Everything you need to know about the Golden Visa

By March 25, 2020 March 27th, 2020 News

The Golden Visa in Portugal is designed to bring in investment from non-EU/EFTA nationals and boost the domestic economy. The visa is also commonly referred to as the Resident Permits for Investment, as it fast-tracks Portuguese residency at a cost.

Since its launch in 2012 more than 4,200 Portuguese Golden visas have been given out representing an injection of more than 2.5 billion into the Portuguese economy.

Golden Visa Portugal: 2020 UPDATE:

The Portuguese parliament recently passed a budget proposal on changes to the Golden Visa investment options. These changes will exclude properties in the center of Lisbon, Porto and (potentially) all other coastal areas.

The actual rule changes are not yet clear and government representatives have suggested new rules will not come into effect until the second half of 2020.

Unfortunately the information about the Portuguese Golden Visa is often unreliable or out of date. When writing this guide we worked closely with our independent specialist lawyer Miguel – with years of experience assisting clients with their Golden Visa, our real estate partner as well as fund managers, and immigration consultants.

In this guide we will provide you with practical and up-to-date information on the programs requirements, investment options and recent changes. As well as how to prepare, apply and renew the Golden Visa Portugal.

We hope you find it useful.

Table of Contents

According to the Portuguese Border Service (SEF), 2019 has seen almost €500 million invested in just seven months.

The Golden Visa Portugal program is one of the most popular both in Europe and the world, and for good reasons:

  • Portugal Golden Visa offers a fast track to obtaining both permanent residency and citizenship in 5-6 years via a range of relatively affordable investment options.
  • The program is not blacklisted by the OECD, unlike many other Golden Visa programs.
  • If Golden Visa holders live in Portugal less than 183 days a year they are exempt from paying tax on worldwide income.
  • Required time spent in Portugal average only 7 days in the first year and 14 days in each year after.
  • Once you become a citizen you can live and work anywhere in the EU/EEA – visa free with the 4th best passport in the world for nomads and global citizens.
  • You have the security of a second residence in a safe and stable country.
  • Your dependent children and dependent parents will also qualify for the same benefits as you.
  • Portugal is a safe and stable country with good healthcare and education, affordable quality of life, well- connected and stress free airports, the best climate in continental Europe and of course the wild surf of the Atlantic ocean.

1.3 Who is eligible for the Golden Visa?

Most of the Golden Visas issued to date have been given to Chinese nationals followed by Brazilians, South Africans, Turkish and Russian citizens.

Anyone except Portuguese and EU/EFTA citizens can apply for the Portuguese Golden Visa after completing a suitable investment in Portugal.

The Portuguese Golden Visa is a particularly good option for American citizens looking to invest, as foreign-owned real estate is not a reportable financial asset in the US.

American business owners can also qualify for the Portugal Golden Visa program by expanding their existing businesses to Portugal.

Furthermore, the Portugal Golden Visa program can be a good option for Americans who are looking to renounce their US citizenship, owing to the country’s generous tax incentives.

If you are a US citizen looking to relocate to Portugal download our article on 5 things every expat needs to know BEFORE they move to Portugal.

1.4 What requirements do you need to meet for the Golden Visa Portugal?

  1. The investment needs to be made and maintained for a minimum of five years.
  2. You need to spend a minimum of seven days in Portugal for the first year. Then not less than 14 days in each subsequent two year period (this is called the stay requirement)
  3. Have a clean criminal record.

The lowest cost route: Portuguese company with 10 employees

Starting and running a company in Portugal for 5 years doesn’t sound like an easy route – but it can be easy with much cheaper upfront costs than any of the other routes. One can also invest in an already existing company

This option has not been seen as popular as investing in real estate or an investment fund. Investors are looking for residency and eventually citizenship without having to spend a lot of time in the country actually managing their investment.

Our specialist legal team Lexco PT Lda can assist in this option from A-Z. E: geral@lexco.pt

An example can be an initial upfront payment of €75,000 to incorporate and maintain the aforementioned company (10 employees will be hired), so as to meet all regulatory and judicial requirements, the investor then further, contributes another €50,000 in capital (for a total of €125,000). Lexco then takes care of all the day to day practical issues such as incorporation, hiring, accounting, etc. They also make sure that your complete GV process is carried out in the most professional manner. The goal is for your company to generate enough profit to cover the initial investment.

Last but not least.

Direct real estate investment

A real estate investment might make more sense for you particularly if you plan to buy a property where you intend to live yourself.

Buying property in Portugal is open to anyone, with no restrictions on your nationality or residency. You’ll still need to get your Portuguese tax number first.

We partner with UNU Luxury – a company offering rentals, sales, finance and more. They are not a traditional real estate broker (although they are licensed as one) – rather they are a full service provider for real estate purchases in Portugal. In short, they will help you find the best real estate in Portugal, at the best price.

If you already found some potential properties they can also help you evaluate your options, accompany you to viewings, negotiate the price on your behalf and much more.

1.5 2020 Portugal Golden Visa Changes and how they impact existing investments

The Portugal Golden Visa program application can be submitted in person by the applicant or by an appointed legal representative, we always recommend working with a lawyer. Here at RHJ our specialist legal team have a wealth of knowledge and experience in processing Golden Visa applications for our clients.

Book a call with an advisor today to get all the up to date info you need to make the application a smooth and stress free process.

You can choose from a range of relatively affordable investment options the following are the best options for most people:

  • Real estate investment starting at €280,000 if located in a low-density area
  • Portugal Golden Visa €350,000 minimum investment into a private equity or venture capital fund is a convenient option.
  • And the latest new method requires only €125,000 upfront investment.

Will the changes impact existing investments?

In a word, no.

Existing investors will be “grandfathered” into the old rules. However, there are two uncertainties:

  1. What the cutoff date will be for being granted the Golden Visa according to the old rules.
  2. What stage of the process you need to have reached when the cutoff date comes around.

Regarding the cutoff date, the worst case scenario would be as soon as the budget is ratified by the president (likely end of February 2020 so any day now)

Regarding which stage of the process you need to have reached by this time it could be any of the following (my guesses in parentheses):

  • Have a signed purchase agreement or promissory contract (unlikely)
  • Have the final deed (possible)
  • Having submitted the initial online application to SEF (likely)
  • Having received the tentative approval by SEF (also likely)
  • Being granted the Golden Visa (unlikely)

If you are interested in applying for the Golden Visa in Portugal

Get in touch today and schedule a free consultation.

1.6 How to prepare and apply for the Portuguese Golden Visa

While the process isn’t very complicated, it does involve gathering a lot of documentation – both in Portugal and in your country of origin. It will be beneficial to work with a native Portuguese speaker if you don’t already know the language.

The steps for the initial application look something like this:

  1. Get a Portuguese fiscal number (NIF) and open a local bank account.
  2. Identify and make your investment (and make sure to consult a local lawyer before finalizing anything)
  3. Gather all required documentation from your country of origin (at most three months before submitting your application).
  4. Have it all legalized and translated into Portuguese.
  5. Gather necessary documentation in Portugal (your lawyer can help with this)
  6. Fill out and submit the application for the Golden Visa (typically through your lawyer).
  7. Pay the processing fee.
  8. Wait until you hear back from SEF with a preliminary approval.
  9. Pick a date, time, and place where you will meet in person for your interview.
  10. Bring along the originals of the documentation that was submitted with the application to your in-person interview.
  11. Wait for final approval.
  12. Get your residence card.
  13. Repeat a substantial portion of the same process at the end of year 1 and 3.

According to SEF Portugal about 1,300 requests from investors are pending, many of which are due to lack of essential documents or the need to clarify or update them.

With almost a decade of experience we at RHJ and our specialist law firm- Lexco PT have a 100% success rate in Golden Visa applications.

1.7 Should you work with a lawyer to obtain the Portuguese Golden Visa?

We would definitely recommend that you do. We work very closely with Lexco Law PT Lda, they will take excellent And invest in a good one. You’re making a sizable investment to gain Portuguese residency and eventually citizenship. While the lawyer fees aren’t insignificant, they are much cheaper than making some formal error, making a bad investment, or one that ends up not qualifying.

If you are interested in applying for the Golden Visa in Portugal get in touch today and schedule a free consultation and we can introduce you to our specialist law firm named above.

Golden Visa holders automatically qualify for the Portuguese Non-Habitual Tax Regime (NHR).

Here is the list of types of income that may qualify for tax exemption:

  • Dividends
  • Interest
  • Real estate income
  • Capital gains from the disposal of real estate
  • Occupational pensions
  • Royalties
  • Business and self-employment profits derived from eligible occupations (but be mindful of relevant double taxation agreements in this respect)

Additionally, any Portuguese-sourced income would be taxed at a flat rate of 20% during the first 10 years and there is also the ability to pass on your wealth to a spouse or dependent without incurring inheritance or gift taxes.

1.8 FAQ’S

How long is the wait/processing time for the Portuguese Golden Visa?

While it might vary over time, the processing time is currently around three to six months. It used to take longer, but the ability to book interview appointments online at offices outside Lisbon has helped cut the wait time significantly.

How long does it take before I can acquire Portuguese citizenship and passport?

Due to a change in the Portuguese Nationality law in 2018, the required period of residency before you can apply for Portuguese citizenship has been reduced from six years to five years.

While the application for citizenship may take a while, once granted the application for a Portuguese passport generally only takes about six working days. Per 2018, an ordinary passport costs €65 and is valid for five years.

Can you make the investment through a limited company?

Yes, in addition to making your investment as an individual, you can make the investment through a legal entity, e.g., an investment or holding company. It is essential that you are the only owner or member of the company, and that it is based in either Portugal or another EU member state.

If you still have some questions about the Golden Visa, contact us today..

Useful resources

Credit Source: Nomadgate.com