My Thoughts on Latest Declarations of Golden Visa Investment From Prime-Minister António Costa
I am someone who always looks at data to evaluate and form certain opinions, in hopes of having a clear vision of the economy and real estate market as well as their trends and where they are headed on a global scale, so with that in mind I would first like to present you with data collected from SEF (Serviço de Estrangeiros e Fronteiras - Immigration and Border Service)… It’s also important to remember, and probably Mr. António Costa forgot Portugal was bankrupt in 2012 and the IMF with their TROIKA stepped in, and the PSD / CDS government at the time created the Golden Visa Residency Program to jumpstart our economy, and get us out of the hole we are in!!! “In my opinion residence permits for investment have contributed immeasurably to the increase in investment in Portugal, and I welcome you to read on, and form your own!!!” Since the gold visas were created – in 2012 with the PSD / CDS coalition government, Center and Right Wing Parties and today PS (Left Wing Party with absolute majority won in last elections, almost seven billion euros (6.54 billion) have been invested. The vast majority (about 90%) in the real estate market. According to data provided by the Foreigners and Borders Service (SEF), under MAI (Ministry of Interior), in the total of the ten years of the program, officially called Residence Permit for Investment (ARI), 11,180 investors and 18,368 family members were registered. Investors were almost 50% Chinese, followed by Brazilians, Turks, South Africans and, finally, North Americans. There were also visas granted to Angolans and Russians. Concretely, in the last three years (2020, 2021 and nine months of 2022), these are the numbers advanced by SEF… ❖ 2020: 1,182 ARI granted corresponding to 646 million investment (588 million in real estate investment) ❖ 2021: 865 ARI granted, totaling 460 million euros of investment (409 million in real estate) ❖ 2022 (January to September): 926 ARI accepted, which reflected a total investment of 464.8 million euros ❖ In 2014, a year and shortly after this program came into force, 1,526 gold visas were granted, in a total investment of 921 million euros. ❖ In the first nine months of this year, until September, the gold visas generated 465 million euros of investment for Portugal. Data confirmed in SEF statistics. However, and despite these values, the Prime-Minister, António Costa, surprised everyone when this past Wednesday, in a question asked by journalist, he revealed that he is “re-evaluating” the program and that the ARI may have its days numbered. At a press conference on the sidelines of the Web Summit, António Costa said that “all possibilities” are on the table, but that “at this moment it may no longer be justified to maintain” the program. He went on to say: “There are programs that, obviously, we are currently re-evaluating. One of them is the gold visa, which has probably already fulfilled the function it had to fulfill, and which at this point is no longer justified to maintain”, assumed the head of the Government.
I defend that residence permits for investment have contributed immeasurably to the increase in investment in Portugal, in real estate, construction, reducing the unemployment rate and contributing to urban rehabilitation… Which under other circumstances would hardly have occurred… Just see what Lisbon / Porto and other interior Cities or villages are today!!! They also contributed to investments of various kinds, such as services, restaurants, local accommodation, hostels, hotels and more!!! Additionally the State collected values of various natures such as analysis and card issuance fees, IMT, stamp duty, registrations, IMI and capital gains… In short values that the government would haver never received since it’s inception!!! “The money doesn’t fall from the sky Mr. António Costa, and I invite you to leave Lisbon every once in a while and visit rural Portugal, to see with your eyes what still needs to be done in most interior Cities and small villages throughout Portugal!!!” Also keep in mind that Portuguese Citizens, as well as foreigners who choose to permanently reside here, benefit from low cost (or even free in some cases) services such as education; healthcare; discount on medicine and many other social services and without that foreign investment we would only be further burdened by the high taxes that we have always been accustomed to paying!!! I feel António Costa’s declarations and the current uncertainty will harm Portugal's image abroad and investors will be considering other countries to look at and not our own!!!… From an economic point of view, such investments would have to be maintained, given that we are already experiencing an economic crisis with the rise of inflation and energy costs, which may be expected to worsen!!! And what are the so-called gold visas??? Officially, the official name of the Golden Visa Program is the Residence Permit for Investment (ARI) which consists of a five-year residence permit program for investment for non-European Union citizens. The program was created in 2012 and has mostly been joined by Chinese and Brazilians, although in the last year there has been an increase in requests, and consequent authorizations, from US citizens. To obtain it, the candidate must either carry out a capital transfer in an amount equal to or greater than 1.5 million euros, or the creation of at least 10 jobs, or the acquisition of real estate of equal or greater value €500,000, among others, such as the acquisition and execution of rehabilitation works on real estate, in the global amount equal to or greater than €350,000. The regime grants investors and their families the right not only to live, but also to work and study in Portugal and allows free movement within the European Union's Schengen Area. According to the same data from the Foreigners and Borders Service (SEF), since October 2012, 744 gold visas have been granted to investors in the Capital Transfer modality. In 2021 alone, 90% of visas issued in the first quarter of 2021 were through real estate investment, reaching the number of 205, out of a total of 228 authorizations. Demand for the gold visa from Portugal skyrocketed in the first quarter of 2021, shortly after the announcement of program changes and the increase in foreign investment. The Chinese lead investment in the program, with a 33% increase in investments compared to 2019. Americans invested 70% more in a gold visa compared to 2019. In April of this year 2022, 121 ARIs were allocated, more than half of what was allocated in the whole year of 2021. Most of them (26) were to North Americans. In that month alone, there was an increase in relation to January and February, with 94 in each month, and in March, with 73. Of these, 92 were delivered for purchase of properties (43 for urban rehabilitation) and only 29 for transfer of capital. The investment captured rose, in April, 16.6% year-on-year, to 59.7 million euros. He went on to talk about the recently launched Digital Nomad Visa…
“We have an open program so that we can be a factor in locating these digital nomads, as we have a program to attract Foreign Direct Investment. Each company that makes major strategic investments in Portugal also does so on a contractual basis. And, fortunately, Portugal has been increasingly attractive”, said the prime minister. In the first half of this year, we once again had a record of investment contracted through AICEP (Agência para o Investimento e Comércio Externo de Portugal - Agency for Investment and Foreign Trade of Portugal). Year after year, we've had it. And what we want is to continue to have it. Because these companies are the companies that help us to create a society that has more jobs, especially better jobs, with better working conditions and better wages. And that’s why we have to keep going,” he concluded. The law was changed… What changes were approved??? The ARI regime has changed, and the new rules came into force on January 1, 2022, with a year of delay since, initially, they were scheduled for the beginning of 2021. These rules greatly reduced the conditions for citizens to be eligible to have an ARI. Thus, the acquisition of real estate, with a value equal to or greater than 500 thousand euros, and the acquisition and execution of urban rehabilitation works, in a global amount equal to or greater than 350 thousand euros, intended for housing, continue to allow access to this regime, but only when they are located in the Azores and Madeira or in inland territories less populated and considered low density areas. With this change, there is also an increase in the amounts involving investment activity. Thus, the following values are in effect: ❖ Investment via capital transfer now has a minimum amount of 1.5 million euros (instead of 1 million euros) ❖ Investment via capital transfer applied in research activities carried out by public or private scientific research institutions, integrated in the national scientific and technological system, now has a minimum amount of 500 thousand euros (instead of 350 thousand euros) ❖ The same applies to the transfer of capital intended for the acquisition of participation units in investment funds or venture capital funds. In this situation, the minimum amount rose to 500 thousand euros (instead of 350 thousand euros) ❖ Transfer of capital intended for the constitution of a commercial company with headquarters in the national territory, combined with the creation of five permanent jobs, or for reinforcement of the share capital of a commercial company with headquarters in the national territory, now has a minimum amount of 500 thousand euros (instead of 350 thousand euros) In closing, although I feel some adjustments may have to be made, but ending the Golden Visa Program would be disastrous in attracting foreign investment in Portugal not to mention serious consequences in our economy!!! Feel free to schedule a call on our calendar at your convenience through Calendly if you are considering moving to or want to learn more about the Golden Visa Program, and be on your way to home ownership and path to Portuguese Citizenship, and ultimately a passport to go along with it!!!
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