On February 16, 2023, Portugal’s Prime Minister Antonio Costa announced that Portugal would end its popular Golden Visa programme.
Introduced in 2012 to combat the financial crisis, the Golden Visa programme allowed non-EU citizens who made an investment in Portugal to stay permanently. And this appears to have worked: Since 2012, 12,000 people have moved to Portugal, contributing 6.8 billion euros to the Portuguese economy, of which about 90% was for real estate purchases.
According to the Portuguese government, the programme’s termination is a response to the limited availability of housing and rising property prices.
Due to the large number of short-term rentals, real estate costs are skyrocketing, displacing locals. Approximately 60% of the available real estate market consists of short-term rentals. Whether Golden Visa participants have contributed to this trend is debatable. However, ending the programme should ensure that locals have access to more affordable housing again.
According to many, however, the digital nomad visa has played a larger role in the real estate problem. Critics believe that repealing the Golden Visa programme without changing nomad visa requirements will provide little to no relief to the real estate market. Real estate prices rose 37% in Lisbon in 2022, despite investors with golden visas no longer being allowed to buy property in the capital as of January 1, 2022.
Other voices believe the end of the Golden Visa programme is also a response to pressure from the European Union, which has long urged Portugal to stop issuing these visas because they facilitate money laundering.
The good news for existing Golden Visa holders is that, according to the prime minister, existing Golden Visas are likely to be renewed. That is, provided the visa holder (or their dependents) either live in Portugal or rent their property on a long-term basis.
Immigration lawyers, however, believe that any changes to the renewal process would only apply to new applicants, as retroactive applications are not common in the country. There will be no further clarity until a formal proposal is presented to the Portuguese Assembly for a vote. And this will take at least a few more weeks, if not months.
At this time, it is unclear exactly when the measures will take effect and whether the programme will undergo changes or be discontinued altogether. As of today, the visa programme is still in effect. On March 16, the Council of Ministers is expected to meet to vote on the package of measures and present the final version.
Importantly, the government currently has no public plans to end the NHR programme.
However, this may be the last chance for investors to apply for the programme under the existing regulations. We therefore recommend that investors seek advice now.
What alternatives are there for investors in Portugal in the future?
D7 residence visa programme
Portugal will continue to offer the D7 residence visa programme. This allows foreigners who can provide proof of income to apply for a visa to live in Portugal for up to one year. Unlike the Golden Visa, no real estate investment or business activity in the country is required with this visa. However, applicants must live in Portugal for at least six months and prove that they work for an employer outside of Portugal. The D7 visa is thus a temporary visa that does not lead to permanent residency.
Highly Qualified Activity (HQA) visa programme
Another alternative is the Highly Qualified Activity (HQA) visa programme for startups. Foreign investors and entrepreneurs who want to start a business or invest in an existing business can do so through the HQA programme. Applicants must spend at least one week per year in Portugal to obtain a residency permit. To qualify for the HQA visa, applicants must invest €175,000 in a Portuguese startup that is in a three-year incubator programme, or start their own business and fund a public research project.
D6 residence visa programme
One other visa that remains valid in Portugal is the D6 visa. This visa is for retirees and self-employed people who want to live in Portugal. It is usually issued for one year, but can be extended if the applicant meets all the requirements. The advantage over the D7 visa is that it allows you to live in Portugal without a work permit. It also allows you to work in Portugal as long as it is work that does not compete with Portuguese labour.
What is the best alternative to Portugal’s Golden Visa programme?
Malta also offers a Golden Visa programme, which grants residence permits to foreign investors provided they invest in the real estate market or purchase government bonds.
To qualify for the Malta visa programme, which has been in place since 2015, an investment of €250,000 must be made in real estate in Malta, or a government bond worth at least €250,000 must be purchased and held for at least five years.
Some of the many benefits of the Malta Golden Visa programme include the ability to travel within the Schengen area without a visa and to live and work in Malta. Also, one can benefit from Malta’s tax advantages. In addition, Malta has double taxation agreements with many countries.
Malta’s authorities are almost 100% digitalised, so investors can usually obtain the Golden Visa within three months. Also, the minimum investment required to maintain the visa is less expensive in Malta (by comparison, the Portugal Golden Visa programme requires a minimum investment of €350,000 in real estate or €500,000 in other forms of investment).
Moreover, the Malta Golden Visa programme does not impose investment requirements for real estate acquisition or business activities. In Portugal, on the other hand, investment in real estate or business activities is mandatory under its Golden Visa programme.
