Portugal Golden Visa: Residence by Investment

Golden Visa Portugal is considered to be one of the most attractive routes to obtain residence, and then citizenship in Europe.  Many non-EU citizens have already benefited from the opportunity to invest in Portugal, and to obtain a residence permit.  In recent years, the program also proved successful in converting its applicants into Portuguese citizenship.


Any non-EU, non-EEA, and non-Swiss citizen can apply for a Golden Visa in Portugal. In order to qualify for the Golden Visa residence permit, the applicant is required to make one of the qualifying investments, such as real estate, capital transfer, fund, business activities, or a donation. You will see all these investment types later on in the article.


So, the residence by investment scheme in Portugal allows applicants to both make a lucrative investment in Portugal, and obtain the right to live and work in Portugal.  Not only for themselves, but also for their family members.  After holding the permit for five years, the applicants can then apply for citizenship in Portugal.  As hinted by the government, these rules may soon change.

In this article, you will understand how the program works, how you can participate in it, in great detail.

What is Golden Visa Portugal?

The Portugal Golden Visa program was launched in 2012.  The main purpose of the program was diverting funds from global investors into the Portuguese economy.  With this intention, Portugal offered to grant a special temporary residence permit for foreigners, who have invested in Portugal.

The Golden Visa investor is able to enjoy a set of privileges, such as living and working in Portugal, travelling across Schengen states without the need for an additional visa, and spreading the joy to the rest of the family.  You will see the complete set of advantages later on in the article.

How Does the Portuguese Golden Visa Work?

The Golden Visa program in Portugal facilitates the process of obtaining a legal residence permit in Portugal.  The system allows investors to arrive in Portugal, make an investment, and get a residence permit in return for their investment activity.



European Union citizens, EEA citizens, and citizens of Switzerland are not allowed to partake in the program.  All other citizens are eligible to apply, provided that they perform one of the investment types and amounts, stated by the government.  These include real estate acquisition, transfer of capital, donations, among others.  Depending on the type of investment pursued, the process may slightly differ.

The Golden Visa holders are not required to live in Portugal full time.  They are merely required to spend a minimum of seven days in Portugal every year, on average.  After five years, the applicants then have the right to apply for Portuguese citizenship.

Golden Visa Investment Types

Below, you will find the qualifying investment types that lead to a Golden Visa in Portugal:

  • 500 thousand euros in a real estate property in Portugal
    • 20% less (400 thousand euros) if the property is in a low density population area in Portugal
  • 350 thousand euros in a real estate property in Portugal, provided that the property is older than 30 years old, and that it is rehabilitated in accordance to the municipality, in urban rehabilitation areas
    • 20% less (280 thousand euros) if the property is in a low density population area in Portugal
  • Creation of a minimum of ten full time jobs in Portugal
  • Capital transfer of a minimum of 1 million euros
  • A minimum investment of 350 thousand euros in a qualifying investment fund in Portugal
  • A minimum investment of 250 thousand euros in artistic production, recovery, or maintenance of cultural heritage
  • A minimum investment of 350 thousand euros in scientific research in Portugal
  • Transfer of 350 thousand euros + employment of five full time employees in a Portuguese company

Portugal Golden Visa through Real Estate

The most popular type of investment among the above is real estate acquisition by far.  It is pretty convenient, as the investor purchases a property in Portugal, and obtains the Golden Visa.  The Portuguese government even allows the investor to rent out the property, if they choose to do so.

The only limitation is that the investor needs to meet the minimum investment amount, which is 500 thousand euros for any type of real estate.  The amount does not necessarily need to be spent on one property alone, it can be spent on a number of properties, as long as the total sum is equal to or greater than 500 thousand euros.

This way, you can invest in several properties that add up to the minimum investment value, and obtain your Golden Visa in Portugal.  The property or properties can then be rented out, earning you a handsome rental yield on your investment.

While 500 thousand euros is the amount stated for any type of real estate, there is another option in Golden Visa investment: the 350 thousand euros real estate acquisition.

The 350,000 Euros Real Estate Option

If the subject property is more than thirty years old, located in an area of rehabilitation, and the property is renovated, the minimum investment value drops down to 350 thousand euros. Still not low enough?  Well, there is yet another incentive that awaits you, then.

Low Density Population Area Discount

In order to attract capital to the suburban areas, the Portuguese government came up with yet another option.  As long as the above real estate acquisitions are done in a low density population area within Portugal, the minimum investment amount drops yet another 20%.

So, the 500 thousand euros investment limit drops down to 400 thousand euros.  The 350 thousand euros investment limit drops down to 280 thousand euros.

Can You Finance the Golden Visa Property?

Prospective investors frequently ask if the property investment can be financed through a bank. The answer is yes and no.

Portugal requires that the minimum investment amount comes into Portugal from outside of Portugal.  So, the minimum investment amount cannot be financed by a Portuguese bank.  However, anything that exceeds that amount, can technically be financed in Portugal.

So, if the value of the property exceeds the minimum investment amount, nothing prevents the applicant from getting a loan for the exceeding amount.

As for the minimum amount, it can be financed by the main applicant in a country other than Portugal.

What is the Best Type of Investment for a Golden Visa?

Well, it depends.  It depends on the investor’s appetite, criteria, budget, as well as when the investment will be made.

For conservative investors, real estate seems to be the go to option.  It is simple, it typically protects the investment against inflation, preserves its value, and if rented out, generates a return on investment.

As for more financially savvy investors, the fund option is also an interesting one.  Generally speaking, funds tend to carry more risk than tangible assets like real estate.  However, depending on the investment philosophy, team, and portfolio of the fund, there are certainly interesting investment funds available in Portugal.

If transferring capital or opening a company in Portugal and employing Portuguese people is something that suits your future objectives, then that may also be a convenient way to obtain your Golden Visa.

Golden Visa Requirements

In addition to making one of the qualifying investments in Portugal, the Golden Visa holder must also comply with a set of rules.

Golden Visa cards are temporary residence permits that are valid for two years at a time.  In each two year period, you are entitled to spend a minimum of fourteen days in Portugal.  So, on average, you need to spend a minimum of seven days in Portugal.  This is a very low stay requirement compared to other programs in Europe.  Particularly, considering that the residence permit leads to citizenship eventually.

You also need to maintain your investment for a minimum of five years after you obtain your Golden Visa.  At the end of the five years, you have a couple of options, and one of them is to become naturalized as a Portuguese citizen.  Once you get your citizenship in Portugal, you no longer need to maintain your investment.

On the other hand, there are many advantages that the Portugal Golden Visa comes with.  One of these advantages is the ability to include family members in the program, along with the main applicant.  All Golden Visa holders have the ability to travel through the Schengen Area without the need for an additional visa.

Benefits of Portugal Golden Visa

There is a wide range of benefits that the Golden Visa comes with in Portugal.  Below, you can find a list of some of the advantages:

  • The ability of entering Portuguese territory without an additional visa
  • Travel within the Schengen Area consisting of 26 European countries, without the need for an additional visa
  • The right to Live, Work, and Study in Portugal
  • Family Reunification: the ability to include your spouse, minor or dependent children, and dependent parents in the program
  • Be eligible for permanent residents after five years
  • Be eligible for citizenship (Portuguese Nationality) after five years
  • Only stay a minimum of seven days in Portugal per year

Who is the Golden Visa for?

The Golden Visa program in Portugal is designed for global investors and entrepreneurs.  The nationals from “third country” states can carry out an investment activity in Portugal and apply for their respective residence permit.  This investment can be made in person or through a sole proprietorship, in some investment types.

As stated before, the applicants must NOT be EU, EEA, or Swiss citizens.  You must also have clean criminal records in Portugal and in your country of residence.

Among the Golden Visa applicants, the largest number of applicants are Chinese, South African, Turkish, Brazilian, Russian, respectively.  In recent years, more and more Vientamese, Hong Kong citizens, and Americans started showing interest in the Portugal Golden Visa.

Once Brexit comes into effect, UK citizens will also qualify to apply for the Golden Visa in Portugal.

Can Your Family Benefit from the Golden Visa?

Certainly.  A great advantage of the program is the possibility of including family members.  The main applicant of the Golden Visa is able to spread the residence permit to the family members, and give them the right to live and work in Portugal, as well as the right to travel in Europe freely.

Under family reunification, certain family members qualify to get the Golden Visa at the same time the main applicant does.  All the benefits are the same for each family member and they too can apply for citizenship at the end of five years.

Who is Considered Family?

No, you can not help your husband’s third degree cousin get a Golden Visa through family reunification.  There is a limit to who qualifies as family in the Portugal Golden Visa regulations.

The main applicant may extend the Golden Visa permit to a spouse, partner, minor children and retired parents.  In addition, family reunification also covers children above the age of 18 that are single, financially dependent on the main applicant, and in school full time.  All three conditions need to be met in order to upkeep the residence permit.  Dependent parents, under the age of retirement, can also be qualified for family reunification in certain cases.

Portugal recognizes gay couples and members of the LGBTQ+ community.  So same sex partners are also eligible to obtain the Golden Visa under the family reunification rules.

How to Apply for a Golden Visa in Portugal?

The residence permit for investment (ARI) application must be made online on the SEF website.  SEF is the governmental organization that is responsible for Foreigners and Border Services in Portugal.  The application may also be submitted by a law firm on your behalf.

In order for your lawyer to apply on your behalf as your legal representative, you need to provide the law firm with a Power of Attorney.  They can then fill out the form on your behalf and then submit it to SEF.

The application must accompany a letter by the main applicant, declaring that the minimum stay requirements and the minimum investment activity will be performed.  It is practically a commitment of honor.

The declaration, along with the rest of the necessary documentation is presented to the SEF when applying for the first Golden Visa, and again at each renewal.  The documents are presented to a regional SEF office in person, where the biometrics data, such as the fingerprints, are also submitted. It is then the duty of the regional director of the SEF to grant the Golden Visa permit.

The scheduling of the date and time of the ARI appointment is performed at the appointment page of the SEF website.  You do not have to apply for the SEF office in the region where you made the investment activity.  It can be any SEF office across Portugal.

Required Documents

It is primarily essential to prove the required investment activity.  Then, you also need to submit the following documents:

  • A valid passport
  • Passport photos
  • Certificate of Criminal Record from Portugal
  • Certificate of Criminal Record from the country of residence

All necessary documents need to get an apostille, be translated, be notarized, and then get a second apostille before submitting to SEF.  In some cases, SEF may ask the corresponding Embassy of Portugal to also certify the documents.

The fee for the application must also be paid.  The amount will vary depending on your application and the number of dependents.

Golden Visa Fees

The application fees for the Portuguese Residence Permit by investment are as follows:

  • Initial analysis of the application for granting or renewal of residence permits: 532.70 euros per each application
  • First issuing of the residence permit: 5,324.60 euros per each application
  • Renewal of the residence permit: 2,662.30 euros per each application

Above fees are the same for each application, regardless of if it is the main applicant or any of the dependents.

The fees are stated in Article 90-A of Law No. 23/2007, July 4th.

NIF (Tax Identification Number) in Portugal

It is necessary to get an identification number in Portugal, called a NIF, before pursuing any legal activities in the country.  It basically acts as your identification number in Portugal.

You will need to open a bank account, carry out an investment such as buying a property in Portugal, and possibly pay the government and your law firm.  For all these activities, you will use your NIF number.

In order to obtain your NIF number, you need to prepare the following documents:

  • A Valid Passport
    • A birth certificate in the case of a child
  • Proof of Residence in the country of origin
  • Proof of School Enrolment, if the applicant is a student

You can get these documents and submit them at a “Finanças”.  It is the name given to local tax offices in Portugal.  There, you can easily obtain your NIF number.

For those who do not reside in Portugal full time, you must designate a tax representative, who resides in Portugal.  This can be anyone who lives in Portugal full time.  The government will use their address for any official correspondence with you.  The person will not be liable for any tax related issues with you, personally.

Taxation in Portugal & Non-Habitual Residence (NHR)

Portugal offers a variety of tax advantages for those who are Portuguese tax residents, but have income outside of Portugal.  Depending on the circumstances, Golden Visa applicants may benefit from these privileges in terms of taxation.

The Non-Habitual Tax Regime (NHR) is the tax residency program for foreigners in Portugal.  This program is responsible for enabling the privileges mentioned above.  In order to enroll for the NHR program, you need to fulfill a number of requirements, such as:

  • Be considered a resident in Portuguese for corresponding tax year,
  • Not be considered a tax resident in Portugal for five years prior to the year you intent to start your Non-Habitual Residence status,
  • Be a member of one of the listed value add professions

The tax rates and benefits differ depending on the type of income.  For instance, income from professional activities will be taxed at a fixed rate of 20%.

In light of the Double Taxation Treaties that Portugal holds with other countries, the non habitual residents are not taxed on their income from other countries.  Thus, double taxation is prevented.

The advantages of the NHR regime are valid for the first ten years of holding the non habitual resident status.  After ten years, the resident is taxed at regular Portuguese tax rates.  

The application must be made before March 31st of the following year, of the year in which the residence began.

Advantages of Living and Working in Portugal

Portugal has a unique position in Europe.  It is naturally beautiful, has a great warm climate, delicious and rich cuisine.  Though these advantages are dwarfed next to the fact that Portugal opens the doors to the rest of Europe.

The country gives access to 270 million Portuguese speaking people across the world.  On the other hand, the number of people speaking English in the country is very high.  You can easily get by with in English, particularly in the major cities.

It is worth noting that Portugal is very safe and secure for its inhabitants.  As of 2020, it is chosen as the 3rd safest country in the world.

Its inhabitants enjoy a high standard of living with a strong education system.  Some of its universities are among the fifty best universities in the world.

The transportation and logistics infrastructure of the country is at a great level both on land, air, and at the sea.  Lisbon and Porto have large ports that are well connected to a motorway network, as well as to the airports.

The healthcare system in Portugal is also quite high quality compared to the rest of Europe.

The real estate market holds many opportunities for investors, as the country has a very active tourism sector, reflecting positively on many other service sectors.

All of the above make Portugal a very attractive destination to live, work, or study in.  Needless to say, a potential investment in Portugal has more to offer than just the Golden Visa residence permit.

Golden Visa Portugal 2020 Changes

In February 2020, the Portuguese Parliament approved the state budget for the year 2020.  Within the approved law, there were important changes pertaining to the Golden Visa program.

The approved change mainly refers to two aspects:

  1. The minimum investment amounts in the Portugal Golden Visa investment routes to be raised
  2. The real estate investment to exclude the possibility of investing in central cities such as Lisbon or Porto

So, once the changes are taken into effect, obtaining a Golden Visa through real estate will only be possible as long as the subject real estate properties are not in major cities.  Any investment in Lisbon or Porto, which are the most popular investment destinations, would thus not qualify the investor to get the residence permit.

Where should a Golden Visa investor invest in a property to qualify for the visa then?  Well, in the municipalities of the interior or the autonomous regions of Azores and Madeira.

Along with the same law, there was also a change in the non habitual residence (NHR) tax program, stating that pension income of foreign pensioners would be subject to taxation.

Why the Sudden Changes?

There are a couple of reasons behind the changes made to the Portugal Golden Visa.

One primary objective of the measure is an effort by the Socialist party in power to protect the locals from hyper price appreciation in the city centers.  The party is concerned that the locals are being pushed out of the cities and that the culture is being affected. By preventing the Golden Visa applicants from buying properties in Lisbon and Porto, the government is under the impression that they can prevent the property prices from appreciating.

Another objective is to stimulate investment to the interior parts of Portugal, where real estate investment by foreigners is not quite popular.

On another note, the European Commission is known to pressure the residence and citizenship by investment programs in Europe.  Portugal’s program, although not one of the ones under scrutiny or spotlight, also got a fair amount of pressure.  The Portuguese Parliament probably thought that such changes to the program would alleviate the criticism, at least for a while longer.

How Does This Really Affect the Golden Visa Applicants?

By far the most popular investment option of the Portugal Golden Visa is the real estate acquisition option.  Among the real estate transactions, the overwhelming majority of the investments are made in Lisbon, and then in Porto as a far second.

This law will prevent the Golden Visa applicants from buying the real estate property in Lisbon or Porto.  However, prospective Golden Visa applicants will continue to be able to invest in properties in beautiful Portuguese cities, although smaller ones.

Some of the areas that will gain tractions are in the Algarve region and some others in the North, like Guimaraes or Braga.  There are still a lot of areas with tourism potential in the interior municipalities.

Furthermore, the other options such as capital transfer, opening or investing in a business are most likely going to be still present.  Some of these investments require even a less capital deployment than the real estate option.

Although there is a natural tendency to invest in major cities, it is true that some areas in these cities are saturated in terms of property prices.  The supply and demand are pushing prices to go beyond what the local residents can comfortably afford.

Even with the changes, the Golden Visa Portugal will continue to be a great option for those interested in obtaining European residence, and subsequently European citizenship by investment.

When will the Changes Take Effect?

The changes are approved in February 2020 through the voting on the 2020 Budget for Portugal.

However, it was initially stated that the changes will not take effect until the end of 2020, according to a statement made by the assistant to the Prime Minister.  The existing rules would be valid until then and the proposed changes would not come into effect until the beginning of 2021. 

With the arrival of the global COVID-19 pandemic, the changes were postponed further.  Nevertheless, there are no clear dates as to when they will come into effect.  Most law firms and advisory firms do not expect the changes to be applied before mid-2021.

This will give a fair adjustment period to the existing authorities and markets. It is also stated that the changes will not be retrospective.  So, Golden Visa applicants who have already invested with the old rules, will continue to make use of the old rules, for as long as they please.

Conclusion

As we have gone through it throughout the article, Golden Visa Portugal refers to a residence by investment program targeted on non-EU, non-EEA, and non-Swiss foreigners, interested in making an investment in Portugal.

The Golden Visa holders may enjoy a number of advantages, including visa-free travel within the European Schengen region, family reunification, and obtaining the right to live, work, and study in Portugal.  Additionally, Golden Visa also grants the right to apply for permanent residence or citizenship in Portugal at the end of five years.

One great advantage is the extremely low stay requirement of the residence program.  Golden Visa holders only need to spend a minimum of seven days per year in Portugal, on average.

The process of making the investment and applying for the residence application through SEF is quite a bit of paperwork.  The analysis can also get rigorous and complex, as SEF has a high level of compliance it abides by.

So, it is very important that the Portugal Golden Visa applicants get the necessary professional support from advisors.  As in any industry, choosing the right advisor to go with is very critical as it may make or break both your investment and your residency application.