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Portugal Golden Visa - The unique advantages of an investment fund

20 January 2020

Foreign investors looking to apply for a golden visa in this new decade may ask themselves, should I invest in a fund or a property (real estate)? There is a sea of options out there, and Portugal has a few attractive golden visa schemes which were introduced in the last decade. In this article, we will showcase one of the best options for obtaining a Portuguese Golden Visa: by an investment fund.

The Portugal Golden Visa Program

Firstly, what is a golden visa? A golden visa is a permanent residency visa issued to individuals who invest a certain amount of money into a country. Most often, the investment is made through the purchase of real estate with a minimum value in the issuing country. Investment amounts in Portugal depend on which golden visa scheme the individual chooses.

The Portugal Golden Visa Program was introduced in 2012 during the Great Recession by the Portuguese government to attract foreign investors to the country’s property market.

Now there are several methods of obtaining a golden visa. The program grants residency in Portugal to individuals who meets one of the following requirements:

1. Start a business and create ten jobs in Portugal.
2. Invest in real estate at a minimum value of €500,000 (which is the most traditional route).
3. Invest in real estate with construction completed at least 30 years ago or located in urban rehabilitation area, with the execution of rehabilitation works. The minimum investment is €350,000.
4. Transfer of capital of minimum €350,000, which is invested in research carried out by public or private, scientific research institutions that are part of the national scientific and technological system.
5. Transfer of capital of minimum €250,000. Invested in support for artistic production, recovery, or maintenance of national cultural heritage.
6. Transfer of capital of minimum €1,000,000.
7. Transfer capital of minimum €350,000, to start a business or increase the share capital of a company with a registered office in Portugal and create five jobs for a period of 3 years.
8. Transfer capital of minimum €350,000, to obtain units in an investment fund or venture capital fund. The main focus in this article.

The most popular way of obtaining a golden visa in Portugal has been property investment. But in recent years, other programs have become attractive to investors that don’t wish to buy a property and the hassle that comes with it. Therefore, in addition to property investment, Portugal created programs for obtaining a Golden Visa by fund investment.

As of 2016, Portugal issued 2,788 golden visas. In 2018, imidaily.com reported that the first batch of golden visa holders are obtaining not only permanent residence (PR), but also citizenship.

Who can obtain a Portuguese Golden Visa?

Any third-country national can apply for the Golden Visa after investing in Portugal (that means anyone except Portuguese and EU/EFTA nationals). Investments can be made as an individual or via a legal entity meeting specific requirements.

Also, you will need to meet the minimum physical presence requirements:

1. You need to maintain the investment for at least five years.
2. You need to spend at least seven days in Portugal during the first year, then no less than fourteen days in the subsequent two years.

Note: As of time of writing, due to FATCA complications, Millennium BCP bank does not accept US citizens to open bank accounts (the depository bank of the fund mentioned below in this article).

Key benefits of the Portuguese Golden Visa
- You can enter Portugal without a visa;
- You can live and work in Portugal;
- You can bring your family with you;
- You can apply for permanent residency and/or Portuguese citizenship after 5 years;
- You get access to Portuguese healthcare and education system;
- You can travel freely in the Schengen Area.

The countries that are part of the Schengen Area are: Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and Switzerland.

Other countries that are expected to join the Schengen Area in the future are Bulgaria, Croatia, Cyprus, and Romania. As a Portuguese resident, you can travel visa-free to these countries as well.

What are the required documents for the Golden Visa application?

Individuals who wish to apply for a Golden Visa are required to:

- Have a valid passport;
- Have a statement of your criminal records from your country of origin;
- Have evidence that you are legally present in Portugal. For example, visa, entry stamps and so on;
- Have proof that you are covered by private or Portuguese health insurance;
- Complete a form that authorize SEF to obtain and extract of your Portuguese criminal records;
- Have documents that show good standing with the Portuguese Tax and Customs Authority and Social Security system;
- Have a sworn statement that declares your commitment to and compliance with the investment requirements (the amount of the investment and five-year period);
- Have a receipt that shows you paid the application processing fee;
- Have specific documentation relating to your investment (contact us for more information).

The traditional way of property investment and the other routes mentioned in this article grant a golden visa, but which program suits you as an investor? Read on to learn more about the advantages of an investment into a Portuguese investment fund or venture capital fund.

Unique advantages of the investment fund

Compared to other investment routes, this route has some unique advantages that might fit your investment needs:

- The investment into the fund does not trigger any tax (no need to submit Portuguese tax returns, nor is there any withholding tax);
- It is the most tax-efficient investment, especially for non-residents;
- It is a diversified investment than purchasing one or more properties, and no need to spend time browsing through properties;
- You save a tremendous amount of time and frustration - no need to deal with all the paperwork that comes with buying real estate;
- The minimum investment into the fund is considerably lower compared to other investment options: €350,000.00;
- The minimum stay period in Portugal is only 7 days the first year, and no less than 14 days in the following 2 years;
- The potential gains of the investment fund are substantially higher than other options;
- The investment fund is heavily regulated by the Portuguese authorities (The Portuguese Securities Market Commission – CMVM, Bank of Portugal, the external Fund Manager, and the Tax Authorities).

The funds that are available change over time as subscription periods close and new funds are introduced. For now, the fund showcased on this website, PT Co Innovation I, is open for subscription until April 2020.

To get started and to learn more about the investment fund, click here and complete the eligibility test.

If you still wish to take the traditional route of obtaining a Portuguese Golden Visa by investing in property (or you’re American), you can contact us so that we can introduce you to the right person.

Disclaimer: This article is not to be considered legal advice. It is merely a best effort representation of the information that is currently available.