24 Mar Portugal’s Golden Visa – updates extended to January 2022
In view of the recent turn of events, the Portugal government has taken a decision to extend the deadline for the country’s Golden Visa restrictions to the beginning of next year. Pre-planned for July 2021, the amendments sought to curb the money-spinning investments in the area.
The postponement of the restrictions makes it a ripe time to invest in the dense areas of Lisbon, Porto and Algarve, along with the coastal spaces in Setubal and Silver Coast. The changes were structured towards increasing the minimum capital investments in the country. Let’s dive deeper into how this creates an opportunity for you.
What is the “Golden Visa”?
The authorizations for residency of investment (or popularly known as ARI) was incepted in the year 2012. The scheme came into place as a revival route from the global financial crisis that gripped Portugal and the world in 2008. With economies going for a free fall, Portugal’s situation worsened, thanks to the 2003 recession that kept the country stagnant for a while.
While internal affairs were set in order, the nation needed outside stimulus to get back on its feet. This is when “Golden Visa” came into the picture. Ever since its introduction, it has amassed a wealth of almost €6 billion for Portugal.
Who qualifies for the Golden Visa?
The qualification criteria for the Golden Visa is a three-ended scheme with a blanket condition. The constant requirement is that the investor should live outside of the EU, EEA and Switzerland as well as hold no criminal record whatsoever.
Next up come the three options to acquire the visa. You can choose from a real estate or venture capital fund investment, transfer capital for forming a company that creates at least 5 new jobs or issue a donation to the state for research or national heritage.
Investment in the real estate sector became quite a lucrative affair with the initiative. The bar was set as low as €500,000 in high-density areas or €400,000 in low-density regions for property all across Portugal.
How does it benefit you?
As the name suggests, Golden Visa essentially provides you with a residential permit upon investment. Upon completing the eligibility conditions for five consecutive years, you can apply for Portuguese citizenship without the need for permanent residency. Nevertheless, as an investor, you do need to spend a week in the first year and two weeks in the next two years to retain the allowance.
During the said 5 years, you are permitted to visit the country and any of the Schengen states completely visa-free. It also comes with an optional right to live and work in Portugal. The cherry on the cake here is that not only but also your immediate family members can be a part of the visa application.
There are virtually no taxation issues with the whole scheme. In an extraordinary case, where you spend more than 183 days of a year in the country and are tagged as a tax resident, there are exemptions to be availed via the Non-Habitual Residency programme for the first 10 years of such residency.
What are the changes to be enforced then?
In an attempt to promote a balance of investment and habitational properties in the interior areas, the residential criteria for the regions of Lisbon, Porto, and Algarve shall be barred.
The qualifying amount for the other places is also set to rise to €500,000 in line with the new law. The investment required for donation purposes or business ventures would hold similar increments as well. For instance, the minimum capital transfer has been raised from €1 million to €1.5 million.
This loosely translates to the time till 1 January 2021 being a golden window to bank on the property and visa benefits of the scheme at hand. Any applications submitted before the date shall be considered within the old rules, saving you a ton of money from the get-go.
Surprisingly, the new restrictions do not apply to any commercial properties in highly-dense areas, giving the real estate sector a much-needed relief.