Is the Portugal Golden Visa scrapped?
Note to our investors and fence-sitters
On 2nd November 2022, various stakeholders of the Portugal Golden Visa market were in for a shock, on the back of a rather surprising statement made by the honorable Prime Minister of Portugal, Mr. Antonio Costa. Speaking at an event in Lisbon, the Prime Minister spoke about rethinking the various visa schemes offered by Portugal, including the popular Golden Visa regime.
“There are programmes that we are currently re-evaluating and one of them is that of Golden Visas, which, probably, has already fulfilled the function it had to fulfill and that at this moment it is no longer justifiable to maintain,” he said in the company of minister of the economy, António Costa Silva.
What does this mean for investors?
There is no doubt, that this statement would unsettle the thousands of investors who are already at various stages of the program. In some cases, the investors have invested all their life savings, for rehabilitating a 30-year-old plus Portuguese property or in investment funds that will eventually fuel growth of Portuguese SMEs. The investors approached these investments in search of a better lifestyle, improved mobility or greater respect of human rights in Portugal, compared to their homeland, often sacrificing financial returns from comparable investments.
The statement would also plant seeds of doubt in the minds of several investors who are currently exploring suitable investment to participate in the program. We spent the whole day on calls with ruffled investors!
Our take on this situation
All good things come to an end, and we think the ‘Portugal Golden Visa’ is no different. We do certainly expect, that one day, the lawmakers in Portugal would certainly close the door on the Golden Visa investors! However, 2nd November 2022, was not that day! For now, it remains a statement issued by the honorable Prime Minister of Portugal, which certainly deserves everyone’s due attention. But there is no change in law as it stands now. The immigration authorities of Portugal continue to accept golden visa applications and to process them.
For the Portugal Golden Visa to be scrapped, a law to that effect should be proposed and passed by the legislature. We have seen that the Golden Visa program has undergone changes in the past, the latest one being at the beginning of Jan 2022. The changes which came into effect in Jan 2022, were announced in the beginning of 2021, and the authorities gave stakeholders, almost a year’s notice to adapt.
Although there are no guarantees and the Portuguese lawmakers have the right to decide as they wish, at My Golden Pass, we believe that the Golden Visa program should not end abruptly. Rather, it will most likely be phased out in an orderly manner, with ever increasing barriers to entry, before a complete pull-out. Going by the experience of 2021, we expect to have at least 1 year’s notice for all stakeholders to adapt to any legislative changes of this magnitude. Once again, no law has been promulgated and not formal announcement has been made about scrapping the Golden Visas so far.
For investors who have already entered the process before the program is phased out, we think the Government would honor and protect their residency rights, including their right to renew and right to apply for citizenship as offered to them under the legislation under which they entered the process.
What should prospective investors do?
There are two ways to play this statement.
1. Make hay while the sun shines:
In 2021, Portugal witnessed a significant uptick in investments, especially towards the second half of the year, as investors jumped to get in ahead of the looming change of legislation. This was despite the raging covid wave.We certainly expect that some bullish investors, fence sitters waiting for an opportune time to identify the perfect investment, will now look to get in before the sun sets on the program.
2. Portugal’s loss is someone else’s gain:
Potential investors who hate uncertainty might be prompted to jump the ship and move to safer shores, which could lead to increased demand for the Spanish or the Greece Golden Visa programs. At My Golden Pass, we are of the opinion that although these programs offer European residency rights to their investors, in terms of the whole package, and especially the conclusion of the golden visa into citizenship, these programs are much less favorable compared to the Golden visa program of Portugal.
To conclude, My Golden Pass believes, if and when the Portugal Golden Visa program is scrapped by way of a formal legislation, it would only apply to future applicants. Those who have got in already, will still have a chance to complete their residency requirements and to apply for citizenship as envisaged under the program.
Note: Views expressed are personal and should not be construed as a legal advice in relation to the Golden visa program of Portugal. As always, please use your own judgement and consult your attorney before making an investment decision.