Portuguese Golden Visa Update

The proposal to amend the Golden Visa program was voted on last Wednesday (July 19th) by the Portuguese Parliament. As previously known, since February 16, 2023, the government had announced changes to the foreign law through the “Mais Habitação” program.

We highlight below the main changes on the Golden Visa program:
1. The Golden Visa program will remain in effect with 5 different investment options;
2. There will be no retroactive effect (approved processes will not be affected);
3. Pending concession and renewal processes will be assessed according to the current regime;
4. Future renewals of residence permits based on revoked investment options will be considered under the Entrepreneur Permit regime, without the 183 days/year residency requirement, with a special regime of 7 days/year as the staying period;
5. Rights of renewal, family reunification, and permanent residency applications will be safeguarded;
6. No real estate investment options are eligible, either through direct or indirect investment;
7. There will be no transition period, so the changes will come into effect the day after their publication in the Official Journal.
8. Introduction of a new concept of low-density areas, with more restrictions to benefit from the 20% reduction in the minimum investment amount.
9. Introduction of a set of competent authorities to verify the suitability of the investment for the respective entrepreneurial project, including:
a) The Agency for Investment and Foreign Trade of Portugal, E. P. E.;
b) Banco Português de Fomento, S.A.;
c) IAPMEI – Agência para a Competitividade e Inovação, I. P.;
d) Agência Nacional de Inovação (ANI);
e) Gabinete de Estratégia, Planeamento e Avaliação Culturais (GEPAC);
f) Others that may be appropriate according to the matter.

Note:
These changes are related to the Foreigners Law, and the corresponding regulation will also need updating to comply with and clarify the new concepts, as well as to enable the correct application of the law.

What are the eligible investment options for Golden Visa based on these changes?
i. Creation of at least 10 jobs;
ii. Capital transfer in an amount equal to or greater than 500 thousand euros, applied in research activities conducted by public or private institutions of scientific research integrated into the national scientific and technological system;
iii. Capital transfer in an amount equal to or greater than 250 thousand euros, applied in investment or support to artistic production, recovery, or maintenance of the national cultural heritage, through central and peripheral direct administration services, public institutes, entities that integrate the public business sector, public foundations, private foundations with public utility status, intermunicipal entities, entities that are part of the local business sector, municipal associations, and public cultural associations that pursue objectives in the area of artistic production, recovery, or maintenance of the national cultural heritage;
iv. Capital transfer in an amount equal to or greater than 500 thousand euros, intended for the acquisition of shares in non-real estate collective investment entities, incorporated under Portuguese legislation, whose maturity, at the time of investment, is at least five years old, and at least 60% of the value of investments is materialized in commercial companies headquartered in Portugal;
v. Capital transfer in an amount equal to or greater than 500 thousand euros, intended for the incorporation of a commercial company with headquarters in Portugal, combined with the creation of five permanent jobs, or to reinforce the social capital of a commercial company headquartered in Portugal, already incorporated, with the creation of at least five permanent jobs or the maintenance of at least ten job positions, with a minimum of five permanent employees, for a minimum period of three years.

Important notes:
– The minimum amount or quantitative requirement of the investment activity provided for in paragraphs i), ii), and iii) may be lower by 20% when the activity is carried out in low-density territories.
– Investment activities cannot be used, directly or indirectly, for real estate investment.
– Low-density territories are considered those defined in terms of Ordinance No. 208/2017, July 13, with less than 100 inhabitants per km2 or a gross domestic product (GDP) per capita lower than 75% of the national average.
– Investment activities need to be evaluated every two years regarding their impacts on scientific, cultural, and foreign direct investment promotion, and job creation.

When do these changes come into effect?
With the final approval, the diploma will be sent to the President of the Republic, who may react as follows:
a) Direct ratification, in which case, the proposal will be published in the Official Gazette and will come into effect the day after publication.
b) The President does not accept the proposal as it is and returns it to the Parliament for amendments.
c) The President accepts the document but requests the evaluation of the Constitutional Court to confirm if any fundamental rights or principles are being jeopardized by the new legislation.
Note that the President has 20 days to decide on one of these options.

Sincerely,
LPA Legal
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DISCLAIMER: This publication has been prepared without taking account of the objectives, financial situation or needs of any particular client. Before entering into any transaction, clients should consider the suitability of the transaction to individual circumstances and objectives. Any decision should only be made by the client after a thorough analysis of his specific case. Nothing in this publication constitutes investment, legal, accounting or tax advice, or a representation that any strategy is suitable or appropriate for individual circumstances, or otherwise constitutes a personal recommendation for any specific client. Any references to a particular tax treatment depend on the individual circumstances of each client and may be subject to change in the future.

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