By Joana Mendonça
Portugal's Golden Visa, renowned for offering residency through investment, has firmly established itself as one of the most sought-after programs of its kind since its launch in 2012. However, this popular program has undergone a substantial transformation, marked by the end of its most favored avenue, the real estate investment pathway.
Investors must wonder what alternative investment avenues are available as the landscape shifts. Will Portugal's residency-by-investment (RBI) option continue to captivate the attention of discerning investors?
Portugal will likely remain a top destination for RBI programs despite the popular real estate option ending.
Foreign investors have multiple investment options available still:
- Minimum of 500,000 euros in collective investment structures except real estate.
- Minimum of 500,000 euros in share capital.
- 250,000 euros (or 200,000 euros if in a low-density area) in artistic and/or scientific contributions.
- Minimum 500,000 euros in scientific research (400,000 euros if it’s in a low-density area).
THE ARTS INVESTMENT ROUTE CAN BENEFIT PORTUGAL’S GOLDEN VISA INVESTORS AND CULTURE
The Art route deserves special mention. These types of investments can significantly enhance the financial stability of this sector. This funding can renovate and maintain cultural institutions, develop new artistic initiatives, and support emerging artists. Also, many Art donation programs emphasize the preservation and promotion of a country's cultural heritage, which can often align with the ethos of an investor with a penchant for Arts and Culture.
Investors can support projects that restore historical landmarks, protect indigenous art forms, and conserve cultural traditions, which helps maintain a country's unique identity. An example of such eligible initiatives invaluable to Portugal is the Serralves Institute in Porto (one of the most important Art institutions worldwide).
However, very few Portugal golden visas have been granted in exchange for investment in cultural initiatives as of the time of closing this article. Why so?
Investing in the arts can be profitable. For example, film production investment fulfills the requirements and yields profits through box office or ticket sales. Also, even though this investment route was created in 2015, it was not available in practice before 2017. By then, the golden visa was already popular due to the real estate investment route, whereby foreign citizens bought houses in popular areas in exchange for residency there. Over the past ten years, real estate has been the investment choice of 92% of applicants, according to the Service for Foreigners and Frontiers (SEF in Portuguese).
While it may not sound too appealing, the Cultural golden visa offers a solution that can benefit the sector also and bring financial returns to the investor. Notably, the law does not state a minimum donation per se but a capital transfer to the arts. A whole world of art, film, concerts, theatre, and events is untapped and ripe for investment with mutual return. However, it would require eagerness from the sector to create eligible productions to support cultural initiatives with financial return.
So far, there are only three cultural institutions with eligible projects that are currently raising investment: the Serralves Foundation, the Fundação Batalha Aljubarrota, and an International Opera Competition by Fundação D. Luis I. The scarcity of eligible projects shows the untapped potential of this golden visa route and how much more could bring Portugal into the capital of cultural production while providing investors with a profitable avenue.
To apply for the visa, investors must make a minimum investment of 250,000 euros in an artistic production, restoration, or maintenance of cultural heritage. If the project is in an area of low population density, the minimum amount drops to 200,000 euros, according to Law 23/2007, making this, by far, the most affordable route to Portugal’s golden visa.
An eligible public entity must carry out these applications, and the project must be approved by the government body responsible for Culture as qualifying for the golden visa.
GIVING PORTUGAL’S GOLDEN VISA’S ARTS ROUTE THE IMPORTANCE IT DESERVES
The Cultural Golden Visa is, in principle, a contribution to support cultural initiatives in the country. Still, it will remain a minor route unless it offers a financial return on investment. This RBI route deserves to be recognized and supported, offering more creative avenues to make it popular in the coming years, and helping to support Portugal’s vibrant culture and history.
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