By Moustafa Daly
In its final draft of the ‘More Housing’ bill, meant to address the country’s housing crisis, the Portuguese government confirmed its intention to halt issuance of new golden visas in the country, which could soon bring Europe’s most popular golden visa program to an end after an 11-year run.
The announcement to end the golden visa was first made António Costa’s government on February 16, 2023, which initiated a one-month public discussion into the provisions and implications of the bill.
“Since 2012 up to now 11758 residence permits granted, based on the special regime for Golden Visa,” said the PM in a recent press conference.
“What these years of experience indicate to us is that nothing justifies a special regime for Golden Visa. Why? Because 89% of this investment was purely real estate investment. Only in 22 of these 11758 residence permits was there job creation,” he added.
Therefore, Costa announced that his government proposes that all golden visa applications made after February 16, 2023, would not be considered.
On the other hand, he backtracked on his government’s earlier intention to force current visa holders to rent their properties on the long-term housing market.
“In relation to the visas already granted and their renewal, what we have decided, in order to give security to all those who hold them, is that, their residence permit, at the moment of renewal, and if they meet the criteria that are currently foreseen for their renewal, will be converted into a normal residence permit, just like any other foreigner residing in our country,” he stated.
Portugal’s government to enforce law retroactively
One of the bill’s more contentious provisions is the government’s intention to end the golden visa holder status and converting it to normal residence permit status, which is held by any foreigner residing in the country - effectively deprive investors of golden visa privileges that, for one, didn’t entail much physical presence in Portugal.
Foreigners on regular residence permits, on the other hand, are obliged to stay for 183 days or more in Portugal per year, which may soon be applied to golden visa holders. Those who don’t meet this condition would be unable to apply and obtain permanent residences following the expiry of their temporary residence permits.
This proposition is seen by some in the legal community as unconstitutional for its perceived violation of the legal principle ‘non-retroactivity of the law’.
“It is expected that in the parliament, the discussion would lead to some amendments, namely in what regards the retroactive effect - which is understood by the majority of the law professors as unconstitutional,” as per a recent statement by Prime Legal, a Lisbon-based law firm.
Prime Legal sees the provision as a threat to Portugal’s reputation amongst global investments.
“The government intends to withdraw the title of residence from approximately 12,000 investors and 20,000 family members, that were granted these in return for their investment in Portugal, by now imposing on them an obligation of permanent residence that was not initially contemplated,” stated Prime Legal as it petitioned the country’s political institutions to reject this provision, among others.
“It is our understanding, as well as that of the legal sector that works in this area, that the proposed wording of the law, in the terms presented, suffers from illegality and unconstitutionality in view of the retroactive effect that contains and will not enter into force as it is,” further explains Prime Legal.
Raquel de Matos Esteves, founding partner at RME Legal, recently echoed the same concerns to Uglobal: “The measure, with a very harmful effect for the country, is to be regretted, and it is hoped that the contours of these measures can still be corrected, allowing Portugal to maintain the confidence of investors.”
Golden visa investors can still get approved if they meet D2 visa criteria
“In the case of golden visas requested and not yet granted, it is safeguarded that those who are pending at SEF or pending due to prior control procedures in the municipalities, shall be officially processed under the residence permit regime for entrepreneurial immigrants,” stated the government, referring to the country’s D2 visa which is granted to entrepreneurs and freelancers to reside in the country.
Amongst the criteria is that applicants need to provide a business plan with social, economic and cultural impact, and demonstrate ability to support themselves financially during their stay in Portugal.
To be eligible, an applicant needs to demonstrate that they have either established a company operating in Portugal or have the financial means to set up a company in the country.
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