The Portuguese Golden Visa: a win-win program for both the country and investors

Uglobal Immigration Magazine, Volume 1, Issue 1

Article By Tiago Gali Macedo

Following the global financial crisisin its effort to improve economic diplomacy and to encourage foreign investment, Portugal launched its residency permit for investment program/golden visa residency program for non-E.U. and non-EEE citizens on Oct. 8, 2012By the end of March 2018, the country had issued 6,050 residency permits in exchange for investment and another 10,181 for family reunification, according to official information from the Portuguese Immigration and Borders Service. It raised a total 3.7 billion euro in foreign investmentespecially to local economies through investment in real estate. 

Portugal is a full member of the European Union (E.U.), boasts an excellent reputation, with a very high Human Development Index ranking. It is considered one of the most global and peaceful nations in the world, with a great quality of life. It is among the oldest countries in Europe with a rich history, a lively culture, stunning beaches and beautiful countryside.  

The entry of Portugal into the European Economic Community (EEC) in 1986 allowed Portugal to modernize itself, providing the country with the necessary mechanisms and funds to build important transportation infrastructurelike a network of highways, railways, airports and deeper sea ports.  

However, the greatest impact and achievements were on the education and health sectors. They allowed the country to develop and build new schools, universities, leading research centers and exceptional public hospitals. Portugal was given the necessary infrastructure, facilities and means for a strong public education system and reliable national health system, which consequently supported the intellectual development and boosted the quality of life for its population. 

BENEFITS OF PORTUGAL’S INVESTMENT PROGRAMS 

The successive Global Residence Index study considers the Portuguese golden visa residence program one of the best in the world, offering a low corporate and personal income tax regimes, a fast processing time for the golden visa application, secure compliance and low processing costs. It offers investors a path to a passport with visa free access for up to 177 countries. The Henley & Partners Passport Index for 2018 ranks the Portuguese passport as one of the most attractive in the world. 

Not counting the E.U. member states, Portugal has also signed several bilateral investment treaties with 78 countries, including China, the United States, Canada, Singapore, India, United Arab Emirates, Australia and Angola. It was recently considered by Bloomberg as one of the best countries and business ecosystems to start a business, create startups and invest in. 

The country makes the investment process easy. The most popular options are purchasing real estate with a minimum value of 500,000 euros or buying real estate worth at least 350,000 euros in an area at least 30 years old or within an urban regeneration area.  The processing time is between four and six months. These investments must be maintained for a minimum period of 5 years. 

Temporary Portuguese residency benefits include: visa-free travel within Europe’s Schengen Zone; residence visa waiver for entering in Portugal; the ability of living and working in Portugal on the condition that the applicant stays in the country for one week in the first year and two weeks in subsequent renewal periods; family reunification; the ability to apply for permanent residency after five years; and the ability to apply for Portuguese citizenship by naturalization after six years. 

The job creation, real estate and research activities investment options may be reduced by 20 percent, provided that they are made in sparsely populated areas or where the GDP per capita is below 75 percent of the national average. 

In other words, minimum 400,000 euros purchase of real estate and minimum 280,000 euros purchase of real estate that is at least 30 years old or located in urban regeneration area for refurbishing. 

THE FUNDS’ POSITIVE IMPACT ON THE COUNTRY 

The golden visa program brings fresh and sustainable investment to the country, allowing people and companies to create jobs, to build new infrastructures, to create new businesses, to develop new products, to renovate old properties and thus transforming the historic city centers, along with an increment of the tourist sector.  

Portugal was distinguished at the World Travel Awards 2017 with the World's Best Tourist Destination Award, boosting the national tourism for the seventh consecutive year 

In 2017, hotel establishments registered 20.6 million guests and 57.5 million overnight stays, corresponding to annual increases of 8.9 percent and 7.4 percent when compared to 2016, according to the National Statistics Institute of Portugal. 

In the same line of growth, in February 2018, hotel and similar establishments registered 1.2 million guests, which generated 2.9 million overnight stays, corresponding to an increase of 6.5 percent and 6.2 percent compared to February 2017, according to the National Statistics Institute of Portugal. These numbers are even more impressive if taking into consideration that Portugal has a population slightly over 10 million people.   

SPECIAL TAX REGIMES TO ATTRACT INVESTORS 

In relation to taxation, Portugal has a special tax regime to attract non-residents within high valued added professions, as well as beneficiaries of pensions received abroad. As a result, applicants for a Portuguese residency permit may benefit, under certain conditions and for a maximum of 10 years, from a flat tax rate of 20 percent on the income obtained in Portugal. 

Portugal is fast becoming a creative and tech startup hub, thriving and helped by accelerator funding, tech incubators and newly refurbished coworking spaces popping up all over the country, especially in Braga, Porto and Lisbon. In this sense, Portugal has recently created the D2 visa for entrepreneur immigrants. It is a special residence visa for foreign citizens who intend to carry out an investment activity in Portugal. The investment for D2 must be made through a company to be set up in Portugal and within the framework of a specific business plan, mainly from the perspective of economic, social, scientific, technological or cultural relevance of the investment. 

In conclusion, Portugal’s golden visa residence permit grants non-E.U. nationals the same treatment as Portuguese citizens, particularly with regard to social security, tax benefits, E.U. membership, recognition of diplomas, certificates and other professional titles. It also allows access to goods and services available to the public, as well as the application of provisions that grant those citizens special rights. With the resident permit, these non-E.U. foreign nationals are really citizens of Europe. 

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About the Author
Tiago Gali Macedo
Tiago Gali Macedo

<p>Tiago Gali Macedo is a Portugal immigration consultant. He is currently the managing partner of Gali Macedo & Associados, Sociedade de Advogados, SP, RL, a law firm based in Porto, Portugal and established in 2005. Gali Macedo & Associados has other offices in Lisbon, Angola and Belgium. It offers a variety of services, from public / administrative law to licensing, arbitration, corporate law and labor law. </p> <p>Macedo’s main practice areas are immigration law, national and international mergers and acquisitions, contracts, project management and labor law. </p> <p>Macedo also serves as vice president of Magellen, a European affairs consultancy based in Belgium. He has taught at Lusiada University in Lisbon, Porto Business School and the University of Baltimore. He is the author of several publications and a frequent speaker in Portugal and abroad. </p> <p>Macedo is pursuing a Ph.D. from the University of Salford. </p> <p>Macedo has been a member of the Portuguese Bar Association since 1994. He is also a member of the Belgian Bar Association. He has a law degree from Catholic University of Portugal.</p> <p>Macedo speaks Portuguese, English, French and Spanish.</p>