Golden Visa 2022

There are still opportunities

You may have read about the Golden Visa program … an immigration program that provides EU residency while only requiring you to live in Portugal 7 days a year. You may have also read that as of 1 January 2022 some changes took effect. I’ll review them quickly, and then share some things you may not know.

Your golden ticket…

More than Just Real Estate

Nearly 90% of all Golden Visa applicants in Portugal chose to invest in real estate between 2012 and 2021. (About half of all the approximately 10,000 Golden Visa applicants came from China.) However, starting this year, one can no longer purchase property in certain “high density” areas. I’ll review the new “map” below, but let’s begin with the other non-property options:

• One can invest in a capital fund … regulated by the Portuguese Securities Market Commission, these funds must invest at least 60% of assets in Portuguese companies. Some funds focus on real estate, others the leisure industry, still others invest in small neighborhood grocery markets and fast food. Your 500,000€ investment however will be tied up for a minimum of 5 years. And the prospectuses I have reviewed suggest fairly modest returns. The good news…your dividend or capital gain income is not taxed under the NHR program.

• You can transfer funds (500,000€) to invest in a company that will employ at least 5 people or supports scientific research and development or the arts.

• Of course, if you need to find a place to park 1.5 million Euros, you can transfer this capital (or more) into a Portuguese financial institution (e.g. a bank).

Dirty money?

EU Concerns

You may have noted that my tongue was firmly planted in my cheek as I typed that last sentence. The point is that the “Golden” programs were not set up to monitor where the money is coming from. Was it illicitly acquired? Is it being laundered? You get my drift.

So while some Portuguese railed against the Golden Visa program believing it drove up housing prices in Lisbon, Porto, along the coast and the central Algarve … there is another concern. A concern expressed by the EU and anti-corruption/transparency advocacy groups. A concern that extends beyond Portugal to Cyprus, Malta, and Spain that also offer “Golden Visa” programs.

The recent revelations by the Organised Crime and Corruption Research Project (OCCRP) on the sale of a Cypriot golden passport to Jho Low, a corrupt Malaysian businessman accused of embezzling billions from the Malaysian sovereign wealth fund 1MDB, demonstrate the urgent need to regulate the golden visa industry. — Transparency International EU 

Mr. Low may be among the most colorful examples, but he is not the only case. As Mr. Low has a US connection, 1MDB worked with Goldman Sachs to offer the sale of bonds and he purchased several luxury homes in the States, permit me to offer a side note. Last year the US Justice Department charged him with conspiring with Elliott Broidy to engage in undisclosed lobbying campaigns, spending millions on a back-channel campaign to get the Trump administration to drop investigations into 1MDB and to have a Chinese dissident sent back to China. Oddly enough he also financed the film The Wolf of Wall Street. He is a fascinating chap and you can learn more about him here.

The map changed in 2022.

Still Real Estate Options

Of course, if you are looking to invest in a home under the Golden Visa…there are still options. The dark green areas (on the map to the right) require 500,000€ for a newer property(s) or 350,000€ investment for a “fixer-upper(s)” over 30 years old. (Note: you can purchase more than one property to satisfy the Golden Visa investment threshold. Perhaps you purchase one for 350,000€ to live in and another for 150,000€ to utilize as an income property.) In the lighter green area above you can purchase new/renovated property(s) for 400,000€ or properties (more than 30 years old) to renovate for 280,000€. And if you must have an ocean view there are still some options. You can invest on the southwestern coast … think Sagres or along the Fisherman’s Trail. And there are small pockets on the Eastern Algarve that are still eligible for investment that offer “distant” sea views (e.g. Castro Marim just north of VRSA, Santa Catarina da Fontes do Bispo in the municipality of Tavira, Alcoutim which is 26 miles north of Monte Gordo, etc.)

Of course, we wanted to live in Portugal. So we never even thought about the Golden Visa option. But if you are wondering what the costs and benefits of a D7 Visa are compared to a Golden Visa, follow this link for a good summary.