Update on Portugal's Golden Visa Regime

Following on from our recent article on comparable tax regimes in continental Europe, there has been an interesting (and helpful) change of heart from the Portuguese government in respect of their 'Golden Visa Regime'. 

Summary of the Golden Visa

In part 1 of our article we set out why Portugal's Golden Visa scheme to date has been an attractive scheme either for individuals looking to relocate to Europe and, eventually, obtain an EU citizenship, and/or those looking to benefit from the 'non-habitual resident tax regime'.  Please see more details on this tax regime in Part 1 of our article. 

As a reminder, Portugal's Golden Visa scheme, which opened in 2012, grants individuals visas in return for investments into Portuguese investments or purchase of real estate.  Towards the end of 2022, it was announced that this regime was being withdrawn in an effort to alleviate the overheating of the housing market.  In particular, the government announced that purchasing residential property in major cities such as Lisbon or Porto, or in coastal towns on the mainland, would no longer qualify for the purposes of the scheme. 

However, in May 2023, the current government submitted a proposal to scrap the abolishment of the Golden Visa regime and on 19 June 2023, the government approved the final version of the Golden Visa legislation.  It now awaits the President’s approval or veto.  

Latest proposal – June 2023

It is understood that the current government now wishes to eliminate two key investment routes:

• Making a capital transfer of at least €1 million to a Portuguese bank account; and 
• Real estate investments (both investments into real estate and direct purchasing of real estate). 

The remaining routes for obtaining the 'Golden Visa' now appear to be:

1. Invest at least €500,000 in a qualifying Investment Fund. The investment options are regulated by the Portuguese Securities Market Commission and are usually venture capital investments.
2. Create at least ten jobs for Portuguese nationals.
3. Make a capital transfer of at least €500,000 for research activities in science or technology by either public or private scientific research institutions.
4. Make a capital transfer of at least €250,000 to support artistic production, restoration, or maintenance of national cultural heritage.
5. Invest at least €500,000 for the creation of a commercial company headquartered in Portugal or to increase the share capital of a commercial company, through which you create at least five full-time jobs.

For the moment, existing holders of Golden Visas can have them renewed (until the new law is in force) so long as the individual satisfies conditions around their real estate, which include letting on a long-term basis. It is understood that future renewals after the law is published will convert into an Entrepreneurs Permit.  

EU nationals can still freely immigrate to Portugal and certain work permits can still be applied for by non-EU nationals, including a digital nomad visa, which grants rights to live and work in Portugal depending on the nature of the employment.

We eagerly anticipate news of the Portuguese President's decision on the future of the popular Golden Visa.  Should you have any queries or would like to discuss a potential relocation to Portugal, we have close links to lawyers based in Portugal and would be very happy to assist in terms of managing and coordinating any such move.