Portugal’s ‘golden visa’ scheme has seen a substantial increase in applications as the program might soon end. In February of this year, the government put forward a proposal called ‘More Housing‘, which included the abolition of the visa program. The ‘golden visa’ had received a lot of criticism from the European Commission on the basis that it could be a vessel to facilitate money laundering.
According to Reuters, the measure to remove the visa program is still under public consultation. The news agency also reported that companies helping individuals with the paper work needed to get a second residency or citizenship via investment had seen a 50% increase in applications in light of the possible disappearance of the visa program.
On February 16th, the Portuguese government presented the ‘More Housing’ package of measures. “It is a measure to combat real estate speculation,” said Prime Minister António Costa. This fight against speculation is one of the five axes on which is based a package of rules that seek to “respond comprehensively to all the dimensions of the housing problem,” Costa pointed out.
Costa informed that the renewal of the ‘golden visas’ already granted will only be carried out if the real estate investments were destined to the holders’ own and permanent housing or to the one used by their descendants. Additionally, if the property is intended to be rented on a long-term basis, the visa may also be renewed.
In 2012, Portugal approved the “golden visa”, a residence authorization for non-EU foreigners granted in exchange for investments made through the purchase of real estate or the transfer of capital. Since then, the most used form has been the purchase of real estate: in 2022, more than 91% of the 11,535 residence authorizations for foreigners were provided under the criterion of real estate acquisition, whose equivalent investment was €6.041 billion.
The minimum outlay to obtain the “golden visa” through the purchase of real estate was not for everyone: a minimum payment of 500,000 euros had to be made. This meant that this visa, designed to attract investment, contributed to the rise in housing prices.
In recent years, the EU has made strong statements against residence and citizenship-by-investment programs. Those programs are currently offered in some form by 10 member states, with Cyprus and Malta already scrapping their golden passport initiatives after coming under scrutiny from the bloc, Bloomberg news reports. In the case of Portugal, applicants must have a face-to-face interview, which in the case of China has proved to be a stumbling block due to the country’s strict Covid travel restrictions.
The effect of China’s travel restrictions on Portugal has been twofold: wealthy Chinese people have to find other options in terms of potential relocation, while real estate brokers in Portugal have seen this form of reliable foreign investment getting smaller and smaller. According to data from Portugal’s Immigration and Borders Service and Investment Migration Insider just 16% of successful applicants are Chinese so far this year. On the other hand, it has drawn more attention from US investors as the country’s policies are increasingly presenting China as a competitor.