The Portuguese Golden Visa Survival Manual
The basics of the Portuguese Golden Visa
1. Advantages & Requirements
The rules governing the granting of Residence Permit for Investment (Portuguese Golden Visa) enable third country nationals to obtain a temporary residence permit to live, work and study in Portugal. The application is done at SEF.
The beneficiaries of the Portuguese Golden Visa residence permit are entitled to:
Residence visa waiver for entering Portugal.
Living and working in Portugal, on the condition that the investor and family members stay in Portugal for a period of at least 14 days after the Golden Visa was issued and within its validity.
Visa exemption for traveling within the Schengen Area.
Family reunification.
Applying for a specific golden visa investor permanent residency.
Applying for Portuguese citizenship after 5 years of legal residence.
Eligibility — Who may apply?
All third country citizens who conduct an investment activity, as an individual businessperson or through a company set up in Portugal and who fulfill the quantitative and qualitative requirements. They may apply for the Portuguese Golden Visa by one of the following routes:
a) Capital transfer with a value equal to or above 1 million Euros.
b) The creation of, at least, 10 job positions.
c) The purchase of real estate property with a value equal to or above 500 thousand Euros.
Portuguese, EU and EEE nationals are not eligible for the ARI / Golden Visa scheme.
The Portuguese Golden Visa Investment Funds
There are a number of benefits to investing in private equity funds which are eligible for the Portuguese Golden Visa.
The Portuguese Golden Visa Investment Fund is professionally managed by experts of each specific sector.
You may obtain the Portuguese Golden Visa by investing a minimum of 350 thousand Euros into a officially registered investment fund.
The Portuguese Golden Visa Investment Funds are a tax-efficient vehicle — dividends and capital gains returned to investors may be tax-exempt.
Depending on the Golden Visa Investment Fund, they will offer a minimum return hurdle-rate usually between 1% and 6%, were some managers are only compensated in case the funds performance is above a certain percentage.
Some Investment funds have the support of the Portuguese Government through subsidies or financed by the IFD.
The Portuguese Golden Visa Investment Funds are regulated and must comply with the rules stipulated by the Portuguese Securities Market Commission (CMVM), which means that fund managers are regularly audited by third parties.
To comply with the Portuguese Golden Visa legal requirements the Golden Visa Investment Fund usually has a maturity of investment for at least 6 years and should invest at least 60% into companies which have their head office in Portugal.
The advantage to choose investing into a golden visa elegible Investment Fund is that compared to real estate you will not pay acquisition tax (around 6%) neither stump duty tax (0,8%) based on the value of the real estate property.
By deciding to apply for the Portuguese Golden Visa through the investment fund option you will save time and money.
Necessary documents for the Golden Visa application:
The Applicant must present supporting evidence in which he has made the investment of the minimum amount required, individually or through a shareholder limited liability company of which the Applicant is the shareholder.
• Declaration from your portuguese bank attesting the effective transfer of the amount equal to or above the legally required.
• Supporting document attesting the ownership of the Participation units (shares) on your portuguese bank account.
• Declaration issued by the Investment Fund managers attesting the feasibility of the capitalization plan, the maturity of, at least, five years, and the application of at least 60% of the investment in commercial companies with head office in national territory.
STEPS:
1. The Management company will receive from the investor the KYC (Know Your Client) Form, subscription form and personal documents.
2. The Golden Visa investor will obtain his Portuguese tax identification number (NIF) as a non-resident and can then open a Portuguese bank account (checking and securities account).
3. The investor will transfer the money from his foreign account to his Portuguese bank account.
4. The investor orders the bank transfer to the bank account of the Fund chosen by the investor.
5. The Management company issues a declaration necessary for the Golden Visa application and the Portuguese bank issues two declarations (money transfer overseas and certificate of holding the Participation units (shares).
Note: “US Persons” (investors with American citizenship or being tax residents in the US) need to open their Portuguese bank account with a FATCA compliant bank account as for example:
The Portuguese Golden Visa Real Estate Investments
For your real estate investment to be eligible for the Portuguese Golden Visa, you may buy a property which is worth more than 500.000€ or a property for the amount of 350.000€ if it is older than 30 years or located in a rehabilitation area in Portugal. The required amounts do not include the taxes to be paid.
STEPS:
1. Get your budget straight: First of all, you have to work out how much you can reasonably spend on purchasing your new Portuguese property.
2. Type of property and location: Decide what type of property you want and where, whether that’s a new construction or a used home, free or protected, by the sea or in a town centre. Choose the one that is best suited to your needs and personal situation.
3. Visit the property, chat with the neighbours and find out everything you can. When you go to visit your potential new house, be sure to take notes about everything, taking photos of anything and everything. Take measurements and consider the room layout, which direction the property faces, how much light comes in, the ventilation in the bathroom and kitchen, the state of the wiring and how energy efficient it is, how noisy it is and the amenities available in the neighbourhood.
4. Make and offer.
5. Sign the promissory note (contrato de promessa de compra e venda). This is the first contract to sign and it acts a sort of preliminary safeguard for the buyer’s and seller’s rights. It means paying a 10% deposit on the house, and with this you take on all the rights and responsibilities of a buyer. If you as the buyer later decide not to go through with the transaction, you will lose this down payment. If the seller is the one who cancels the sale, though, they will have to return the deposit to you.
6. Pay the transaction costs and taxes. The main expenses when buying a home in Portugal are the IMT Property Transfer tax between 4 up to 8% and Stamp Duty with a tax rate of 0,8%, not to mention the notary costs, the payment to register the transaction with the Property Register.
7. Sign the public deed. The signing of the deed must be done in front of a notary with both the buyer and seller present. Ensure that the deed contains a description of the property along with any outstanding mortgages or charges on the house, the sale price and the payment method, and all taxes and expenses related to the sale. You should also take this opportunity to check that all the documents are present and correct, like the Energy Performance Certificate, insurance if applicable, and invoices for the latest tax and community cost payments.
8. Change the name on the energy, water and gas bills. Inform the energy companies and any other service providers that you are the new owner and will be paying the bills from now on.
9. Keep all the documents. Put them somewhere safe. You’ll need them again one day when you come to sell or rent the house.
10. Get the keys and start moving in to your brand new home.
If you were not able to find right property in Portugal yet, please have a look at the service provided by ABC HOMES.
2. Steps & Timelines
- Obtain the Portuguese tax identification Numbers (NIF)
- Open a Portuguese bank account
- Complete the eligible investment (complete investment in a Fund, purchase real property, incorporate a company etc.)
- Collect and certify the documentation necessary for the application
- Apply for the Golden Visa through the government portal
- Book the interview at the Foreigners and Borders Service
- Attend the interview in person to submit original documentation and have the biometric data collected.
Depending on the public services timelines and SEF availability, the whole process may take 10 month and the residence permit will be valid for 2 years and must be renewed at the 2nd and 4th years. On the 5th year each holder of the residence permit will be eligible to apply for a permanent residency and/or the Portuguese citizenship.
For more information: Golden Visa Portugal.
