Setting New Benchmarks: 2024 Predicted To See Record-Breaking Golden Visa Fund Investments in Portugal

Portugal Golden Visa

The combination of low entry barriers, multiple investment options, and an easy path to European Union (EU) citizenship has made Portugal Golden Visa one of the world’s most popular residency by investment programs. Since its inception over a decade ago, the initiative has attracted over 12,700 primary applicants and generated billions of euros in direct inward investments.  

However, the year 2023 witnessed unprecedented dynamic shifts in the Portugal Golden Visa’s framework. These changes posed significant existential threats to the program, raising fears among high-net-worth individuals (HNWIs) seeking residency in Portugal 

But like the proverbial Phoenix emerging from the ashes, the Portuguese Golden Visa survived the 2023 scare. More exciting is that the program has been repackaged into a new framework, which experts predict might generate record-breaking investments in 2024. 

We’ve prepared a comprehensive guide to the new and revamped Portugal Golden Visa. But first, let’s start from the beginning by understanding how this program came about and the significant changes it has undergone in the recent past. 

Portugal Golden Visa

Introducing the Portugal Golden Visa

The Golden Visa is a scheme by the Portuguese government that provides wealthy non-European Union nationals with an opportunity to invest in Portugal in exchange for the right to live in the country. It’s the most popular residency program in Europe and one of the best in the world.  

The Portugal Golden Visa was launched in 2012. The pioneering scheme provided a reliable model for international residency permits, which were later adopted by other EU countries like Spain and Greece. It has since realized $7.3 billion euros (approximately USD 8 billion) in inward investment. And if recent projections are anything to go by, the Golden Visa is way behind its golden years.  

Many publications use the phrase ‘Portugal citizenship by investment’ to denote the Golden Visa initiative. That’s perfectly understandable, considering the program is Portugal’s only legally viable route to second citizenship.  

But unlike traditional citizenship by investment programs, the Golden Visa scheme doesn’t confer citizenship immediately. Successful applicants must wait a minimum of five years to apply for a Portuguese passport.  

Admittedly, the 5-year wait period may seem agonizingly long to some second citizenship applicants. However, it’s not a deal breaker when considering the Golden Visa’s numerous perks, as highlighted below. 

Exploring the Benefits of the Golden Visa 

1. Chance to Investment in a Lucrative Market 

Portugal boasts a thriving economy that provides lucrative opportunities for investment diversification. Among the country’s most profitable sectors include tourism, construction, real estate, agriculture & food production, and technology.  

According to official estimates, Portugal’s gross domestic product (GDP) stood at $381 billion in 2023. Additional projections indicate the country’s GDP might grow by 1.2% in 2024.  

2. Attractive Tax Incentives 

Golden Visa beneficiaries are entitled to certain tax benefits.  

However, you can only unlock such incentives by becoming a tax resident. That means you must spend at least 183 days annually in Portugal.  

If you choose to become a tax resident, you can enjoy the associated perks under the Non-Habitual Resident (NHR) tax regime, which include: 

  • National income tax at a flat rate of 20%  
  • Worldwide income tax at a flat rate of 20% after your first ten years of residence  
  • Exemption from foreign interest, dividends, inheritance, wealth, and property capital gains tax 

Note that the initial NHR regime that took effect in 2009 ended in late 2023. The new regime in place, called NHR 2.0, provides nearly similar benefits but uses a more stringent eligibility criteria. Establish that you qualify for the tax benefits before initiating any claims. 

3. Fast and Accessible Application Process 

Since its introduction, the Golden Visa program has been widely touted for its accessibility.  

As the only legitimate Portuguese citizenship by investment scheme, the Golden Visa grants residency rights to qualifying applicants in over 150 countries.  

China, the United States, and Brazil account for most of the participants.

4. Permissive Eligibility Criteria 

The Golden Visa stands out conspicuously from other citizenship by investment initiatives in its low entry barriers. 

Interested applicants are typically subjected to straightforward interviews with limited physical presence. 

5. Path to EU Citizenship 

The Golden Visa’s other significant selling point is its easy route to European Union citizenship. 

Qualified applicants to the Portugal citizenship by investment scheme can apply for permanent residency rights or full citizenship after five years without having to reside full-time in the country. You (and any co-applicants) only need to live in Portugal for seven days during the first year and fourteen days in the subsequent years.  

As Portugal is a European Union and Schengen member state, successful Portuguese citizenship by investment applicants can travel throughout the EU Schengen zone visa-free. Obtaining full citizenship further confers the legal right to live, work, or study in any European Union country. 

European Union Citizenship

Golden Visa and the 2023 Scare 

Initially, around 90% of all funds invested in the Golden Visa scheme went into the real estate industry. That explains why real estate has been one of Portugal’s most flourishing economic sectors in the last decade.  

However, the emphasis on real estate investment attracted widespread criticism from investment experts who thought the Golden Visa initiative was unduly driving up housing prices.    

Many critics notably observed that the average housing prices in Portugal were disproportionately higher than in its wealthier neighbors like Spain. Multiple reports further suggested that young Portuguese were especially affected by the country’s housing crisis 

Besides legitimate fears that Portugal’s housing shortage could spiral out of control, the European Union’s long-held critical stance on the Portuguese Golden Visa and similar programs also piqued the interest of policymakers. The EU posits that such visa schemes could pose untold security risks to the region since they do not obligate qualifying beneficiaries to live in their respective destination countries.  

Money laundering, tax evasion, and terrorism have been cited as the biggest threats to golden visa schemes 

In effect, the United Kingdom (UK) became the first country to respond to the EU’s concerns by discontinuing its golden visa program in February 2022. Ireland followed suit a few weeks later, scrapping its golden visa scheme known as The Immigration Investor Programme 

The Netherlands became the next EU country to cancel its golden visa initiative, citing money laundering and insecurity concerns. The country officially ended its golden visa program on 1st January 2024 after having announced its intentions in late 2023.  

More recently, Spain also voted to wind down its golden visa scheme. The decision came in the wake of a consensus reached by the Council of Ministers on 9 April 2024 to abolish the program.  

Portugal had also mulled the possibility of terminating its Golden Visa program. The government announced in February 2023 that it would wind down the scheme, following a growing backlash from locals who claimed the Golden Visa had exacerbated the housing situation in the country.  

However, after extensive consultations, Portugal decided it would no longer cancel its Golden Visa initiative. The government announced in June 2023 that it would instead scrap certain eligibility conditions, predominantly those targeting real estate.  

The much-anticipated changes to the Golden Visa program took effect in October 2023, which eliminated buying property as an obligatory pathway to qualifying for the scheme.  

The New and Revamped Golden Visa Scheme 

As stated, pursuing a real estate investment is no longer an obligatory condition to qualify for the Portuguese Golden Visa scheme. The current investment paths include:  

  • Donating €250,000 to a government-sanctioned arts program  
  • Investing €500,000 in venture capital or private equity fund  
  • Donating €500,000 to state-backed research activities  
  • Creating a company that offers direct employment to at least 10 locals, or setting up a company worth €500,000 that employees at least five locals  

Note that the above expenses are only applicable to the Golden Visa’s primary applicant. They’re also exclusive of any government and attorney fees.  

For instance, the government charges around €550 as initial Golden Visa processing fees and around €80 for every renewal. Collectively, initial applications cost around €5,325 while renewals will set you back €2,663.  

As for attorney fees, that would depend on your preferred law firm. Most attorneys will demand around €5,000 in legal fees. 

Obviously, you must also provide the relevant documentation, including proof of a clean criminal and debt record. 

Portugal Golden Visa Programme

Implications of the New Golden Visa Rules 

Recent changes to the Portuguese Golden Visa program aren’t a fundamental deterrence to aspiring real estate investors. Non-EU citizens who wish to buy property in the country can still do so by putting their money into state-backed investment funds.  

Experts further predict that the newly revamped Portugal passport by investment scheme will generate even more interest in the program.  

Prior to 2015, putting money in investment funds was only an option for Golden Visa applicants. However, in the wake of the recent changes, investment funds would now be the principal channel, alongside donating to state-backed arts or research projects.  

Below are the various ways the new Golden Visa program may attract more funding to Portugal in 2024; 

1. Diversified Investments 

Before October 2023, real estate was the most popular route to secure the Portugal Golden Visa. So, the decision to scrap this investment option may undeniably trigger an immediate slump in foreign real estate investment in the country.  

However, many pundits predict renewed interest in the Golden Visa scheme in the long run, citing the provision for multiple investment channels.  

Foreign investors who would have preferred the real estate route can now put their money into other potentially profitable state-backed investment schemes. One such option is the agriculture investment fund Pela Terra, an initiative that has helped regenerate around 1,000 hectares of farmland since its launch in 2012.  

Any astute foreign entrepreneur will find the idea of investing in an agricultural scheme more sustainable than the often volatile real estate industry. The fact that all capital committed to the Pela Terra project is physically backed by farmlands and other biological assets makes it a more attractive investment idea.  

2. Capitalizing On Golden Visa Discontinuation by Other Countries

The UK, Ireland, the Netherlands, and Spain are noteworthy EU countries that have since terminated their golden visa programs. These developments are likely to impact the Portuguese Golden Visa scheme positively in 2024.  

Spain’s decision will potentially have the most significant effects due to the country’s proximity to Portugal.  

According to Spain’s Ministry of Inclusion, Social Security and Migration, locally known as Ministerio de Inclusión, Seguridad Social y Migraciones, the Spain Golden Visa scheme had attracted 13,000 successful applicants as of 2021. It’s expected that a considerable percentage of these beneficiaries will shift their focus to nearby Portugal.   

3. Enabling Local Investment Environment 

As previously hinted, Portugal has been grappling with a housing crisis in the recent past. An article published in France 24 paints a grim scenario, suggesting that the homeownership rate among young Portuguese had plummeted by 50% in just over two generations.

Emphasis on real estate as an investment channel of choice for Golden Visa beneficiaries was largely to blame for Portugal’s housing crisis. This framework benefited foreign high-net-worth investors, much to the detriment of locals. 

The Golden Visa’s new structure will likely ease things by shifting the spotlight to other potential investment routes.  

It’s worth noting that the dire housing shortage in Portugal had already stirred considerable anxiety in most parts of the country. Without timely interventions, the situation could have escalated into all-out protests, scaring away foreign investors.  

Not only will Portugal Golden Visa beneficiaries be able to pick several investment routes. They can also set up businesses in the country with the peace of mind of knowing their investments are safe.   

Tapping Into Expert Assistance 

The revamped Portugal Golden Visa provides multiple ways to diversify your funds. If you’ve been mulling applying for the Golden Visa scheme, now is the time to take the plunge.  

However, the process of acquiring second citizenship can be painfully slow. Even with the requisite investment funds, there are several legal challenges to navigate. 

That underscores the significance of engaging seasoned professionals who understand the lay of the land.  

At Abode Options, we’re committed to helping our clients navigate the common pitfalls associated with securing second citizenship.  

It doesn’t matter whether you’re seeking residency permits through Portugal’s Golden Visa or full citizenship through similar programs like the Dominican Citizenship by Investment. You can trust us to provide the much-required assistance. 

Portugal’s Golden Visa Scheme

The Bottom Line 

The new Portugal Golden Visa framework might have shifted focus from real estate investment, but it remains one of the most viable means to obtain EU second citizenship. With experts predicting a boom in Golden Visa funding, the program remains a strategic choice for HNWI investors in 2024. 

Ultimately, if you wish to learn more about how Abode Options can assist your candidature, click here.