Diogo Capela: All of this takes time. And so until then, it's possible for new applications to be submitted. I wouldn't say that this will occur before August, for example. So it's not likely that this will happen in April. Like you were saying. Instead, I actually believe that to be optimistic this will only happen on August or even after that.
Salman Siddiqui: Welcome to the investment immigration podcast by you UGlobal.com. With weekly in-depth interviews with the world's leading investment immigration professionals. Hello and welcome, everyone. We are now going to talk about Portugal today and a lot has been happening in the country. I'm sure a lot of our listeners must be aware that big changes in the investment immigration program has been announced there. Some were quite surprising. A lot of people in the industry weren't expecting such a drastic measure to come, and at least not so soon. There were some talk about it. But just to give a brief to our listeners before we talk in detail with our guests, what has happened is the country's prime minister has announced that the program is essentially going to come to an end. Now, what will be the impact of it? What is the reasons behind it? He did explain a little bit in his speech and he basically referred to the housing crisis in the country. And he used that as a pretext to announce that the Golden Visa program is going to come to an end. Now, to unpack all of this, we have a guest today who is based in Lisbon right now. He's an immigration lawyer. His name is Diego Capela. He's the founding partner at La Marche, Capela and Associates. Welcome to the show.
Diogo Capela: Thank you very much, Salman And thank you for the invitation from you Global. And thank you to all people that are listening right now.
Salman Siddiqui: Thank you. And let's get to the heart of the matter. Everybody is so surprised about it and everybody wants to know from you what is the status of Portugal's golden visa program today? Can we say that it has ended completely and with immediate effect?
Diogo Capela: So it's very important to explain. Last Thursday, to be precise, on the 16th of February, the Portuguese prime minister announced a package of measures to help overcome Portugal's housing problem. These measures will be subject of a public hearing. And on the 16th of March, the Council of Ministers will meet to create a set of draft laws which will then be presented to Parliament for discussion. In that announcement, the prime ministry, as mentioned, that one of those measures will be the end of the Golden Visa program. But we know nothing about the date for that and we only know that there will be a discussion in Parliament. We don't know when this will occur, actually, and we know that it is likely that the government, after parliamentary approval, will give a reasonable time frame for the end of the program. At least that is how we hope it will happen, actually.
Salman Siddiqui: And thank you for explaining the chronology of these announcements. But what most people would like to know, is it correct to say that as of today, non EU nationals can no longer apply to the program?
Diogo Capela: No, that is not correct. Actually, the Golden Visa program will remain in force until its termination is discussed and approved by Parliament. In other words, at the moment it is still possible to submit golden visa applications after the end of the program. The processes that have already been registered will be safeguarded and therefore will not be affected by its end.
Salman Siddiqui: So you're saying that a non EU investor at this moment in time still has this time to submit an application, for example, to your firm to get their application in process?
Diogo Capela: That's right. As I told before. There is a need for a formal parliamentary discussion and only after that this program will probably end. We think that this is not something that will occur very soon. All of this takes time. So until then, it's possible for new applications to be submitted. Yes.
Salman Siddiqui: And just about this parliamentary process, since you mentioned that, I want you to also talk a little bit about this whole how the process works in Portugal, because most people, especially our listeners in America, would not know about it. So by middle of March, a parliamentary debate will be held on exactly these announcements that were made by the Prime Minister. And if they get approved, then by April or things will be formally ended. Is that how it is?
Diogo Capela: Not quite. After this announcement, it's expected for the government to proceed with the public hearing during one month, actually. So until the 16th of March, the government will try to understand with the stakeholders if these measures make sense or not, and trying to articulate everything so they can prepare draft. Loss after the 16th of March in or after the Council of Ministers to actually be presented all of them to the Parliament for discussion. But the Parliament's discussion, we don't know when this will happen, but normally what happens is that we have the draft laws first and then there's a discussion for all the details involved in this. So it's prepared from the Parliament. The final draft which will be discussed form on the Parliament in general, discussion on the Parliament. And so I wouldn't say that this will occur before August, for example. So it's not likely that this will happen in April. Like you were saying. Instead, I actually believe that to be optimistic this will only happen on August or even after that.
Salman Siddiqui: Okay. All right. There's still some time. That means for a lot of people to submit their applications, if that is the time frame. And that's how it plays out. But just to a little bit more understanding about how Portugal's parliament is currently politically, maybe you can enlighten us about it. So is there a chance that it might not get approved in parliament or does the current government have enough majority in the Parliament that this is surely going to happen?
Diogo Capela: It's true that the government, as the majority of the Parliament and it's very likely that these measures or some of them will be approved and about the end of the Golden Visa. It seems clear to me that this will actually occur. So I have no doubts that the Government will vote for it and the programme as we know it. It doesn't mean that they will not try to figure out another plan until the end of the discussion and try to arrange another way to keep attracting foreign investors.
Salman Siddiqui: Okay, we're going to talk about that later. But let's stick to what is happening right now. And I want you now to actually help us understand what the country's prime minister, Mr. Costa, said when he announced the halting of the Golden Visa program. He said something like, If I remember correctly, he said it is aimed at fighting price speculation in the real estate. What did he mean by that? What is happening in the real estate in Portugal?
Diogo Capela: So the Prime Minister believes that the golden visa has caused a sharp increase in the value of properties and in the price of rents, especially in residential properties. Having created the problem of real estate speculation, there are no statistics to prove this is true or false. Actually, what we know is that since its inception in 2012, the Golden Visa program has attracted around 11,000 real estate investors in total. It seems to me that such a small fringe of people would not be able to influence the entire property market in Portugal to the point of increasing property prices.
Salman Siddiqui: Right. So if that is the case, and then why is he making this move, especially at this point in time? For example, he talks about real estate, but an investor can also put their money in something else in a company or in a bond or in a business using the Golden Visa. So could you help us understand the background of the politics here?
Diogo Capela: I think that you are right. So the program itself has eight different ways to invest, and the real estate investment types are only two of them. But just let me explain you the background on this. According to the government, the Golden Visa program has already fulfilled its purpose. This is the Prime Minister's words. Actually, we do not know exactly what he means by this, since no concrete objective was ever presented besides attracting foreign investment, of course. At the same time, he also claims that this program has caused an increase in value of real estate prices and even in the value of rents in Portugal. As I was saying before, associating the program to the problem of real estate speculation, there is indeed a housing problem in Portugal, actually in big cities mainly that seems clear to me and the majority of people in Portugal. This is not true for the whole country, nor does it seem true to the Golden Visa program is the cause for this. There are several factors that may have influenced this housing crisis, and there is no point in talking in detail about all of them here, but they mainly go through an increase in demand for the available supply and the fact that salaries in Portugal are not keeping up with generalized increase in prices. Among other factors, of course.
Salman Siddiqui: Right. And that's the interesting bit to me. They mentioned the housing crisis and especially in big cities, for example, in Lisbon or Porto. But didn't the government actually restrict investors already in big cities in 20 to 2022? So that's right. What's the point of scraping the golden visa?
Diogo Capela: Yeah, true. It seems like contradictory. Exactly. Not long ago, the government implemented measures to attract real estate investment to the interior regions of the country, but also to the Azores. And Madeira Islands. And now what the government wants is to end the Golden Visa program once and for all. This does not make any sense in my perspective, and it's difficult to understand why there is a need for a change of strategy. It should also be said that the president of the regional government of Madeira has already openly opposed to this idea of ending the Golden Visa program. As he considers it. It is important to maintain this program for the development of the region. I believe he's not alone, and probably there's other people that other politics that actually don't like this idea to end this program.
Salman Siddiqui: Right. And that's exactly what I was also thinking, that what happens to real estate development in the autonomous regions of like Madeira, you mentioned, and Azores, and the government wanted to push foreign investors to put their money there. But now that won't happen.
Diogo Capela: Yes, exactly. We don't know the reasons. We have no statistics nor studies whatsoever on the impact of the golden visa on those areas. We actually think they have been very good to attract people to those areas and try to develop those areas that normally do not present a very, very good option for foreign investors to invest in. But right now, according to the Prime Minister, words, something as occurred on the government's mind. And since January 2022, they have been looking in detail into this program and they feel that it doesn't mean it is not worth it to keep it. So they are trying to finish with this investment type, the real estate, but also for all other types of investments.
Salman Siddiqui: Right. I want to also understand if there were other factors in play. We already have discussed a little bit how the housing crisis has been used as a pretext, but it's not really the whole story, is it? Especially the context of the pressures that are coming from the EU Commission, which wants to see programs like the Golden Visa to basically end in Member states. Do you think that was a factor, especially where the EU Commission has been quite consistently saying that it's a security risk and it has been applying pressure and a lot of countries?
Diogo Capela: That is true. They have been vocal about that, but I honestly don't know if that was the case or not with this. Officially, there are no pressures to Portugal in order to end with this program, but we never know if an officially there haven't already been.
Salman Siddiqui: Right. Of course. And also for our listeners, I want to give the context that Portugal is not the only program which has taken this sort of announcing the end of its golden visa. Recently, we heard what happened in Ireland. Also, Spain has also reportedly its real estate option is also going to be off the market. So it seems like there's a trend going on in the EU. Now, let's move on from the topic a little bit and tell us what will happen to the pending applications. Will they still have a chance to proceed or will they be stuck in limbo?
Diogo Capela: That's quite important question, actually. In fact, in addition to the end of the Golden Visas, the Prime Minister also announced that the golden visa holders, the ones that already have the residence cards, we have made an investment in real estate, will only be able to renew their residence cards in three different situations. First of all, when they use the property as their own primary residence. Second option is when their children are using the property as their own primary residence or when they have their property leased in the long term housing market. Not explaining very clearly what they understand about long term housing, but I believe that long term, as opposed to short term leases, it seems to me an unconstitutional idea actually, as it violates the principle of legal security, the protection of confidence and even the investor's right to private property and the rule of law itself. We believe that this measure will end up not entering. Into force for that very reason. So I do not believe that these people should worry.
Salman Siddiqui: Okay. But it seems the government with that announcement is basically making the renewal of the visas conditional. Like if your property is leased in the long term, then only your applications are safe. It seems like an addition, isn't it?
Diogo Capela: Yes, they are trying to put these. These are all, let's say, this barrier to people to actually renew their residence cards. But in my perspective, this is against the rule of law, because when the program was created and when these applicants have submitted their applications to get the golden visa in their minds, this was a five year long program and the rules were already established at the beginning. And now what the government wants to say to those investors is like this. Now the rule has changed in the meantime. So we are making this differently and that's not a big problem when you're talking about increasing of prices in the properties or increasing of taxes over the property price. But here is a structural problem, which is it's an amendment that is very significant on the program itself and violates the constitution of the Portuguese Republic. In my perspective.
Salman Siddiqui: And probably the government is setting itself up for a lot of legal challenges. But tell me your clients, they must be freaking out with all these developments. You must be getting a lot of phone calls, especially maybe in the middle of the night. How are you handling all of that?
Diogo Capela: So for now, our main concern in our firm has been to keep our clients and partners informed about everything that is happening so that together we can make the best decisions. Besides, at this moment, nothing has changed as we are working normally since the program is not yet over and there are many investments processes underway.
Salman Siddiqui: But what are they asking you? What is your main question to you? Are they saying, Oh, I'm going to lose my residency, I wasted my money, or they're saying, Oh, I should just sell my property and just run away? What are the complaints you're hearing?
Diogo Capela: So there are several some of them are afraid of the 16 of March as being the deadline. I tend to be very clear on this and explain them when it's expected for the parliament to decide on all these measures. So the 16th of March is not the deadline, and I'm very clear on this to our clients. So they are sure about this, but these are the ones that normally are in the beginning of the process. They are still working on their investments, but there are other clients that we have that already have their applications submitted. They are afraid that those changes will affect them because they have no residence cards yet, so they are afraid that this may impact their applications. It's not the case, actually. They have submitted the application, so they need to wait until the process ends and so they will keep the right to have the residence cards, even if the government wants to finish the program or end the program. And later on, there are the ones that are they were trying to make an investment, but the type of investment that they were choosing implies very a very long time to perform. And so they are asking me some guidance on regards of other investments that they may take instead of those they were planning to do, because they want to act fast and get the application submitted as soon as possible.
Salman Siddiqui: Right. That's important to know, especially what the clients are going through. I'm sure it's not easy for a lot of them. And let's also talk about the impact of these measures on Portugal's investment immigration industry. You've been in that industry for a long time. What do you think will happen to the investment immigration industry? I mean, the industry had a nice run, but assuming this comes to an end and it seems it will come to an end, like you mentioned, the Prime Minister's party has the majority in the Parliament and it will eventually happen. Then what will happen to the industry?
Diogo Capela: I think it will have a significant impact in the industry in general because there are immigration companies exclusively dedicated to the Golden visa and to assisting these types of investors. They will have to adapt quickly. Otherwise they may have to close their doors or lay people off.
Salman Siddiqui: How is your company dealing with this huge change? Is your business model changing somehow?
Diogo Capela: Or now, as I was saying before, there's nothing that has changed yet. We are working normally and we don't feel that this would have a very big and significant impact on our firm. But that's because our business model is not exclusively related to the Golden Visa program itself, but we also perform services to other types of visas and other types of services like citizenship, law, real estate, corporate and tax. So we are not exclusively working for the Golden Visa program.
Salman Siddiqui: Right. But surely anxiety levels must have been running high in the entire industry, if not in your company?
Diogo Capela: Yes, that's right.
Salman Siddiqui: Hopefully there'll be other options. And speaking of options, a lot of lessons would also like to hear what visa options remain for investors and entrepreneurs in Portugal. Like will they, for example, still be able to acquire or start a new business in the country? What would you say to them?
Diogo Capela: Yes, of course. The end of the golden visa does not mean the end of immigration and foreign investment in Portugal. And this needs to be clear for everybody. There are several ways to obtain a residence card in Portugal besides the golden visas. The main difference will be that those forms imply the relocation to Portugal, while the Golden Visa does not work like that.
Salman Siddiqui: Right. And there is also the popular digital Nomad visa. Do you see any changes coming in that category as well?
Diogo Capela: That Visa is very recent and yes, it continues and in my perspective is not expected to change in the near future. The Government is quite keen to attract digital nomads and remote workers to our country nowadays, so we do not see any changes coming in the near future.
Salman Siddiqui: Speaking of changes, and this is something that your Prime Minister also mentioned, that set of proposals will come. What are we looking at? Really what changes more to expect apart from the end of the Golden visa, are any other categories or any other immigration laws maybe in the country are set to change?
Diogo Capela: It's quite curious that you are asking about this because right after the announcement of the end of the Golden Visa program, the government also announced some measures to try to facilitate other types of residence visa applications. And we are talking mainly about Portuguese language countries that are now all the process for obtaining a residence permit as being easier and the Government is keen to attract those kind of applicants. And so we expect some changes, but we think that the governments are intention is to put everything easier and faster for the other applications and for the other residence visas that it is in Portugal. And this is of course not the same for the Golden Visa, but for all others. We believe the government is trying to make them easier and faster.
Salman Siddiqui: That's really important information that the sun is not setting on all the categories and in fact, it might be rising for some other categories. So thank you for sharing that. And coming close to the end of our episode. Before I leave you, I want to understand from you, you mentioned this also earlier, the future. There might be some new kind of program. So let's talk about it. Do you think Portugal would relaunch the residency program for foreign investors in some other shape or form in the future or maybe offer a residency route to high net worth individuals with a new name or something?
Diogo Capela: We don't know yet the answer to that, but it is possible that in the future the government will create other mechanisms to attract foreign investment similar to the Golden Visa program, but without that name. So they will probably do some kind of a rebranding, let's say, and with a slightly different structure. We will need to see. I don't know.
Salman Siddiqui: What would you like to see in that reform program, for example, some improvement that was not there before and you would get to be there?
Diogo Capela: Yes, I can say that in my perspective, it's very important to try to attract foreign investment for some sectors that need actually this kind of funds coming for these investors. So what I would like to see actually was that some kind of a program or any other way to that the government tried to attract foreign investment to some activities in Portugal or some. Sectors that need to be rehabilitated, let's say, and they need to have more money to be more relevant to the Portuguese economy. And so we can try to attract these investment for the sectors that our country need more. Actually, that's what I expect to happen.
Salman Siddiqui: Okay, wonderful. I'll give you another 30 seconds if you like to have some last thoughts on what's happening in the country. And if you want to give a message to our listeners about if they don't want to fall into despair, what would you say to them?
Diogo Capela: I would suggest that they keep informed with trustworthy sources, like, for instance, you global for example, and professionals that are part of this community trying to seek the information from trustworthy sources is the most important thing right now, because there are also people trying to get advantage of all this instability. And we feel that it's important for people to be informed and do their move if they want to actually get the golden visa in this time, make that move with people that work in this area and they know what they are doing. That's the most important thing.
Salman Siddiqui: Thank you so much for your time, Diego. I really appreciate you enlightening us about the entire background of what's happening in Portugal. You gave us a very good background and gave us insights about exactly what the situation is. I truly appreciate that. Thank you. And also give a last shout out to our listeners that please stay tuned. We'll be covering more deltans in other EU member states about what's happening in the industry. And thank you. You've been listening to the Investment Immigration podcast by Youth Global Dot. Join us again soon for more in-depth conversations exploring investment, immigration opportunities from around the world.

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