Before we go into specifics, let’s determine: What is a Golden Visa, exactly? Some European countries are offering their residence permits, commonly referred to as Golden Visas, in exchange for a foreign national’s investment in their real estate, economy, and job creation. Naturally, each program has its peculiarities and a set investment threshold.
What are the easily identifiable advantages of such programs, and why is their popularity steadily growing? Firstly, geographic expansion, made possible by a residence permit issued by one of the European countries, allows respectable entrepreneurs to revitalize their business. Another reason is the prospect of investing in immovable property of one of the Southern European countries, and thus, keeping the funds invested and yielding a stable profit from renting it. And, of course, it never hurts to have a private accommodation by the Mediterranean Sea.
In recent years, Latvian, Spanish, Greek, Maltese and Cypriot Golden Visa programs have risen to prominence, but the Portuguese program remains one of the most popular for obtaining a European residence permit.
How is a Portuguese residence permit superior over other programs? Its holder is free to move across Europe and the Schengen area without additional expenses, having to worry about visa-related paperwork or queuing at EU embassies.
Furthermore, apart from social and political security, the holder of the Portuguese residence permit is eligible to obtaining permanent residence, and, ultimately, citizenship.
Yet another bonus of the Portuguese Golden Visa is mild residency requirement. To retain the status, its holder is expected to only spend 7 days per year in Portugal. At the same time, this residence program is perfect for business persons and investors who opt to stay in Portugal indefinitely. The permit is valid for 1 year and is subsequently renewed for 2-year periods.
The investor’s family members obtain their own residence permits in 6-8 months after the principal applicant. Five years after the issuance of the residence permit those investors who follow the rules of Golden Visa program may apply for permanent residence, and for citizenship 1 year after that.
To begin the process, applicants are expected to:
Next, the investor is to travel to Portugal to submit the documents and biometrics, and pay for data analysis. Application processing and due diligence usually takes up to 6 months.
To qualify for the program via real estate purchase, the applicants must meet the following criteria:
The spouse, children under 18 years of age, as well as older children who are full-time students, unmarried and are fully financially dependent on the main applicant; physically or mentally disabled children over the age of 18; financially dependent parents or in-laws may be included in the application filled in by the investor.
Acquisition of residential housing (a beachfront mansion or villa) worth at least €500,000 is the most common way to inject funds in the economy of Portugal and obtain its residence permit. The less expensive option would be to invest €350,000 in a real estate object that was built over 30 years ago and is to be rehabilitated. However, such objects are quite difficult to find and are hardly advisable for investment.
In addition to real estate purchase option, there is also the option of direct investment in Portuguese economy – one may purchase shares or government bonds worth at least €1 million. It also possible to establish a business and create at least 10 jobs for Portuguese nationals.
Lately, Portuguese real estate brokers have started including significant commission fees – up to 20% – in the cost of real estate objects. Not only that, but also more and more agents are artificially winding up the prices to the half-a-million euros mark to increase the chances of selling the property to foreign investors. That is why it is imperative to find reliable legal consultants who will be able to help you avoid sellers acting in bad faith.
Portugal is going through the stage of booming real estate investment, but commercial property sale is on the rise as well. Analysts say the volume of 2017 transactions will surpass €3 billion – against €1.3 billion in 2016.
The increase in sales volume and economic activity of foreign Golden Visa holders stimulates the growth of the average cost per square meter of housing.
According to the latest figures from the National Statistics Institute of Portugal, the average price for a square metre of property is currently standing at €896, which is a 6.4% increase in prices for same time last year, but in many municipalities, the prices go above that average. Lisbon tops the list of the most expensive regions in the country, with the average price of €2,231 per square metre of floor space, a 15% growth since last year. Almost throughout the entire Algarve region, the prices range between €896 and €2,231 per square metre. In Cascais, prices often go above €1,500 per square metre.
World celebrities are also stirring the public interest, and thus contributing to price growth, for real estate in Portugal. The Queen of Pop herself, Madonna, has purchased there a royal mansion in a UNESCO World Heritage site for a reported $8.9 million. Fashion designer Christian Louboutin, actors Michael Fassbender and Monica Bellucci have all mentioned that they own property in Portugal.
Sometimes, Portuguese authorities do deny residence permits to applicants. While the Portuguese Immigration Service reviews each application individually, the most common reasons for rejection are:
The status may be revoked if the applicants fail to fulfil the residence requirement of staying in the country for at least 7 days within the first year after receiving the residence permit.
To avoid complications, it is better to reach out to specialized legal companies that have substantial experience in assisting foreign nationals with European residence permits and citizenship. As a rule, specialists of those companies work with major Portuguese real estate agencies and are ready to advise their clients on real estate options.
It does not take more than 8 months to obtain the desired Portugal’s residence permit. Over 5,000 foreign investors have become residents since the launch of the program.
If you so choose, you can change your country of residence after 5 years and sell your Portuguese real estate, which is considered to be a really reliable investment today.
Don’t fall for the misconception that it is somehow unrealistic to obtain a European residence permit. The time is now to choose the investment type and maybe purchase that villa in Lisbon you’ve set your sights on.