According to the recent State Budget (approved on March 31st), there is a legislative authorization concerning the Golden Visa process that allows the Government to review the regime of Residency By Investment permits (most commonly known as The Golden Visas) - meaning that there is a chance to change its scope for future requests.
The purpose and extent of the legislative authorization provided are to favour the promotion of investment in low-density regions, as well as investment in urban re-qualification, in cultural heritage, in activities of high environmental or social value, in productive investment and job creation. One of the expected results is that the Golden Visa will exclude eligible real estate investment located namely in Lisbon, Oporto as well as, potentially, in all other coastal municipalities (especially in the Algarve). However, and especially now when there is a big debate concerning measures to "boost" the Portuguese economy and address the possible COVID-19 impact, there are doubts on whether the Golden Visa changes will go ahead or not.
Concerning the exclusion of Lisbon and Porto from this permit, Kleya mentioned in last month's article (see article https://www.kleya.eu/portugal-feed/tax-legal/what-can-change-in-the-portuguese-golden-visa-program/) that in these cities the "Golden Visa" regime can and should continue. The solution is not to end the scheme in the big cities, but to seek and guide investment under the "Golden Visa" to the right areas. For example, the lack of student residences or accessible rentals for young people in these cities could be solved with investment raised through the "Golden Visa" scheme. Bringing investment to the Interior should not be done at the expense of prohibiting or limiting investment in large centres.
Independently of the controversy around the Golden Visa changes, the fact is that for now there is no legislative change that has an immediate effect. In fact, the Assistant Secretary of State stated that this restriction of the Golden Visa should only come into force in 2021.
This also means that any process initiated until the end of 2020, namely residence authorizations via investment on real estate in Lisbon or Porto, will not be impacted. Moreover, given the drastic impact of the Corona virus – COVID-19 – in Portugal and in the world, there is now a broader consensus that the Government should be putting these restriction measures of the Golden Visa on hold. Although this is not an official statement, it seems very likely that the Government may go in a different direction, as the Golden Visa Program and its inherent Investments, may be crucial to re-establish the Portuguese economy and capture foreign investment.
At Kleya, we continue to state the obvious: Portugal needs to attract capital. To move forward is to attract more capital for productive activities, that can represent an added value for the Portuguese economy.
For this, there is no need to restrict the real estate investment, but to create valid alternatives for foreign investors. How? Creating, for example, investment funds or venture capital for business development. These funds could even be entitled to a secondary market regulated by CMVM (Portuguese Securities regulator) and be an opportunity for local authorities themselves or state bodies such as Turismo de Portugal or Portugal Ventures to create investment opportunities.