In response to the recent and significant changes to the Residence Permit for Investment (ARI) regime, popularly known as the Golden Visa, in Portugal, FiO Legal is committed to clarifying investors' most frequent questions. The 2023 changes, resulting from an extensive social and political debate about the program's effects over the last 10 years, have introduced new challenges and opportunities. Let's explore together the nuances of the 2023 legislative changes, understand their impact on various types of investments, and discuss how we can assist you in your journey to ensure that, despite the changes, your goals are successfully met.
What Are the New Rules for Real Estate Investments?
With the latest changes, direct or indirect investments in real estate are no longer eligible for the Golden Visa.
Thus, the options for acquiring real estate with or without rehabilitation, for the respective values of €350,000 or €500,000, no longer qualify for the Golden Visa. Investment in funds where the capitalization of companies whose primary or accessory objective is to invest in the real estate sector will also not be eligible
In conclusion, the Golden Visa regime remains in effect, but it will no longer be possible to apply through real estate investment.
How Do the Changes Affect other types of Investments?
In addition to real estate investments, the transfer of capital amounting to €1.500.000 is also no longer eligible. However, the investment in funds remains eligible for the Golden Visa, provided it is not a fund that operates, directly or indirectly, in the real estate sector.
Venture Capital Funds (FCR), among others, may continue to be eligible, although scrutiny and analysis of the sector in which the capitalized companies operate is recommended.
The minimum investment amount in funds remains at €500,000 for five years, with 60% of the fund's investment value to be applied to commercial companies headquartered in Portuguese territory.
What Is the Impact on Ongoing Applications and Golden Visa Renewals?
The approved legislation safeguards applications submitted before the changes took effect (October 7, 2023) and subsequent renewals. The minimum stay period required for the Golden Visa, 7 days in the first year and 14 days in the following two-year periods, remains applicable.
However, it is anticipated that these residence permits will convert into residence permits for immigrant entrepreneurs, without prejudice to the above-described rules.
Therefore, this change seems to primarily affect the name of the residence permit, more than its legal rules or renewal conditions. However, more details on how this transformation will be applied are awaited, especially if new rules are introduced to more thoroughly assess investments.
In this context, it is important to note that any restriction imposed on residence permits, granted or requested under the previous regime, could be taken to court to discuss the possible retroactive application of the law, a situation limited by the constitution.
Were There Any Changes to the Stay Requirements?
There were no changes to the stay requirements. The minimum stay periods for investment residence permits remain at 7 days, either consecutive or interpolated, during the first year, and 14 days, consecutive or interpolated, in subsequent two-year periods.
How Do the Changes Affect Eligibility for Citizenship?
The regime for acquiring Portuguese citizenship through residence time (also known as naturalization by residence) remains unchanged.
Therefore, provided other general requirements are met, all citizens who are legal residents (holders of residence permits) in Portugal for at least 5 years may apply for Portuguese nationality.
A proposal to change the Portuguese Nationality Law is currently in advanced stages of processing. This proposal suggests that the waiting period between the application and the granting of the residence permit should be counted for the purpose of calculating the time required for citizenship acquisition.
Are There Any New Eligible Investment Opportunities?
With the current legislative changes in place, no new eligible investment options have been approved for the Golden Visa program.
The eligible modalities for granting new investment residence permits (Golden Visa) submitted after October 6, 2023, are as follows:
• Creation of at least 10 jobs;
• Investment of at least €500,000 in certified research projects;
• Donation of at least €250,000 to certified cultural projects;
• Investment of at least €500,000 in investment funds (see the answer to question 2 above);
• Investment of at least €500,000 for the establishment or capitalization of a commercial company based in Portuguese territory, with the creation of 5 permanent jobs or the maintenance (in the case of an already established company) of 10 jobs, of which 5 must be permanent.
What Are the Tax Impacts of Investments?
The tax impact of investments will depend on the type of income generated by the investor and whether the investor chooses to change their tax residence to Portugal.
It is recommended to seek advice from a lawyer and/or tax consultant to assess this situation, as income is usually subject to withholding taxes, depending on the type of investment and the investor's personal circumstances.
Changes in Application Procedures and Timelines
Legislative changes have not altered the procedure and timelines. However, with the recent dissolution of the Immigration and Border Service (SEF), applications must now be submitted and processed by the Agency for Integration, Migration, and Asylum (AIMA), with no significant practical or procedural effects so far.
It is important to note, however, that although the legislation provides for a 90-day deadline for the granting of investment residence permits, investors should expect to wait for at least one year after submitting the application to receive their residence permit.
Effects on Family Applications
Investors who have opted for one of the recently revoked modalities can still, even after the entry into force of the legislative changes, apply for the granting of a residence permit for an eligible family member, as long as the investor's application (the main applicant) was submitted before 07/10/2023 (the date of entry into force of the legislative changes).
Eligible family members for the family reunification residence permit application are as follows:
a) The spouse;
b) Minor or incapacitated children under the care of the couple or one of the spouses;
c) Minors adopted by the applicant or the spouse;
d) Adult children under the care of the couple or one of the spouses who are unmarried and studying;
e) Parents of the resident or their spouse, provided they are under their care;
f) Minor siblings under the guardianship of the resident.
FiO Legal is here to be more than your legal consultancy; we are your strategic partner, committed to excellence and your success in Portugal. We hope this information has been useful and enlightening. If you have any additional questions or need specific clarifications, please do not hesitate to contact us. Your investment journey in Portugal is important, and we are here to offer personalized legal support and guidance.
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