The five benefits of Portuguese Golden Visa over the Spanish program

Golden Visa Espanhol

In Portugal, as in Spain, it is the Chinese citizens who lead the number of Applicants for the Golden Visa Program. However, there are 5 advantages of the Golden Visa Program in Portugal that the Chinese still see as crucial in their choice over the Spanish Golden Visa.

Both in Portugal and Spain, Golden Visa holders are entitled to five years: to enter and stay in the country where the investment was made; to move to the other countries that integrate the Schengen Area without the need for a visa; to family reunification; to access the permanent residence permit at the end of the five years of the Programme; and to the nationality of the country where the investment was made, fulfilling the legal requirements for that purpose.

Portugal, however, has greater advantages than the Spanish Golden Visa, the main reasons for Chinese citizens prefer the Portuguese Golden Visa are the following:

 

Permanent Residence

Portugal allows the holder to obtain a permanent residence permit at the end of the 5th year of the Golden Visa Program, even when the investor has only stayed in Portugal for the minimum required periods, in a total of 35 days over a total of 5 years. The Spanish Golden Visa requires legal, effective, and continuous residence in Spanish territory during those 5 years. This means that the investor will have to reside in Spain for at least 183 days per year, not being able to be absent for more than 10 months from Spain for a total of 5 years to obtain the permanent residence permit.

 

Obtaining European citizenship

Another of the main advantages of the Golden Visa Portuguese Program, compared to the Spanish, is the acquisition of Portuguese nationality at the end of the 5 years of the Program. Even having stayed in the country for the minimum mandatory periods of the Programme – 7 days, followed or interpolated in the first year; fourteen days, followed or interpolated in the subsequent two-year periods – investors will only have to demonstrate some basic knowledge of the Portuguese language. As for the Spanish Programme, investors will only be able to obtain Spanish nationality at the end of 10 years of actual residence in Spain (as indicated above), which is twice as long as the requirement in Portugal.

 

Tax Advantages

Even in the case of investors who intend to reside in Portugal, the Golden Visa Program presents a tax advantage over the Spanish Program, since foreign investors who intend to reside in Portugal can benefit from the Non-Habitual Resident Status (RNH), which allows its holders, for ten consecutive years, to be entitled: to the exemption of income obtained abroad from pensions, dependent, independent work, capital, real estate income and capital gains, intellectual or industrial property; and to the taxation of income obtained in Portugal at reduced rates in the case of high added value activities.

In Spain, there is no such tax status, there is only a similar regime called “Beckham” which has a duration of only 6 years and has more conditioning factors than in Portugal.

 

Investment amount

In both Spain and Portugal, there are several possible types of investment. However, over the years, the type of investment most chosen by investors is real estate. In Portugal, the minimum investment amount in these cases is €280,000, unlike Spain which has a minimum value of €500,000.

When analyzing the other possible types of investments, the minimum investment possible in Portugal to acquire a Golden Visa is €200,000, unlike Spain which has a minimum investment amount of €500,000.

 

Political Stability

When making any kind of investment in a foreign country, one of the most relevant factors for any investor is the analysis of the socio-political stability of the country in which the investment will be made.

Portugal presents itself as a safe and stable country both socially, politically, and economically, while Spain, in recent years, has presented an unstable political framework, already counting 4 legislative elections in the last 4 years. Moreover, the crisis in Catalonia presents a divided country, a very risky scenario for investment, especially when 44% of investors who have already opted for the Spanish Golden Visa, have chosen Barcelona to invest in real estate.

If Catalonia becomes independent (as the Catalan people desire), the consequent exit from the European Union may harm the investors who have invested there, and who may thus lose the greatest advantage that the Golden Visa presents, which is free movement in the European Space.

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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.

We’re here to help you with this mission and to answer any questions you may have about this or any other topic that falls under the remit of our team of lawyers. Discover all our services here and don’t hesitate to get in touch to find out more.

The minor or incapacitated children of individuals who have acquired Portuguese nationality derived after the birth of their children may apply for the acquisition of Portuguese nationality, expressing such will and proving the fulfillment of the applicable legal requirements.

However, this claim can be opposed by the Public Prosecutor’s Office, through a legal action opposing the acquisition of nationality, and one of the grounds that the Public Prosecutor’s Office can use in this action is the lack of an effective link of the applicant to the Portuguese community.

If the Public Prosecutor’s Office decides to oppose the acquisition of nationality, it will still have to prove that the person concerned does not have such link as, since 2006, and after express confirmation by the Supreme Administrative Court in 2016, it has been clear that the applicant for nationality only has to declare, and no longer has to prove, that he has an effective connection to the Portuguese community.

It is true that, in 2019, an Internal Service Guideline was issued by the Central Registry Office, which determined the presumption of the existence of an effective connection to the national community by all minors under 14 years of age, with the aim, among others, of relieving the pressure that had been generated on the courts in the past with the submission of several legal actions opposing the acquisition of nationality by the Public Prosecutor’s Office.

However, in October 2022, Internal Guidance ceased to apply, and the Registry Services began to consider that a case-by-case analysis should be carried out and that situations in which the Registrars had well-founded suspicions of the lack of an effective connection to the national community should be reported to the Public Prosecutor’s Office, regardless of the age of the person concerned.

How can one justify the opposition to the acquisition of Portuguese nationality?

We are waiting to see whether the Conservatives will only report cases where they have “well-founded suspicions” that there is no effective link or whether they will do so in all cases, leaving it to the Public Prosecutor’s Office to investigate and, if it so decides and has sufficient evidence, to take legal action against the opposition to nationality.

It also remains to be seen whether the Public Prosecutor’s Office will file opposition actions in all cases, regardless of the evidence it can (or cannot) gather, leaving the final realization of justice in the case in the hands of the judges, or whether it will only file an opposition judiciously when it has evidence of the absence of an effective link.

In addition to these doubts, there is also perplexity and concern about the counting of the 1 year available to the Public Prosecutor’s Office to file an opposition. In 2022, the Portuguese Nationality Regulation was amended in such a way that the time limit will be counted from the date of registration of the acquisition of nationality, instead of the date of the fact on which the acquisition of nationality depends (i.e., the applicant’s manifestation of the will, which occurs with the submission of the file), and which was the solution previously in force.

This means that, as of April 15, 2022, and even about cases that were already pending on that date (except cases based on the descent of Sephardic Jews), the Public Prosecutor’s Office can now oppose the acquisition of nationality, even after it has already been registered in the Portuguese Civil Registry.

From our experience, we can say that there are already Civil Registry Officers who are notifying the interested parties in cases submitted more than 1 year ago that they may report their cases to the Public Prosecutor’s Office on the grounds of lack of effective connection to the national community.

However, we continue to follow these cases closely to see what the practice of the Civil Registry and the Public Prosecutor’s Office will lead to in these matters.

Do not hesitate to contact our team if you have any questions about this matter or need advice on any other related to obtaining Portuguese nationality or citizenship.

In this article, we will explore the time limit for opposing nationality acquisition in Portugal, as defined in Article 56, number 1, of the Nationality Regulation (Decree-Law no. 237-A/2006, dated 14th December). Recently, there have been amendments to the regulation that have significant implications for the process. We will discuss these changes and their potential impact on individuals seeking Portuguese nationality.

We mention “recent” changes, but the amendment has been in effect for over a year since April 2022. Despite this, it seems that the activity of the Registry Office has become more intense now, and considering the numerous questions we receive daily on this topic, we deemed it necessary to write an article to explain.

 

The Previous Time Limit and its Basis

Under the previous version of the Nationality Regulation, the one year for opposition to nationality was calculated from “the date of the fact on which the acquisition of nationality depends.” In practical terms, this referred to the date of submission of the nationality acquisition process, where the individual’s will to acquire nationality was manifested.

 

Recent Amendment – DL 26/2022

In 2022, a notable amendment (DL 26/2022) was made to the Nationality Regulation, coming into force on 15th April. Surprisingly, this change was implemented with minimal announcement by the government. The amendment introduced a significant change to the time limit for opposing nationality acquisition.

 

Current Time Limit for Opposing Nationality

As per the amended Article 56 of the Nationality Regulation, the Public Prosecutor now has one year from the date of registration of nationality acquisition to file a judicial action in administrative and tax courts to oppose the acquisition of nationality by the will.

This means that the registration date, which is the date of the nationality grant, allows the initiation of legal action at any point during the process and even within one year after the process is concluded.

 

Early Identification and Concerns

Being vigilant of legislative changes, we were among the first to draw attention to the amendment before it was enacted. We expressed concerns about this change, considering that the previous time limit for opposing nationalities was more favorable to applicants.

 

Cases Pending and Notifications

According to the law of 2022, the amended Decree-Law applies to cases pending on the date of its entry into force. As a result, the Registry Office is indeed notifying cases pending for more than one year since the date of submission.

 

Our Ongoing Cases

Concerning our specific cases, despite having several ongoing processes, we have received notifications in only a few cases where the process was initiated in 2021 and the notifications were received in 2023. Interestingly, these notifications were not solely related to connection proof; there were other factors involved.

In response, we handled these cases strategically, and, so far, none of them have escalated to court. Nevertheless, we must remain vigilant, as the possibility remains.

 

Conclusion

Understanding the time limit for opposition to nationality is crucial for individuals seeking Portuguese nationality. The recent amendments to the Nationality Regulation have shifted the basis of this time limit, impacting the process and potential legal actions. We advise applicants to be well-informed and proactive during the process and seek legal guidance to navigate any challenges effectively.

If you wish to do so or have any questions about this topic (or any other), don’t hesitate to contact us. Our team of lawyers is available to assist you anytime!

NOTE

This article was written by our lawyer and managing partner Ana Sofia Lamares.

She has dealt with countless Portuguese nationality requests and her experience is highly sought-after for those seeking help when it comes to granting Citizenship or Nationality. Don’t hesitate to get in touch with her here.

Get in touch with us for further information.

Lamares, Capela & Associados is committed to protecting and respecting your privacy and we will only use your personal information to manage your account and provide the products and services you have requested. Occasionally, we would like to contact you about our products and services and also about other matters that may be of interest to you.