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Portugal's Golden Visa program, launched in 2012, has been highly successful in attracting international investors through various investment options, including real estate, venture capital, and more.
However, the program has faced criticism due to its impact on housing prices and potential exploitation for illicit activities.
In response to these concerns, the socialist Portuguese government initially announced plans to end the program in 2023. However, after reconsideration and pressure from various stakeholders, a proposal was made to amend the program instead.
This article provides an overview of the proposed changes and what investors can expect in 2024 regarding the Golden Visa program in Portugal.
Context
What is the Golden Visa
Launched in October 2012, the Portuguese Golden Visa program enables non-EU nationals to obtain a residence permit by making an investment in Portugal.
The main goal of the program was to attract international capital to Portugal, which was in great need after the 2008 economic crisis. The program has been incredibly successful, raising over €6 billion since its inception. More than 12,000 people have applied and received one. They have brought along 16,600 family members who are dependent on them (thanks to the "family reunification rule").
The Golden Visa gives people the opportunity to live, work, and study in Portugal. They can also travel freely to other European countries.
After living in Portugal for five years, they can apply to become Portuguese citizens.
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The investment scheme
To be eligible for Portugal's Golden Visa, you need to make a qualifying investment.
There are several investment categories to choose from, including real estate, venture capital funds, transferring capital, forming a company, or making a donation.
By investing €280,000, which is one of the lowest investment amounts in Europe, you can meet the requirements to qualify for residency.
Obviously, this attractive opportunity has garnered significant interest among foreigners.
What happened in 2023
The Golden Visa has been a success, attracting numerous foreign investors to the real estate market (85% of visa applications have been through property investment).
However, this surge in investments resulted in a significant increase in housing prices, subsequently leading to a housing crisis (in 2022, the average rental price soared by 37%) and adversely impacting local communities. Currently, prices in Lisbon are higher than in Lyon (France), as shown in our picture below.
Also, Portugal has faced criticism for allowing the Golden Visa program to be exploited by corrupt individuals for illicit activities, such as money laundering.
On February 16th, 2023, the socialist Portuguese government announced measures to address the country's housing problem, involving putting an end to the Golden Visa Program.
However, due to increasing pressure from local governors, constitutional lawyers, and property developers, the government was compelled to reconsider his decision.
Then, 4 months later, on June 20th, 2023, the Portuguese Parliament put forth a proposal to retain the Golden Visa program instead of abolishing it.
Instead, they suggested an amendment to the "Mais Habitação" (More Housing) bill.
The "More Housing" is a government initiative is designed to address the housing crisis in the country and enhance access to suitable housing. Its objectives include increasing the availability of affordable homes and improving the living conditions of Portuguese families.
Under the proposed changes to the Mais Habitação, three main "investment options" would no longer be valid or suitable.
On July 20, 2023, the Portuguese Parliament approved the bill.
To make it easier for you to understand, we have created a summarized table below.
What to expect in 2024
No, the Golden Visa Program won't end in 2024, but certain investment options would no longer exist.
The changes aim to encourage diverse forms of investment while maintaining the appeal of the program.
What might change
The amendment would close down three primary investment avenues.
In 2024 (date to be confirmed), three schemes might no longer be available for obtaining a visa:
- Transferring €1,500,000 or more as capital
- Purchasing real estate worth €500,000 or more
- Investing €350,000 or more to renovate properties that are at least 30 years old.
Furthermore, after the law takes effect, the government has announced that existing permit holders under the golden visa program will be transitioned to the D2 entrepreneur visa.
However, these individuals will be exempt from the 183-day rule and will still be required to spend only an average of 7 days per year in Portugal.
Then, it might be a good time to buy a property now in Portugal, before these changes come into effect.
What shouldn't change
The rest won't change.
These investment opportunities will be maintained in the Portuguese Golden Visa:
- Transferring €500,000 or more to purchase shares in venture capital funds.
- Creating at least 10 jobs.
- Spending €500,000 or more on research conducted by public or private scientific research institutions.
- Investing €250,000 or more to support artistic production, recovery, or maintenance of national cultural heritage.
This table will provide a clearer overview of the information.
| Category | Requirement | Status |
|---|---|---|
| Capital Transfer | Transferring €1,500,000 or more as capital. | ❌ |
| Real Estate | Buying real estate worth €500,000 or more. | ❌ |
| Real Estate Rehabilitation | Investing €350,000 or more to renovate real estate properties that are at least 30 years old. | ❌ |
| VC Fund Investment | Transferring €500,000 or more for buying shares in venture capital funds. | ✅ |
| Job Creation | Creating a minimum of 10 jobs. | ✅ |
| Research Funding | Spending €500,000 or more on research conducted by public or private scientific research institutions. | ✅ |
| Cultural Heritage Support | Investing €250,000 or more in support of artistic production, recovery, or maintenance of national cultural heritage. | ✅ |
| Commercial Company Investment | Transferring €500,000 or more for starting a company or increasing share capital, while creating five permanent jobs. | ✅ |
What's the situation now regarding the Portugal Visa?
The Golden Visa program will change only once the law is approved, validated, and published.
People who hold a Golden Visa
Individuals who have already completed or started their investments should not worry about any consequences that may arise from potential changes to the program.
In short, there is no retroactive effect and it will still be possible to renew such residence permits.
People who have applied for a Golden Visa
Actually, following the announcement on February 16th, there was a surge in new applications as individuals rushed to take advantage of the golden visa before its termination.
According to the government, the new law for the Golden Visa will not apply retroactively to current applications and renewals.
People who are about to apply for a Golden Visa
Currently, the program remains open until the new legislation is published, allowing applicants to still participate in the Golden Visa Program.
New applications for residence permits related to investments, artistic production support, or cultural heritage recovery are still being accepted.
When will the changes be implemented?
At present, nobody has the answer.
If we look at the past, a similar situation unfolded when significant changes were proposed for the Golden Visa program in 2021.
However, these changes were not put into effect until January 1st, 2022. During the interim period, hundreds of new Golden Visas were obtained before the changes came into play.
It is possible that the new changes to the Golden Visa program may not be implemented until 2024, considering the previous instance where significant changes took some time to come into effect.
On July 2023, the Parliament approved the end of these two golden visa pathways.
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