth experts will help you find the optimal solution and choose the foreign country that appeals to you most of all. Please contact us by email, WhatsApp, or online chat and request a free personalized consultation on the matter!
How has the Covid-19 pandemic affected the demand for the Portuguese golden visa?
Even though travel is restricted in Europe and the rest of the world, the golden visa market has been booming over the recent months and this is true for the Portuguese golden visa program too. This is attributable to the increased desire of wealthy people to build a safety net and feel better protected from crises such as the current one.
Should I invest into real property in rural areas of Portugal?
One obvious advantage of this investment option is the low required investment amount: it starts at 280,000 euros. Low rent potential and low liquidity are the two most evident disadvantages. Experts agree that this option will suit pensioners who would like to spend their golden years in a peaceful environment in Portugal or those investors who would like to economize on the Portuguese golden visa.
What investment options are available in Portugal as far as real property is concerned?
To qualify for a golden visa you have to invest at least 500,000 euros in newly built or relatively new real estate. If you buy property that is over 30 years old, a discount of 150,000 euros is available. In both cases, you can qualify for an additional 20% discount if you purchase property in a rural (sparsely populated/ economically disadvantaged) area in Portugal.