The Golden Visa to Portugal. An Update

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The Golden Visa to Portugal. An Update

March 07, 2016

 If you are looking to sell your overseas property in Portugal, you would no doubt be curious about the Golden Visa scheme in Portugal and how it has been received so far by foreign investors. Essentially, any rich, non-EU investor can apply for the Golden Visa and will be given a residency permit to live in Portugal for investing up to 500,000 EUR in Portuguese real estate. This also gives them the right to travel across the Schengen zone, should they want to. 

The Golden Visa to Portugal has had mixed success so far, as the scheme enters its fourth year in 2016. While it is true that quite a few foreigners – especially Chinese investors – have taken advantage of the scheme and earned the right to residency permits in Portugal, the critics of the scheme warn of illegal practices and shady deals related to it.

The government of Portugal is very supportive of the Golden Visa, so much so that they are considering lowering the requirements a little further. Portugal's Deputy Prime Minister Paulo Portas says, "The golden visa has brought 1.27 billion euros of investments to Portugal in two years. It would be idiotic if we closed shop and other countries earned this money."

While there have been reports in the media of illegal visas being issued to rich some individuals, for the most part the scheme has encouraged many rich, high net worth individuals from Brazil, Russia, Angola and of course, China, to choose to live in Portugal.  

The investment of 500,000 EUR, required to apply for the Golden Visa is a real bargain as it’s not really a big thing for most investors from China, Russia or Hong Kong, who are looking to buy an overseas property in Europe.

Chinese investors actually pay a lot more for apartments in Beijing or Shanghai, so this isn’t really a big deal to them. Many are taking the opportunity to buy a home in Portugal with great enthusiasm. Indeed, the suburb of Estorial in Lisbon, which is one of the priciest neighbourhoods in the world, is very popular with wealthy Chinese investors.

Brian Tang, an investor from Hong Kong, one of the beneficiaries of the Golden Visa, says, "There's a huge appetite from China coming over to Portugal. Eighty percent of the applicants are Chinese.”

According to Mr. Tang, the Golden Visa to Portugal is attractive to wealthy Chinese because it is flexible – foreigners only need to be in Portugal for 7 days in the first year of their residency to qualify.

So far over 2788 Golden Visas have been issued in Portugal, which is more than that issued by any European country since the Golden Visas became popular as a way to attract more investment. Indeed, Portugal has been able to issue more Golden Visas than neighbouring Spain, which offers a very similar scheme to non-EU citizens.

However, not everyone agrees that the scheme has been as big a success as it is made out to be by the Portuguese government. Sérgio Alves of the Portuguese-Chinese Chamber of Commerce says, "The golden visa has not led to any investments in the economy - it is used exclusively for real estate. Most Chinese people who buy do not even live here permanently".

An opposition politician, the Socialist MEP Ana Gomes is one of the biggest critics of the Golden Visa. She says that the scheme does more harm than good in the long term and accuses her government of not looking at the potential risks: "There might be all sorts of corrupt and even criminal organisations behind those who are benefiting from these schemes…and it might be another very dangerous avenue to import additional corruption and criminality into the EU. “

Ms. Gomes adds that the whole scheme is bad for Europe - “I think this is indeed a race to the bottom, and it's actually something very anti-EU."