Category: Immigration News

Portugal’s esteemed Golden Visa program, a popular route for non-EU investors to gain residency in the country, is set to undergo significant changes starting October 2023. These amendments, recently re-approved by the Portuguese Parliament, mark a pivotal shift in the program’s structure and focus.

Since its inception, the Portugal Golden Visa has attracted a substantial number of investors, thanks to its relatively straightforward path to residency and eventual citizenship in Portugal, along with the added benefit of free movement within the Schengen Area. The program has been particularly appealing due to its real estate investment option, which has been a popular choice for many applicants.

However, the upcoming changes signal a strategic redirection of the program. From October 2023, the program will no longer include the option to invest in real estate. This decision is part of a broader effort to address housing shortages and price inflation in high-density urban and coastal areas, which have been partly attributed to the influx of foreign investment through the Golden Visa scheme.

The revision of the program aligns with Portugal’s commitment to channeling investment into areas that are more in need of economic development. By steering investors away from real estate in densely populated areas, the government aims to promote a more balanced regional development and direct investments into sectors that can contribute more significantly to the national economy.

While the exclusion of real estate investment might seem like a drawback, it opens up new avenues for potential investors. The program will continue to offer other forms of investment, such as capital transfer, investment in research activities, and contributions to the arts and national heritage. These alternatives not only align with the government’s economic objectives but also offer investors diverse options to contribute to Portugal’s growth while gaining residency.

The reformation of the Portugal Golden Visa program is a clear indication of the country’s adaptive approach to foreign investment and residency planning. It reflects a balancing act between welcoming investors and addressing domestic concerns. For prospective investors, this change necessitates a reevaluation of their investment strategies in Portugal.

As the October 2023 implementation date approaches, it is crucial for interested parties to stay informed and seek expert advice. The evolving nature of the Golden Visa program underscores the importance of understanding the legal and economic landscape of Portugal, especially for those looking to establish a significant connection with the country.

In conclusion, while the upcoming changes to Portugal’s Golden Visa program represent a significant shift, they also offer new opportunities for investment and involvement in the country’s future. As Portugal continues to refine its policies to reflect its economic and social goals, the Golden Visa program remains an attractive option for non-EU investors seeking residency in a country that is as dynamic as it is welcoming.

The United Kingdom has recently made a significant move in tightening its visa regime for citizens of Dominica, signaling growing concerns over the Caribbean island’s citizenship-by-investment program. This development reflects a broader scrutiny by both the UK and the European Union of the Caribbean second citizenship programs, particularly focusing on their due diligence processes.

Dominica’s Citizenship Program Under Scrutiny: Dominica has been particularly highlighted in this context. The island nation, known for its relatively affordable and quick citizenship-by-investment program, has come under fire for allegedly granting citizenship to a wide array of individuals, including those with questionable backgrounds. Concerns have been raised about the lack of rigorous vetting, leading to sanctioned individuals, and those with ties to countries like Iran and Russia, gaining Dominican citizenship.

UK’s Response: Ending Visa-Free Travel In response to these concerns, the UK has taken a decisive step by ending visa-free travel for Dominican citizens. This move comes despite previous assurances from the Dominican government regarding the integrity of their citizenship program. The UK’s decision is a clear indication of its dissatisfaction with the current state of affairs and a call for more stringent measures in vetting applicants.

EU’s Stance and Ultimatum: Similarly, the European Union is closely monitoring the situation. The EU has expressed its apprehensions about the potential security risks posed by the lack of thorough background checks in these citizenship programs. In a stern warning, the EU has given Dominica, along with other Caribbean nations offering similar programs, a one-year period to implement significant changes. Failure to comply could result in the EU revoking visa-free travel privileges for their citizens, a move that would have substantial implications for these countries.

The Future of Caribbean Citizenship Programs: The recent actions by the UK and the EU put a spotlight on the Caribbean citizenship-by-investment programs, questioning their sustainability and future. These programs have been a significant source of revenue for many Caribbean islands, attracting a global clientele seeking a second passport for various reasons, including ease of travel and financial benefits.

However, the growing international concern over security and transparency is forcing these nations to reevaluate and potentially reform their citizenship programs. The focus is now on enhancing due diligence processes to ensure that only legitimate, law-abiding individuals are granted citizenship.

Implications for Investors and the Caribbean Nations: For investors considering Caribbean citizenship programs, these developments underscore the importance of understanding the evolving international landscape and potential future challenges. The tightening of visa regimes could affect the attractiveness of these passports, impacting their value proposition.

For the Caribbean nations, the pressure from the UK and EU presents both a challenge and an opportunity. While there is an immediate need to address the concerns raised, there is also an opportunity to strengthen their programs’ credibility and global standing by adopting more robust and transparent vetting processes.

In conclusion, the UK’s recent decision to end visa-free travel for Dominican citizens and the EU’s ultimatum represent a critical juncture for Caribbean citizenship-by-investment programs. The coming year will be pivotal in determining the future direction of these programs, with significant implications for international mobility, security, and the economies of the Caribbean nations involved.

The proposed scheme, called the Electronic Travel Authorization (ETA), will require visitors from countries outside the European Union to apply for permission to enter the UK before they travel. The ETA will be similar to the Electronic System for Travel Authorization (ESTA) used by the United States.

According to the government’s announcement, the ETA will “strengthen the UK’s ability to prevent and control the spread of COVID-19 and other viruses and variants”. The system will also improve the government’s ability to identify potential security threats and ensure that only those who pose no risk to the UK are allowed to enter the country.

Under the proposed scheme, travellers will be required to provide their personal details and travel information, including their passport details, the purpose of their visit, and their accommodation details. The application process will be online, and travellers will receive a decision within minutes.

The ETA will be introduced in phases, with the first phase planned to begin in 2024. The scheme will initially be voluntary, with visitors from certain countries required to apply for an ETA before they can enter the UK. However, the government has stated that it may become mandatory for all visitors in the future.

The introduction of the ETA has been welcomed by some, who believe that it will help to strengthen the UK’s borders and improve security. However, others have raised concerns about the potential impact on tourism and the additional costs and administrative burdens that may be placed on travellers.

In response to these concerns, the government has stated that the ETA will be “simple and straightforward” to apply for, and that the cost will be “reasonable”. The government has also stated that the scheme will be regularly reviewed and updated to ensure that it remains effective and efficient.

Overall, the government’s announcement of the ETA scheme represents a significant step towards strengthening the UK’s borders and enhancing security measures, and will likely have a major impact on international travel to and from the country in the years ahead.

Following the announcement of a new law that will limit non-resident investors in Portugal’s booming property market, some of Europe’s most popular destinations for foreign investment are now seeing a drop in demand. The Golden Visa programme, which allows non-EU citizens to gain residency status by purchasing property worth more than €280,000 (£250,000) has been hugely successful for many European countries but there are fears it could lead to a rise in homelessness as those who had planned on selling up now find themselves stuck with an asset they can no longer sell on at the price they were hoping for.

The Golden Visa Programme will be Halted

The Golden Visa programme will be halted and replaced by a new law to prevent housing crisis in Portugal, according to the government.

The so-called ‘golden visa’ programme was launched in 2012 as a way for people from outside the European Union (EU) to get residency permits if they invest at least EUR 280,000 (£250,000) into Portuguese companies or assets. It has been criticised for attracting rich investors who buy property but don’t create jobs or contribute much economically.

The country has seen a major influx of foreign property owners coming in as a result of the scheme

Portugal has seen a major influx of foreign property owners coming in as a result of the scheme. It is one of the most popular places for foreigners to buy property and there is a risk that the country will be flooded with foreign property owners if this continues.

Portugal’s economy is growing faster than almost any other Eurozone country and it needs to stop its domestic market being flooded

The Golden Visa scheme was introduced in 2012 by former prime minister Jose Socrates, who said it would encourage wealthy foreigners to invest in Portugal’s real estate market and help boost the country’s economy. However, since then there has been a major influx of foreign property owners coming in as a result of the scheme – with many buying properties without ever intending on living there themselves.

Those who already have golden visas will still be able to live in Portugal but they may see their benefits cut.

Those with a Golden Visa will no longer qualify for tax breaks and will be subject to the same tax laws as other Portuguese citizens.

It is expected that many of those who have bought into Portugal will sell up now that the law change has been announced, which could put pressure on property prices across Europe

It is predicted that this will be good news for investors looking to buy property in Portugal as it should help to bring down prices and make them more affordable.

There are risks associated with buying investment properties from outside your own country

There are risks associated with buying investment properties from outside your own country. You may not be able to sell it when you want to, or at all. If this happens, then you could end up forced to sell at a loss.

Furthermore, if the property is rented out (as most investment properties are), there may be restrictions on how long tenants can stay in the property and what kinds of rental agreements they sign up for. This means that even if someone wants to rent from you as soon as possible after purchasing their Golden Visa, they might not be able to do so because of these restrictions set by Portugal’s government.

In addition, some countries offer tax benefits for foreign investors who purchase real estate within their borders–but Portugal does not currently offer any such incentives; therefore investors who buy through this program may find themselves paying higher taxes than those who invest locally instead

Conclusion

If you are looking to invest in property overseas, it is important to do your research and understand the risks involved. The golden visa programme was a great opportunity for investors but it has now come to an end in Portugal. This could mean that prices will fall as there are fewer buyers coming into the market from outside Europe who want to purchase their first home or rental property here.

On February 16, 2023, the Portuguese government announced that it would be ending the Golden Visa program, which has been a popular route for foreign investors to obtain residency in the country. The program had been in place since 2012 and had generated over 10 billion euros in investment during that time. However, concerns about rising housing prices and the impact of the program on the local housing market have led the government to make this decision.

The Golden Visa program allowed non-EU citizens to invest in Portuguese real estate or other approved investments and receive residency permits in return. The program was seen as a way to attract foreign investment to the country and boost the local economy. However, it also led to a surge in property prices, particularly in Lisbon and Porto, which made it more difficult for locals to afford housing.

In addition to ending the Golden Visa program, the Portuguese government also announced measures to address the country’s housing crisis, including restrictions on short-term rentals through platforms such as Airbnb. Under the new regulations, properties in Lisbon and Porto can only be rented out for a maximum of 90 days per year, while properties in other areas can be rented out for up to 120 days per year.

These measures are intended to encourage more long-term rentals and make it easier for locals to find affordable housing. The government has also announced plans to build more social housing and to introduce tax incentives for landlords who offer long-term rental contracts.

While the end of the Golden Visa program may be disappointing for foreign investors, it is important to note that Portugal remains an attractive destination for investment. The country has a stable political and economic environment, a high standard of living, and a favorable tax regime for foreign investors. The government’s efforts to address the housing crisis may also make it a more attractive destination for those who are looking to live and work in the country long-term.

In conclusion, the end of the Golden Visa program and the government’s efforts to address the housing crisis in Portugal are significant developments that are likely to have an impact on the country’s economy and property market. While there may be some uncertainty in the short-term, these measures are intended to create a more sustainable and affordable housing market, which may ultimately make the country a more attractive destination for foreign investment and long-term residency.

The ARI (Residence Authorization for Investment activity) or as it is more widely known as the Golden Visa, launched to grant non-EU citizens with the opportunity of acquiring a temporary residence permit through adhering to one of the following investments in Portugal:

1)A capital transfer of €1million;
2)Creation of 10 new job posts:
3)Real estate acquisition for the sum of over €500,000 for a property that was built within the last 30 years;
4)Real estate acquisition for the sum of over €350,000 for a property that falls under all the following categories – if it was built over 30 years ago, situated in a densely populated urban area and that the investor intends to refurbish the property;
5) An investment of €250,000 in artistic productions;
6) An investment of €350,000 in funds for participation units – similar to shares – that invest at least 60% of the capital in Portuguese companies; or 7) An investment of €350,000 in a company that creates or maintains, at least, 5 job posts.

Recently the Regulative
Decree, n. º 84/2008, that was released as of 05 November – which establishes
the procedures that are to be followed in obtaining this residence permit – has reformed. Various new rules have been introduced to comply with the new kinds of investments:

Regarding the investment in real estate for the minimum sum of €350,000, having the property built over 30 years old and so forth, the applicant now requires to present a document evidencing that the property was built over 30 years ago or alternatively, present a declaration from a Portuguese City Hall stating that the property is situated in an densely populated urban area. In addition, a mandatory document is required to prove that the property is either undergoing refurbishment or will undergo future refurbishments;

The opportunity to make the investment through the acquisition of participation units. This investment option results in the investor presenting a compulsory certificate of ownership to the participation units (similar to shares) along with a declaration stating that the funds invested of at least 60% are to be invested into Portuguese companies. Furthermore, this particular investment option is to generate profits with the funds invested. The necessary documents to instruct the Golden Visa request must be obtained within the management entity of the Fund;

SEF have also released further options to make investments through the following activities: (i) the raise of the share capital of a pre-existent company or acquiring the share capital of a previous partner in addition to the creation of at least 5 new job posts or to retain 5 current employees; (ii) to incorporate a company where the share capital is to be at least the €350,000 in addition to hiring 5 employees. As a requirement for this investment route, the investor is to submit proof of this investment with the company certificate as well as the agreement related with the shares acquisition; or

The investor can choose another route to investment (for example, the transfer of €1 million to a bank account in Portugal) to be held there for the 5-year visa period during the temporary residence permit by changing their investment option. Nevertheless, the new investment must total to the exact amount as the original investment made prior.

Other investment add-ons

In some cases, the total amount of investment could be reduced by 20% if the investor chooses a location that is low income or not densely populated.

For more information, please do not hesitate to contact our team in Portugal:

Marina Andrade, Country Manager/Lawyer
Marina@coatesglobal.com
Mateus
Leite de Campos, Lawyer
Mateus@coatesglobal.