With the definitive end to the Golden Visa approved yesterday by the President of the Republic, it’s time to move towards a more stable investment framework and diversify the forms of investment in Portugal.
There is no doubt that Portugal continues to be a very attractive destination for investors who now find their investment options more limited, but still have plenty to choose from.
If the initial objective is indeed the Golden Visa, they can continue to apply according to the conditions we have already detailed in this article – namely the creation of 10 new jobs (or maintenance of 5) and investment in scientific research or Portuguese cultural heritage.
As direct, or indirect real estate investment is out of the equation, there are other benefitable investment options that are increasingly interesting for international investors – investment funds.
Investment Funds – what are they?
What are investment funds anyway? For those new to the area, this expression may “scare” you, but the idea (and the explanation) is simpler than it seems – it’s about investing together.
Due to the amounts of investment required and the greater complexity of some areas of investment, it presupposes that there is a professional manager, i.e. a specialist – a fund manager – looking after your money. You can also invest on your own, but this is not advisable, especially if you have no experience.
Participation in the fund is proportional, i.e. each person who invests in the fund receives a proportional share of the profits or losses, based on how much they have invested. If you have a manager, you will also have to pay them a fee for their services.
Usually, funds are flexible, meaning you can buy or sell your stake in the fund at any time and thus guarantee liquidity. It’s a convenient and affordable option for individual investors.
Investment Funds in Portugal
There are several investment options in Portugal that offer profitability and opportunities for foreign investors:
Renewable Energy Investment Funds
Portugal has invested significantly in renewable energies, such as solar and wind. Investing in funds related to clean energy can be an interesting option as the country seeks to increase its renewable energy production.
Tourism Investment Funds
Tourism is a vital industry in Portugal, and investment funds focused on this sector can be attractive to investors.
Some of these units are strongly related to the maintenance of Portugal’s cultural heritage, which could still be a route to the Golden Visa. It’s also an area that usually creates a lot of jobs.
Capital Market Investment Funds
Capital markets are essential components of a country’s financial system and play a key role in allocating financial resources. They are where companies and governments can raise money by selling shares, bonds, and other financial instruments to investors. In Portugal, there are several capital markets, including Euronext Lisbon – and the Stock Market for companies within Euronext -, the Alternext market, and the Debt Market.
Agricultural Investment Funds
Investment funds in the agricultural sector are investment vehicles that focus on activities related to agriculture, agro-industry, and agrobusiness. These funds invest in projects, companies, or assets linked to the agricultural sector, with the aim of generating a financial return for investors. They can include various areas such as food cultivation, production of agricultural commodities, food processing, agricultural logistics, and much more.
In Portugal, some investment funds are related to the agricultural sector:
- Agricultural Venture Capital Funds: investment in start-ups and innovative companies in the agricultural sector, such as those involved in agricultural technology (AgTech) or sustainable solutions for agriculture.
- Agricultural cooperatives: Although they are not traditional investment funds, agricultural cooperatives in Portugal can be a way of participating in collective agricultural activities and investing in the sector.
- Financial Institutions: Banks and financial institutions in Portugal can offer investment products – such as Caixa Invest Agro – aimed at the agricultural sector, such as term deposits or thematic investment funds that include agricultural companies.
Venture Capital and Private Equity Funds
Investors can tap into venture capital and private equity funds in Portugal. These funds invest in early-stage Portuguese companies or companies looking for growth and expansion. Investors can participate in the success of these companies and receive solid returns based on their performance.
With the start-up ecosystem booming, investing in start-ups is a way of supporting and benefiting from the growth potential of new businesses. These funds can offer significant return opportunities, although they also involve a higher level of risk.
Return on Investment Funds
As for profitability, returns vary depending on the type of fund and the underlying assets. It is important to realize that all investments carry a certain level of risk, and returns are not guaranteed. Investors should carry out careful research and consider their risk profile before investing in any fund.
In addition, it is advisable to consult a financial advisor or investment specialist for personalized guidance based on your financial goals and individual situation. Portugal can continue to be an excellent choice for investors if they are willing to explore the various investment opportunities available in the country.
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