Golden Visa - Obtaining a residence permit by investing in PORTUGAL
PERMIT PROGRAMME The recent changes to the legal rules on entry and stay of foreign nationals in Portugal have introduced, among other changes, a mechanism that allows foreign nationals to obtain a Portuguese residence permit if they make certain investments in the country.
: With the introduction of this mechanism it is now possible for a temporary residence permit to be granted without the need to first obtain a residence visa if the foreign national, personally or through a company, makes an investment that leads to the creation of at least one of the following situations in Portugal:
(A) Transfer of capital in an amount equal to or greater than EUR 1 000 000;
(B) Creation of at least 10 jobs;
(C) The purchase of real estate property with a value equal to or above EUR 500 000 (five hundred thousand euros)*;
* The investment amount may be reduced in 20% (EUR 400 000 – four hundred thousand Euros) in case such investment is made in sparsely populated territories (NUT III level with less than 100 inhabitants per sq.km. or where the GDP per head is below 75% of the national average).
(D) The purchase of real estate property, with construction dating back more than 30 years or located in urban regeneration areas, for refurbishing, for a total value equal to or above EUR 350 000 (three hundred and fifty thousand euros)*;
* The value of this investment may be reduced in 20% (EUR 280 000 - two hundred and eighty thousand euros) provided it is made in sparsely populated areas (less than 100 inhabitants per sq.km., or where the GDP per head is below 75% of the national average).
(E) Capital transfer with a value equal to or above EUR 350 000 for investing in research activities conducted by public or private scientific research institutions involved in the national scientific or technologic system;
(F) Capital transfer with a value equal to or above EUR 250 000 for investing in artistic output or supporting the arts, for reconstruction or refurbishment of the national heritage, through the local and central authorities, public institutions, public corporate sector, public foundations, private foundations of public interest, networked local authorities, local corporate sector organizations, local associations and public cultural associations, pursuing activities of artistic output, and reconstruction or maintenance of the national heritage;
(G) Capital transfer with a value equal to or above EUR 500 000, for purchasing shares in investment funds or in venture capital geared to capitalize small and medium companies that, in turn, must present a feasible capitalization plan.
The investment chosen by the applicant for the residence permit must have been made at the time the application for the residence permit is presented and must be maintained for a minimum period of five years from the date the residence permit is granted.
: This type of investment may be carried out by the applicant as an independent entrepreneur or as proprietor of a single member limited company, as long as the company has its registered office in Portugal or in another European Union Member State but with a permanent establishment in Portugal.
: The temporary residence permit is valid for the period of one year from the date of issue and may be renewed for successive periods of two years as long as the conditions necessary for it to be granted remain in place. After that period Portuguese Citizenship may be requested.
For the residence permit to be granted under these terms, foreign nationals must regularize their stay in Portugal within 90 days of their first entry into the country (obtaining, in cases in which it is necessary, a short term visa – Schengen visa – issued by the Portuguese Consulate in the country of origin) and prove they have met the minimum quantitative requirements for the chosen investment activity.
For the purposes of renewal, applicants must demonstrate that they have stayed in Portugal for at least (i) 7 days (continuous or not) in the first year and (ii) 14 days (continuous or not) in each subsequent period of two years.
: The application for Family Reunification can be made simultaneously with the family member/investor ARI / Golden Visa; however it is always subject to the approval of the ARI/Golden Visa application.
The following are considered family members: (a) the spouse; (b) Minors or incapable children under guardianship of the couple or of one spouse; (c) Minors adopted by an unmarried applicant, by a married applicant or by the spouse, following decision taken by the relevant authority of the country of origin, provided that its legal framework comprises the same rights and duties of natural filiation and provided that such decision is acknowledged by Portugal; (d) Children who are of full age, unmarried and dependent of the couple or of one of the spouses, and study in an education establishment, regardless of the Country in which that establishment is located; (e) First-degree relatives in the direct ascending line of the resident or his/her spouse, provided that they are dependent on them; (f) Minor siblings provided they are under the tutelage of the resident, in accordance with a decision made by the relevant authority of the country of origin, and provided that such decision is recognized by Portugal.
Real estate investment:
The most accessible investment activity leading to obtaining a residence permit is a real estate investment made by acquiring property of a value equal to or greater than EUR 500 000 or acquiring property of a value to or greater than EUR 350 000, depending on the investment circumstances.
In this case, the applicant must prove full ownership of the property and that the property is free from any burdens of charges. This is done by presenting the respective up to date land registry certificate (or certificates).
It is also possible:
(i) to buy a part of the property as long as the candidate to the Golden Visa Programme invests equal to or greater than EUR 500 000 or invests equal to or greater than EUR 350 000, according to the investment;
(ii) If a down payment exists, reflected in a promissory contract of purchase and sale, equal to or greater than EUR 500 000, it is possible to apply the Golden Visa Programme.
(iii) There is no obligation for the candidate to the Golden Visa Programme to inhabit the property during the period of stay in Portugal. In fact the investment in the property can be done with renting purposes.
: when acquiring a property in Portugal, the investor must take into consideration the charges associated with such a transaction. These charges include Imposto Municipal sobre as Transmissões Onerosas (“IMT”), which is the municipal tax on transfer of real property for value, Imposto do Selo (“IS”), which is stamp duty and Imposto Municipal sobre Imóveis (“IMI”), which is the annual municipal property tax:
IMT is charged on transfers of rights in property for value and the applicable rate is 6.5% or, in the case of residential property there is a progressive rate, with a maximum limit the rate of 6%. The rate is calculated on the basis of the value that appears in the contract or other transfer document (or on the valor patrimonial tributário - the official valuation of the property for tax purposes, if greater);
IMI is payable by whoever owns the property on 31 December of the year for which the tax is due. The rate varies between 0.3% e 0.5% for urban buildings (according to the location of the property) and 0.8% for rural buildings. These rates are applied to the official valuation of the property for tax purposes;
The rate of IS (stamp duty) is 0.8% and is charged on the value that serves as the basis for assessment of IMT.
Furthermore, tax wise, Portugal offers extraordinarily comparative advantages, namely: No gift tax, no inheritance tax (between parents, sons, grandsons and husband and wife).