Portugal launches new investment fund path to golden visa

As real estate demand in Portugal outstrips supply, the government has introduced a new investment route to its golden visa programme

April 5, 2018
Transcript

For high net worth individuals, a golden visa is a gateway to freedom. It’s not about relocating – but about creating future opportunities for their families. They may want an improved quality of life, access to better education, or a safe haven from political instability. Since 2012, Portugal has been offering just this portal to independence. Tiago Camara and David Machado from explain how the programme works, and how the new investment fund route makes it simpler than ever to acquire a golden visa.

Tiago Camara: The Portuguese Golden Visa programme allows investors to freely live, work, and study in the whole Schenghen area; and after six years they can even apply for a Portuguese passport.

It’s a straightforward programme with no grey areas; if one invests a minimum of €350,000 in a Portuguese investment fund or in a real estate product, they will get their residence permit card in Portugal.

Investors can also add family members to their applications as dependents, and there’s no need for relocation. Just a minimum stay of seven days – they are already complying with the rules of the programme.

One of the main routes for applicants has been investing in real estate. Investors can expect return on their investments, in the main cities, of around 10-12 percent every year. Tourism is increasing 50 percent on the last three years, allowing investors to place their properties on the short rental market, renting these properties to tourists, and generating per year around five to 10 percent rental income.

The launch of programmes like Golden Visa and Non-Habitual residents generated a huge demand for real estate products in our country. The Portuguese are also investing in real estate instead of having their money in the banks. At the moment, supply cannot keep up with demand, which provides a great capital appreciation on properties.

World Finance: With demand outstripping supply, there’s an urgent need for more real estate products in Portugal. To address this, the Portuguese government created the new investment fund path to the golden visa this year.

David Machado: From 2018, you are able to invest €350,000 in a Golden Visa qualified investment fund, which is fully regulated by the Portuguese Stock Exchange Market, and audited by third party companies. This option comes free of taxes and is focused on the bottom line investment, creating a very fast and interesting solution with high returns.

PTGoldenVisa is working on a basis of a close collaboration to implement the first fund in Portugal qualified for Golden Visa. It’s sustained in two major criteria, which we fully share 100 percent of the strategy vision: first, invest in real estate easy to resell; and second, invest in real estate easy to rent out. This investment fund is managed with a safe approach to market, without leverage.

The goal here is to invest in real estate opportunities already identified; such as developing private villas with swimming pools close to tourism spots, refurbish buildings in the major city centre avenues, or convert hotels into tourism apartments to be able to be sold on a piece-by-piece basis.

The term of the investment is planned for seven years, custom designed to optimise the Golden Visa requirements, and is expected to generate over six percent return per year. This uses a very conservative approach, considering that the market has been growing double digits per year.

As an exit strategy, it’s an investor right, granted by the regulator, to exit the fund any time you want. Additionally you can always resell the fund units to other investors, or simply convert the units into real estate assets supported by the fund.

Tiago Camara: PT Golden Visa offers a long-term relationship solution which fulfils all the needs of our clients during the investment period. We will continue to enlarge the scope of our integrated services, since that’s what differentiates our company from most of the service providers, and makes it special.

Golden Visa residence permit programme has a huge impact on the Portuguese economy. This is the reason why all political parties and the government are constantly supporting this programme. So far, €3.5bn were injected in Portugal through the Golden Visa programme; and 95 percent of this amount was investment in real estate.

Forty percent of all real estate transactions last year were made by foreign investors. The majority of them with the objective of getting the residence permit card.

The Golden Visa residence permit is our golden egg, and our politicians know it. We are very confident that the programme will keep on being supported by our government; and we are here to support all investors.

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