Exploring Portugal’s Updated Golden Visa: A Guide to the Recent Changes

On October 6th, 2023, Portugal’s government enacted the “Mais Habitação Law,” a significant reform of the Golden Visa program. This new legislation eliminates the possibility of obtaining a Golden Visa through real estate investments or related funds. Despite these changes, the Golden Visa program remains active, albeit with revised investment options.

The Golden Visa program has been a popular route for foreign investors seeking residency in Portugal, primarily through real estate investments. However, the “Mais Habitação Law” has altered this landscape drastically. Investors can no longer apply for a Golden Visa through real estate acquisitions or investments in real estate-related funds. This shift is aimed at addressing housing affordability issues and redirecting investment towards other areas of the economy.

Existing Golden Visa holders can rest assured that their rights remain intact. The new law does not affect renewals, family reunification, or applications for permanent residency. This means that current visa holders can continue to enjoy the benefits of their investment without disruption. Additionally, new applications for residence permits related to investments in artistic production or the maintenance of cultural heritage are still accepted, offering alternative avenues for prospective applicants.

Changes in investment paths

The amendment has led to the removal of several investment opportunities previously available under the Golden Visa program. These include capital transfers of €1,500,000 or more, the acquisition of real estate property, and investments into funds with direct or indirect real estate investments. These options were popular among investors seeking both residency and lucrative returns from Portugal’s booming real estate market.

Remaining investment opportunities

Despite the removal of real estate investments, the Golden Visa program continues with several other viable options. Investors can now pursue residency through capital transfers of €500,000 or more in qualifying venture capital funds, provided these funds have no real estate ties. Creating at least ten jobs in Portugal also remains a pathway to the Golden Visa. Additionally, capital transfers equal to or exceeding €500,000 in research activities conducted by public or private scientific institutions are acceptable.

Another investment route includes capital transfers of €250,000 or more to support artistic production, recovery, or maintenance of national cultural heritage. This option aims to foster cultural and artistic development in the country.

A new groundbreaking addition to the program called the Solidarity Visa, or the Affordable Housing Golden Visa Program combines investment with social impact, focusing on affordable housing solutions to address the housing crisis in Portugal. This program offers a win-win scenario where investors can gain residency and eventual citizenship benefits while making a significant positive impact on the community. The initiative is designed to attract socially responsible investors seeking to align financial objectives with ethical contributions, enhancing Portugal’s appeal as a forward-thinking destination for international investment.

The Solidarity Visa program requires investors to channel their funds into government-approved affordable housing projects across Portugal. To qualify, investors must make a minimum investment dedicated to developing new housing units or renovating existing properties to provide affordable housing for local residents. This investment must be maintained for a period of at least five years, after which investors become eligible to apply for Portuguese citizenship. This approach ensures that investments are not only profitable but also contribute to solving a significant social issue. By participating in the program, investors can play an active role in improving housing availability, making a meaningful difference in Portugal’s housing market, and gaining access to EU citizenship benefits.

Lastly, forming a commercial company with a capital transfer of €500,000 or more and the creation of five permanent jobs is still a valid option. These alternatives reflect the government’s intention to diversify investment into areas that can drive broader economic and cultural benefits.

Portugal’s non-habitual resident scheme

In a bid to continue attracting skilled workers despite past criticisms, the Portuguese government plans to reintroduce tax breaks for foreign residents. The “Non-Habitual Resident” scheme, originally launched in 2009 during a financial crisis, offered a special 20% tax rate on Portuguese-sourced income derived from high-value-added activities, such as practicing medicine or teaching in universities. It also included tax exemptions on almost all foreign income if taxed in the country of origin and a 10% flat tax rate on pensions from a foreign source.

Although the previous government deemed it a “fiscal injustice” and planned to end it, the parliament extended the scheme until the end of 2024 for those who had prepared to move to Portugal in 2023. The reintroduction of this scheme aims to bolster the workforce with skilled professionals, even as the government addresses the housing market concerns linked to such incentives.

While the “Mais Habitação Law” has significantly altered the Golden Visa program by eliminating real estate investment options, it still offers several pathways for investors. By shifting the focus from real estate to other forms of economic contribution, Portugal aims to address housing issues while continuing to attract foreign investment. The planned reintroduction of tax breaks for foreign residents further demonstrates Portugal’s commitment to drawing skilled workers. Prospective applicants must now navigate this new landscape with careful consideration of the revised investment criteria.

Alpen Partners International: Ensuring a smooth transition

Alpen Partners International, an independent Swiss financial advisor and global wealth planner for US clients, not only provides traditional wealth management services but also offers comprehensive guidance on citizenship and residence planning in Portugal and other preferred destinations across Europe, as well as Switzerland.

This includes relocation services to ensure a smooth transition for clients moving to new countries. With our expertise, clients can effectively manage their financial strategies and residency plans, adapting smoothly to new regulations and opportunities in their chosen destinations.