What's new
The Golden Visa program was launched in Portugal in 2012 as a way to attract foreign investors to the country - it involved 6,500 people and brought more than 5 billion euros to the economy. However, in November 2020, the Portuguese government announced that it had approved the possibility of legislative amendments to this program to increase the minimum amount of investment in real estate in the country.
Innovations can greatly affect the real estate market in Portugal, because it is in the regions that have fallen under the new rules that 95% of all transactions are currently carried out. But in order for all those foreigners who were planning or still thinking about buying housing in this country with the possibility of obtaining a residence permit to be able to do it at a calm pace, a transition period is provided. It will take place during the current 2021 (no more precise dates are indicated in the statement of the Portuguese government), during which changes will be introduced.
Therefore, at the moment the program operates in the old way. According to experts, the transition period is primarily due to the presence of a large number of proposals in the regions that have fallen into disgrace, as well as to support developers. Also, it is not entirely clear how exactly the program will work - most likely, there will be fewer concessions for secondary real estate. And for new projects, for those that affect the appearance of the area and improve its infrastructure, most likely, there will be the possibility of foreigners acquiring a residence permit.
How did the innovations affect the real estate market?
Information about the change in the program prompted those wishing to catch the last car of the departing train. The number of applications for the purchase of housing has increased, as well as the number of potential customers ready for remote transactions. The excitement among foreigners is noticeable to the naked eye: if in one of the companies from August to December last year 12 deals were closed under the "Golden Visa" program, then in just the first month of 20221 there are already 7 of them.
To do everything right and on time, there is still time until March. Then the rush and excitement may begin, especially given the current realities: the embassy is working, then not, notarization and apostille can be done, then problems arise. Therefore, for those who want to take advantage of the program and purchase real estate in popular areas of Portugal, combining the purchase with obtaining a "golden visa", now there is a big incentive to accelerate.
After the transition period, the Golden Visa program will continue to operate only for inland mainland areas, except for Lisbon and Porto with adjacent areas and islands. This will serve as an impetus to the development of infrastructure in these places, as well as to an increase in real estate prices. Right now, for those who want to invest profitably and play long-term, it may be worth looking at real estate in Lisbon, Porto and on the coast. When the restrictions come into force, the relevance of other regions will increase and prices may rise, but this is not guaranteed, since the number of transactions under the Golden Visa program is, according to various estimates, 3-5% of the total.It is also worth noting that the current market in Portugal was very dynamic even before the amendments came into force.
According to insider data from experts of the local real estate market, in January 2020, more than 30 accounts were opened in a branch of a bank in Portugal for operations under the Golden Visa program, and the Chinese are the leaders in this matter. Demand is very high, while transactions are conducted remotely. And there are more and more foreign buyers who invest significant funds in facilities that guarantee profitability and with the possibility of a full return on investment through the buy-and-sell back option. That is, the developer fully repurchases the asset after 6 years, upon receipt of a residence permit by the investor.
In addition to the obvious increase in the interest of foreign investors who seek to enter the program through investments in Porto and Lisbon, the volume of offers put up for sale has increased, especially for the secondary market, private houses and apartments. Objects that previously generated income from tourist rentals began to appear in large numbers on the market - with the closure of borders, this has become less relevant, based on today's moment.
Experts note that now there are more opportunities to bargain on the price of objects and get a better discount - many sellers have an urgent need to sell assets. This is used by large investors who are now buying very profitable buildings, both residential and commercial. At the same time, it is important to clarify that there was no collapse in prices: it is possible to get a small discount on new buildings, but provided there is a good location, a view of the ocean or the historical center, with high-level finishes, etc., prices do not fall at all compared to the level a year ago.
Advantages of a residence permit in Portugal
Portugal is a politically stable country with a developed economy, with a low crime rate and high standards of living and healthcare. Thanks to the purchase of real estate in this country, a residence permit can be obtained not only by those who invest their funds, but also by their next of kin. Holders of a residence permit receive the right to live, work and study in Portugal, enter the Schengen countries without a visa, as well as open a business in any EU country. There is preferential taxation for the first 10 years, while income received outside Portugal is not taxed.
Grounds for obtaining a residence permit
The minimum amount for investment under the "Golden Visa" program in Portugal at the moment is 500,000 euros. Those with 1 million euros or more can transfer this capital into the country's economy and then apply for a residence permit. Investors who are ready to make smaller investments can take a closer look at the option of purchasing real estate that is more than 30 years old or one that is located in urban renovation areas for a total cost exceeding 350,000 euros. Investors who have the desire and opportunity to invest similar amounts, but otherwise, it makes sense to look at such options:
- transfer of capital worth from 350,000 euros to invest in research activities carried out by public or private research institutions
- investments worth from 250,000 euros in works of art or art support, for the restoration/restoration of national heritage sites
- acquisition of shares of investment funds or venture capital funds in the amount of 350,000 euros or more to capitalize companies created under Portuguese law, the maturity of the shares at the time of investment must be at least five years, and at least 60% of the investments must be realized in commercial companies with the head office of the territory of Portugal
-transfer of capital in the amount of 350,000 euros or more to create a company with a head office in Portugal, plus the creation of five permanent jobs; or increase the share capital of an existing commercial enterprise with a head office in Portugal, plus the creation or maintenance of at least five permanent jobs for a minimum period of three years.
Procedure for obtaining a residence permit
First, the necessary documents are being prepared: a Portuguese INN is opened, a bank account to which funds are transferred for the purchase and a real estate purchase transaction is concluded. Then the application for a residence permit is submitted to the consulate at the place of residence or to the Service for Foreigners and Borders in Portugal(SEF). In order to take advantage of the Golden Visa program in Portugal, a real estate buyer must submit an application on the websitewww.sef.pt or in one of the country's diplomatic or consular missions abroad. After these steps have been completed, it is necessary to submit biometric data to the SEF in Portugal, after which a residence permit is issued.
Usually, the period of registration of a residence permit takes about six months, in which the examination of the application and the delivery of biometrics last the most. Due to the pandemic, these deadlines were extended by several months. The first residence permit can be obtained 4 months after entry on a visa. Its validity period is one year, then two extensions of two years are possible.
List of required documents
- international passport
- certificates from the tax service and customs administration
- contract of purchase‑ sale of real estate in Portugal (if it is the basis for a residence permit)
- criminal record certificate
- medical insurance
- certificate from the Service for Foreigners and Borders in Portugal (SEF)
- bank statements confirming the availability of funds for living in Portugal.
The cost of registration
The minimum fee for obtaining a residence permit in Portugal is 83 euros. Further expenses may vary greatly depending on the basis for obtaining a residence permit. In the case of participation in the Golden Visa program, you will have to pay the largest fee of 5,900 euros.
Grounds for refusal
Most often they assist in obtaining a residence permit in the case when a foreigner has a criminal record, when providing deliberately false data and documents, in violation of Portuguese legislation. It is important for investors to keep their investments in the Portuguese economy for five years.
Extension
When extending a residence permit, it is important to observe the condition for the preservation of the asset on the basis of which the residence permit was issued, as well as to prove that the foreigner spent the required minimum limit in Portugal: 7 days in the first year of possession of the residence permit and 14 days in the subsequent two-year periods for which a re-residence permit is issued. At the same time, now in order to extend the residence permit, there is no need to visit Portugal - this is done remotely on the website of the Portuguese Immigration Service (SEF), whose employees, after paying the fee, send the residence permit by mail.
Permanent residence in Portugal
The possibility of permanent residence in Portugal appears five years after the regular receipt of a residence permit. Permanent residence is issued indefinitely, but the resident status is confirmed every five years. If foreigners participate in the Golden Visa program, they can apply for permanent residence after 5 years of legal and continuous residence in Portugal with a residence permit, if there are enough funds for living, housing and basic knowledge of the Portuguese language.
Portuguese citizenship
After 6 years of legal and continuous residence in Portugal, citizens of non-EU, EEA and non-Swiss countries, as well as their families, apply for Portuguese citizenship and a European passport subject to the following conditions:
- permanent residence in Portugal for 1 year before applying for citizenship
- proof of legal residence in Portugal
- fluency in Portuguese
- no criminal record and good reputation
- no debts to the tax and other authorities.
Portugal recognizes dual citizenship, therefore, it is not necessary to renounce the first citizenship when obtaining a Portuguese passport.
Thank you for your help in preparing the material:
Evgeny Berezin, CEO of the companyMENU Portugal
Oksana Mateush, Head of the companyRiviera Portugal
Oleg Railean, partner of the company Amber Star Real Estate
Yulia Titova, Director of the companyRENTSALE