Choosing the best investment for Portugal Golden Visa

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Choosing the best investment for Portugal Golden Visa
Reading time: 5 minutes
Published: 31st March 2021, 5:55pm
Updated: 1st April 2021, 7:48pm

The sea, the sun, the food, and the astonishing quality of life in Portugal have long been drawing ex-pat families into the country

But the real game-changer for families seeking to relocate was the Portugal Golden Visa residency-by-investment programme. The PT Golden Visa scheme enables qualified investors and their families to live, work, and study in Portugal, as well as visa waiver for the Schengen Area. 

The hook? None; all you have to do is invest in one of the Portugal Golden Visa investment opportunities, which include purchasing real estate, renovating a property, or investing in funds

Although the Golden Visa alternative is the investor’s top pick when it comes to acquiring a Golden Visa, the truth is that the number of owners picking up alternative investment options like venture capital has been seeing a significant rise over the last year.

By far, the most popular routes investors may take for residency are:

  • €280k for properties in low population density areas, i.e., interior territories or in the Autonomous Regions of the Azores and Madeira;
  • €350k to purchase properties located in urban areas which were constructed more than 30 years ago and in need of refurbishment;
  • €500k (and more) in all types of Real Estate investments available in Portugal;
  • €350k in investment funds across a range of sectors - technology, energy, start-up companies, projects, and other sectors.

From January 2022, major cities like Lisbon, Porto, the Algarve, Braga, amongst others, will no longer qualify or be eligible for Golden Visa investments. Learn more about the changes to the PT Golden Visa programme here.

Here’s everything you need to know about the investment fund to be granted a Portugal Golden Visa residency in one of Europe’s safest countries.

Portugal Golden Visa: €350,000 Investment Fund Option

This option is part of the venture capital investment alternative. Venture capital can be characterized as a pool of investment funds managed by corporate experts. For instance, if you want to invest in a start-up or a company with strong growth potential, the fund investment for the Golden Visa is a sustainable option.

Each fund is regulated and enables you to invest in sectors galore such as energy, industry, technology, or real estate. The funds are regulated by the CMVM (Portuguese Securities Market Commission), Portugal’s regulatory framework.

The investment fund alternative for the Portugal Golden Visa programme was introduced through an amendment in the Portuguese Law in 2017. The investment level lowered from €500k to €350k, which highly drew investors’ attention. In 2020, the investment fund option accounted for 4% of the Golden Visa investments -  an increase of almost six times compared to 2019.

Update: There will be an increase in the minimum investment for the fund from €350k to €500k. The change will come into effect in January 2022

Benefits of investing in the Investment Fund option

  • The Portugal yield fund investment for the Golden Visa is taken care of by qualified experts in the sector you wish to invest in;
  • You can obtain Portuguese residency for €350k;
  • You may enjoy tax exemptions;
  • Certain funds offer a minimum return hurdle rate;
  • Certain funds are backed by the Portuguese government through subsidies or financed by the IFD (Instituição Financeira de Desenvolvimento).

Who can invest in the fund option?

  • Anyone can invest except Portuguese citizens; EU/EFTA citizens may only  apply after making a befitting investment into the country;
  • Have a clean criminal record;
  • Proof of sufficient funds;
  • Proof of funds’ source.

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Can any investment fund qualify for a PT Golden Visa?

Not all investment funds in Portugal qualify for a Golden Visa. It’s advisable to consult with an expert in the field beforehand. 

What to consider when pursuing an investment fund for the PT Golden Visa?

When deciding on an investment fund for the Portugal Golden Visa, it’s crucial to weigh any associated risk. Hence, when investing you should take the following into account:

  • The fund manager’s credentials, leverage, liquidity and legal documents;
  • The investment mandate;
  • Some funds may have a lower financial return opportunity but a safer risk tolerance;
  • Investment funds enable an early exit, however the investor should normally expect to get all profits after a period of 5-10 years;
  • Sector exposure and a diverse portfolio will determine the risk-return profile of funds of this nature;
  • Unlike real estate investments, you are not the only decision-maker for the fund; you need to understand whether or not the fund has any period of potential expansion, and know how long the fund manager can extend its duration.

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Source: imidaily.com

 

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