Portugal Golden Visa: Beware, big changes in 2022

Portugal has it all: sunshine, lifestyle, culture, and easy access to the rest of Europe. Like many countries, Portugal offers a route to residency and citizenship for foreigners who can invest in their economy. In this article, we’ll explain the details of the Portugal Golden Visa, Portugal’s residency by investment program.

We’ll cover the requirements, the application process, and how it can lead to Portugal citizenship by investment. Finally, we’ll highlight the significant changes coming in January 2022 and why now may be the right time to apply.

The Golden Visa is a Residency by Investment program

The Portugal Golden Visa Program or investment visa is the most popular scheme in Europe. Be aware; there is no direct Portugal Citizenship by Investment (CBI) program. The Golden Visa grants residency by investment (RBI) and provides a route to Portugal citizenship by naturalization.

Portugal’s Golden Visa

The Portugal Golden Visa Program was established in 2012. It attracts many people from around the world with its favorable terms and conditions. In Portuguese, it is called Autorização de Residência para Atividade de Investimento (ARI).

It was established to promote investment into the country from non-EU/EEA citizens. It has been well managed and supported by both sides of politics in Portugal. And, this means it doesn’t have the issues of some other RBI and CBI programs that worry the OECD and EU.

As of March 2021, over 25,000 people were granted residence permits as a part of the Golden Visa program. As a result, Portugal was able to credit over €5.7 billion from investments linked to the program.

Some cool facts about the program (up to March 2021).

• There have been 9,617 primary applicants and 16,372 family members.
• Top countries are Brazil, China, Russia, Turkey, South Africa, and the USA.
• 94% of applications are for property purchases.
• Since BREXIT, inquiries from UK citizens have increased dramatically.

The massive injection of investment has been welcomed. However, the concentration in certain areas has caused concern. There are significant changes to the program coming in January 2022 to address this, and we’ll cover all the details below.

Portugal Citizenship by Investment (CBI) doesn’t exist

Portuguese citizenship cannot be directly granted through investment. However, you can apply for naturalization five years after gaining residency through the Golden Visa.

Advantages of the Portuguese Golden Visa

Family Benefits

Dependent family members can also be included in the application for a Golden Visa:

• Spouse or legal partner.
• Children under eighteen years old.
• Dependent children under twenty-six (must be single and full-time students or can demonstrate full financial dependence on the parents).
• Parents of either spouse over sixty-six years old (can be fifty-five if dependent).
• Siblings under eighteen years old from either spouse if the applicant is designated as the legal guardian by the courts.

Tax Benefits

Golden Visa holders have the option to become non-habitual residents (NHR) of Portugal. This NHR scheme offers:

• Reduced tax to new residents for their first ten years in the country.
• Some foreign income tax-free.

The NHR ruling can be a massive saving for many people and makes Portugal an attractive financial option.

Pathway to Portuguese Citizenship

The Portugal Golden Visa is one way of gaining EU citizenship for yourself and your dependents. In addition to having been resident for five years, you need to pass a language test.

Once you have been granted citizenship, you can apply for a Portuguese passport. Portugal offers dual citizenship, so you wouldn’t have to relinquish your existing passport.

Access to the Schengen Zone, EU, and EEA.

Residency gives you visa-free access to travel to the SCHENGEN region. A Portuguese passport lets you work and live anywhere European Union (EU) and the European Economic Area (EEA).

Access to Benefits

Portugal has a low cost of living compared to other countries such as the USA. A part of this is that residents and citizens have access to the Portuguese national healthcare system (Serviço Nacional de Saúde).

Families also have access to Portugal’s excellent education system.

Work Opportunities

The Portugal Golden Visa gives you the right to work in Portugal. And, it also allows you to start a business or work remotely for a foreign company.

You get to live in one of the most beautiful EU countries

Portugal consistently ranks as one of the top Expat countries in the EU and the world. Check out our article on Living in Portugal for all the reasons why.

Investment Options for the Golden Visa

There are currently three investment options to qualify for a Portugal Golden Visa. The property option is by far the most popular, accounting for almost 94% of applications.

Portuguese Property Investment

You must purchase a qualifying property in Portugal. You need to purchase the property outright, without a loan or mortgage. You can purchase multiple properties to make up the minimum investment level.

You can purchase a property as your personal residence or as an investment property to let.

Current rules

There are three categories with different investment levels

1. €280,000 Existing properties requiring renovation in low-density areas.
2. €350,000 Existing properties or properties located in urban regeneration areas.
3. €500,000 for all other properties in Portugal.

The property does not have to be a residential home to qualify for the program, although this is a popular choice. Commercial properties are also valid as long as they meet the minimum value.

From January 2022, there will be significant changes to the scheme. This includes limitations on where investment properties can be located and an increased investment threshold. Please see the section below for details.

Is Property in Portugal a Good Investment?

The Portuguese property market is currently stable. Some areas are showing promising growth that should offer a good return for investors over the coming years. This includes certain cities and coastal areas that are popular with Expats and holidaymakers.

However, properties in these popular areas, including Lisbon and Porto, will no longer qualify for the Portugal Golden Visa from January 2022.

Investors will need to choose properties wisely, but with care experts believe there will be quality investments available.

Capital Investment in the Portuguese economy

• Capital transfer of at least €1 million.
• €350,000 into private equity or venture capital funds providing capital to specified companies.
• €350,000 for companies in the national scientific or technological system.
• €350,000 to increase or incorporate the share capital of a Portuguese company. This must also lead to the creation of five permanent jobs for at least three years.
• €250,000 investment in Portuguese arts or cultural heritage.

Start a company and employ Portuguese nationals

There is also an option with no minimum investment level. You can qualify by being an investor in a business that creates at least ten jobs for at least five years.

Golden Visa Residency Requirements

The residency requirements for the Golden Visa are not hard to meet. You must spend at least seven days per year in Portugal, or fourteen days over a two-year residence period.

Changes to the Portugal Golden Visa in January 2022

Changes to the Portugal Golden Visa program come into effect in January 2022 (after a delay in 2021).

Any applications already in progress by that date only need to meet existing terms. If you want to benefit from the current rules, the time to apply is now!

The changes will not impact renewals of existing Golden visas.

2022 changes to Real Estate Investment option

The biggest change is that the program will exclude properties in high-density areas. And that includes popular areas like Lisbon, Porto, the Algarve, and high-density coastal towns like Setubal and the Silver Coast. The government aims to focus investment into low-density regions, including the Azores, Madeira, and the country’s interior.

There are no changes to the property investment thresholds.

2022 changes to Capital Investment options

• Capital transfer of at least €1.5 million (up from €1 million).
• €500,000 into private equity or venture capital funds providing capital to specified companies (up from €350,000).
• €500,000 for companies in the national scientific or technological system (up from €350,000).
• €500,000 (up from €350,000) to increase or incorporate the share capital of a Portuguese company. This existing business investment should lead to the creation of five permanent jobs for at least three years.

These tighter restrictions and increased thresholds are coming into play for all new applications made from January 2022. We recommend that you make the investment and apply for the POrtugal Golden Visa before the changes go into effect.

The Portugal Golden Visa Application Process

It’s wise to be aware of all the Golden Visa application process steps before you start. The process can be complicated, especially if it is the first time you are applying, but don’t let that put you off. If you would like an experienced hand to take care of the process for you, our expert Portugal Immigration partners are ready to help. You can book a no-obligation consultation here.

• Before application: Preparation of all necessary documents, including investment documents and documents for dependent/s. All documents will need to be in Portuguese. You will need approved translations of any foreign documents.
• Tax Requirement: You will have to obtain a tax identification number (NIF) and then open a bank account.
• Investment: Secure your investment in real estate or another application investment class. You need to have made the investment before you can make the Golden Visa application.
• Application: Submit all the necessary documents with the application form for review. You also have to pay the fees for the application.
• Approval or Denial and Issuance: The authorities will notify you when they have processed your application. It can take up to four months to issue a Golden Visa.

To complete the process, you will need to book an appointment date with a SEF office. Appointment availability can vary between centers, but a change means your appointment can be in any SEF office.

Online Application

As a result of COVID-19 and travel restrictions, the Portuguese government has almost wholly digitalized the application process. Everything is done online, from the submission of documents to the issuance of your tax file number (NIF).

There is just a biometrics appointment that you must attend in person for your residence card.

Validity of the Portugal Golden Visa

Portugal temporary residence cards have a validity of two years from the date of issuance. This means that you only need to apply for renewal every two years instead of every year.

You can apply for Portuguese citizenship or PR after five years. If you choose not to, you’ll need to renew the residency permit by the sixth year of your stay.

Timeline

• Year 1: Golden Visa and residence permits are issued.
• End of Year 2: Renewal of the residence permit.
• End of Year 4: Renewal of the residence permit.
• Year 5: Applicant is eligible to apply for citizenship and passport or Portugal permanent residency.
• End of Year 6: Renewal of the residence permit (if you have not taken the citizenship or PR route).

Golden Visa Fees

The Portuguese government charges a processing fee of €517 for the principal applicant. There is an additional fee of €80 per additional family member.

There is also a charge to issue the Golden Visa of €5,202 per applicant.

Which Golden Visa is better: Spain or Portugal?

The short answer is that both visas are good, but there are some important differences that might your decision.

Under the current system, Portugal offers its Golden Visa at a lower investment level than Spain. Where Spain requires a minimum property investment of €500,000 Portugal’s level of €280,000 is available in some cases.

There are also differences in the path to residency and citizenship, particularly in residence requirements. For Spain’s Golden Visa to be renewed, you only have to visit the country once a year, at the time of the renewal. For Portugal’s Golden Visa, this requirement is 14 days per year.

In both countries, permanent residence is offered after five years.

But the path to citizenship by investment in Spain is more complex. After five years on a temporary residence permit, you can apply for permanent residence. You then need to spend 6 months of every year in Spain to maintain your status as a permanent resident. After an additional five years, you can apply for Spanish citizenship.

In Portugal, on the other hand, you can qualify for citizenship at the same time as permanent residence. That means you could become a Portuguese citizen just five years after moving to the country on the Portugal Golden Visa. Portugal’s citizenship also has some clear advantages.

D7 Passive Income Visa or Golden Visa

The D7 is another popular visa for non-EU and EEA citizens. If you don’t want to make a large investment in Portugal, it can be another good option.

It does have a higher residency requirement of four months per year but is still a good path to citizenship.

Check out all the details of Portugal’s D7 passive income visa in our article.

Conclusion

Applying for a Portugal Golden Visa takes time and money. However, once yours is approved, you can enjoy the beauty of this wonderful country and its benefits.

Considering the changes to the scheme that will occur from January 2022, there are significant advantages to applying in 2021. If you want to get the process started, our expert lawyers are happy to help guide you. You can book a no-obligation consultation here.