Main changes to the Golden Visa Programme in Portugal

After months (in fact years!) of suspense about the extent and impacts of the legal changes foreseen in Portugal’s Golden Visa regime, Law No. 14/2021, of February 12nd was finally approved, which processed expressly with the modifications of this regime and its entry into force.

On one hand, these are good news, as it eliminates the uncertainties regarding the scope and beginning of legal changes in the Golden Visa Program. On the other hand, the bad news is that it will soon become more expensive and difficult to request a residence permit for Investors in Portugal.

However, at this moment there is an excellent “window of opportunity” that the investor can safely take advantage of should he wish to go ahead with his Golden Visa, in which traditional values still apply and real estate investments in large urban centres such as Lisbon and Porto are accepted.

Check out the main changes to come and why you should take the opportunity to make your investment and apply for the Golden Visa as soon as possible in this article.

A short history and legal changes

For some years now, political pressure has grown in Portugal for the Government to promote changes and even the extinction of the Golden Visa Portugal Program. Without going further on the subject, the main reasons are access to housing in large urban centers and the promotion of foreign investment in the interior of the country.

In this context, on March 31st, 2020, the State Budget for the year 2020 was approved which, among other topics, authorized the Government to review the residence permit regime for investment, created in 2012 (Golden Visa).

In this way, it was foreseen, still for 2020, the amendment to the referred Legal Regime concerning the articles referring the obtaining of residence permit through investments in the country, highlighting the increase in the minimum values of the investments, as well as the delimitation of territories for the acquisition of properties that are covered and admitted to the Golden Visa concession application.

Impacts caused by COVID-19

The Government initially pointed the referred legal changes would take place until June of 2021. However, due to the current pandemic COVID-19, and the resulting social and economic crisis, there was no concrete progress in this regard and the changes were once again postponed.

Finally, on February 12nd, 2021, Law no. 14/2021 was enacted, which came to expressly establish the changes to the Golden Visa Portugal regime and when the Law takes effect.

Main changes to the Golden Visa regime

Among the changes, two main aspects stand out: (I) the delimitation of specific areas for the acquisition of residential properties, with a view to a Golden Visa concession request; (II) the increase in the minimum values for certain types of investments. Let’s see it in detail below.

1. Delimitation of the areas for the Real Estate Investment

Regarding real estate investment, there was no change in the minimum amounts required for Golden Visa purposes:

• 500 thousand euros, in the acquisition of property.
• 350 thousand euros, in the acquisition of property for rehabilitation*.

However, specifically regarding residential properties, these will only be eligible for the Golden Visa if located within mainland Portugal and on the islands of Madeira and Azores, under the terms of Portaria n.º 208/2017 of 13 July.

Therefore, properties for habitational purposes located in Lisbon or Porto will soon no longer be eligible for the Golden Visa Program.

2. Increase of the minimum investment values

Another very significant change concerns the increase in the minimum amounts of other categories of investments suitable for Golden Visa purposes. In particular:

• Capital transfers – Maintenance equal to or greater than €1.5 million (the previous law required a minimum of €1 million);
• Investment Funds – Minimum investment of €500,000 (previously the law required aminimum of €350,000);
• Incorporation and job creation – Minimum amount required of € 500,000for the incorporation of a company with 5 jobs and maintaining them permanently for at least 3 years (previously the Law required € 350,000);
• Research and Science Activities – Minimum amount required of € 500,000 (previously the Law required € 350,000).

The investments through the creation of at least 10 jobs, and the transfer of capital in an amount equal to or greater than € 250,000, in investment or support for artistic production, maintenance, or recovery of the national cultural heritage, did not have any changes.

The entry into force of the Law and the “Window of Opportunity”

Excellent news is that the legal changes mentioned above do not take effect until January 1, 2022.

In other words, during the year 2021 the old rules of the Golden Visa regime remain fully valid: therefore, the properties for habitational purposes located in Porto or Lisbon, as well as the minimum acquisition of € 350 thousand in investment funds, are still valid and accepted for the Golden Visa purposes.

However, please note that the Golden Visa application must have been submitted by 31 December 2021, not just the investment itself!

Therefore, if you are interested in taking advantage of this window of opportunity, make your investment as soon as possible, so that you have enough time to complete the investment, raise all the necessary documentation and submit your application by the end of this year. Otherwise, you will already be subject to the new, less favorable rules that will come into force as of 2021.

Finally, we highlight that Law No. 14/2021 does not affect requests submitted under the previous Law, authorizing the renewal of residence permits for the respective investors and the granting or renewal of residence permits for family members.

Roberta Fraser