Golden Visa Developments – July 2023 (final version)
On the 19th of July 2023, Portuguese Parliament finally approved the Draft Law 71/XV/1 that includes several changes to the Portuguese Immigration Law, with special impact on the Golden Visa Program. The new changes represent a relevant shift on the Portuguese Golden Visa but not the outright elimination of the program, as it was initially presented by the Government back in March. Law 56/2023 of 6 October 2023 has implemented those changes.
We have prepared a Q&A to outline what are the key changes going forward:
1. What are the Golden Visa investment routes that become no longer viable as from the pending publication of the new law?
The direct acquisition of real estate properties, under any circumstances is excluded, including the indirect investment in real estate through Portuguese based collective investment vehicles, such as venture capital funds. The €1.5m bank deposit investment route into a Portuguese bank account will also be excluded. These represent a significant change impacting the main investment routes.
2. What is then the Golden Visa investment route that will most likely be used under the new law?
It will likely be the the €500k investment in Portuguese based collective investment vehicles that remains in place (albeit not if those funds invest directly or indirectly in real estate). This route becomes the most logical route post-approval because of several advantages, namely simplicity, low tax implications for foreign investor, low compliance and possible higher yield (compared with the remaining options). What may become relevant in practice, is how to assess when a collective investment vehicle is deemed not to hold directly or indirectly real estate investments, as the criteria or threshold remain unclear.
3. What other Golden Visa investment routes less used in practice remain valid under the new law?
First of all, there are the routes based on job creation in Portugal that have acording to the statistics been seldom used due to several disadvantages that such route offered in practice to foreign investors compared to others. Those routes are: (a) direct creation of, at least, 10 job positions; (b) incorporation (or share capital increase) of Portuguese based company with the creation of 5 permanent jobs for a minimum period of 3 years (or maintenance of at least 10 jobs with at least 5 of them being permanent).
Secondly, there are the routes that generally do not offer a yield to the investors and, hence, have been seldom used by investors and are likely perhaps to continue so, unless specific opportunities arise. Those are: (c) investing €500k in public or private scientific research activities; and (d) investing €250k in artistic, cultural and national heritage investments. The capital invested in these routes may be reduced 20% if invested in low density areas of the Portuguese Territory.
4. What happens if the Golden Visa application is still pending and the investment route is eliminated by the new law?
The renewal of the existing Golden Visa applications approved until the publication of the new rules, even if the investment route is eliminated, will not be affected. The same applies to the reunification of new family members, that remains available at any time. The access to Permanent Residence Permits and Portuguese Citizenship is also safeguarded, under the terms currently in force.
5. What are other notable new rules for pending Golden Visa applications?
The renewal of Golden Visa applications will be converted into a Residence Permit for Entrepreneurial Immigrants, but its holders will only have to comply with the minimum permanency requirement of 7 days, consecutive or not, during the first year, and 14 days, consecutive or not, during the subsequent 2-year periods. Note that these are not days presence for tax but for immigration purposes only. For the the said Residence Permits, the competent entities must also verify (including on renewals) the compliance of such investments with the respective entrepreneurial project.
6. What are other innovations that the new Golden Visa law brings?
Residence Permits will under the new law be denied or canceled if the holders are subject to restrictions inside the EU, such as specific sanctions. This is in line with a recent EU Recommendation.
7. When is the new law expected to be published and enter effect?
The entry into force of the law occured on 7 of October 2023, the day following its official publication.
© Kore Partners, 2023
This briefing provides for general information and is not intended to be an exhaustive statement of the law. Although we have taken care to provide accurate information, this should not replace legal advice tailored to your specific circumstances. This briefing is intended for the use of clients and selected recipients. Queries or comments regarding this can be directed to kore@korepartners.com