The golden visa program is officially ending, which offered non-EU citizens a residency permit in exchange for an investment in the country, announced by Portugal. This move comes in response to the limited availability of housing. However the European Union had long urged Portugal to end the visa program due to concerns of money laundering. In this blog post, we will explore the implications of the decision and what it means for non-EU citizens.
What is the golden visa?
With a 10-year residency by investment program, the Golden visa program gives individuals the freedom to live and study in Portugal. This is for a total of ten years and this also allows them to cross into other European countries. Giving them the option to eventually apply for citizenship.
There are three ways you can qualify for a Golden Visa; capital transfer, property acquisition, and business investments. The Portuguese government will terminate it’s golden visa program by 16 March 2023. The program was terminated to please the European Union.
“The golden visa should never have been introduced,” said Ana Gomes, a former member of the European Parliament from the Socialist Party who has opposed it for years. “As a result, they did not only encourage money laundering, but they allowed criminal and terrorist organisations to illegally enter the Schengen area.”
Why is Portugal ending the program?
Portugal has a reputation for being an investment-friendly country. It is primarily advertised as a program to help Portugal’s economy that is at such low levels a decade ago. The golden visa program proved to be an income source for the property sector. With rich foreigners merely purchasing luxury apartments in Lisbon and surrounding areas, instead of creating companies and jobs. Nearly all of these investors were from China, followed by Brazilians, Turks, South Africans, and Russians.
The project provided €7 billion in income, 90% of which came from the purchase of properties. According to statistics from the Portuguese Immigration and Border Service, 22 visas were issued for job creation, with only 280 new jobs in over 10 years.
What have critics said about the program?
Especially in Lisbon and Porto, the price of real estate in Portugal has skyrocketed in recent years. In addition to the golden visa program, critics contend that more and more EU citizens are buying houses and apartments in Portugal at prices Portuguese people cannot afford.
“Golden visas have caused substantial price increases, particularly at the top end of the market,” Gomes said. And this is the argument the government is now using to justify shutting down the program. According to Gomes, the official line was just a pretext, and European Union criticism was ultimately responsible for the program’s imminent demise.
Hugo Santos Ferreira president of the Portuguese Association of Real Estate Developers and Investors has called the proposal against golden residence permits “an attack on all foreign investors who wish to invest their money in Portugal.” There is a risk that Portugal will lose its credibility and reputation as an investment-friendly nation.”
There was criticism primarily based on the questionable origins of visa applicants. Since the start of the war in Ukraine, Russians have been banned from investing in Portugal. Gomes noted, however, that countries such as China and Vietnam, where wealthy citizens can get golden visas, aren’t exactly models of transparency.
Even though there are bad actors everywhere, Santos Ferreira believes that the golden visa program shouldn’t be abolished. even though money can also be laundered in banks, no one is talking about closing them, he said. However, it looks as if Portugal’s €500,000 Schengen entrance card has passed it’s expiration date.
What happens now?
It remains to be seen what will happen to holders of existing golden visas. According to some reports, their residence permits will only be renewed if they are actually living permanently in Portugal.
RHJ can help you
This news may make some feel a little unsettled and anxious. But don’t worry – the RHJ team will keep you up to date! With relevant information and can help you plan your next steps for staying in Portugal.
Get in touch with us today so we can discuss your next steps together!