Navigating Changes in Portugal’s Residency Pathway
While the termination of Portugal’s real estate investment option may have disappointed some investors, the country’s residency pathway remains open for those willing to explore alternative options, says Jerome Morgan, Founder, President & CEO of the Mercan Group.
Could you provide a brief overview of Mercan Properties? What would you highlight as your most important milestones and achievements?
Mercan Properties specialises in the development and management of hotel assets within Portugal’s tourism sector. Presently, Mercan boasts a diverse portfolio of 30 projects spanning key regions such as Porto, Vila Nova de Gaia, Matosinhos, Lisbon, Amarante, Santiago do Cacém, Évora, Beja, the Algarve, and Madeira Island, collectively valued at €1.2 billion. Mercan Properties has significantly contributed to Portugal’s economy by not only attracting foreign investment but also by establishing high-quality tourism assets that drive employment, elevate local potential, and fortify Portugal’s reputation as a premier global tourist destination.
Acquiring real estate to obtain residency is no longer possible in Portugal. How does this development impact your business operations and the investors associated with the company?
It is important for investors and potential investors to understand that Portugal’s residency pathway has changed, but it hasn’t been terminated. While direct real estate investment is no longer possible, the government has recognised the vital role of foreign investment to advance the country’s strategic priorities.
We will continue our operations in Portugal, focusing on the management of hotel assets and hospitality within the tourism sector. Our strategies will focus on future investments aimed at fostering growth in tourism and the Portuguese economy. This is what we have been doing since 2015. With plans to inaugurate three additional hotels in 2024, our commitment to Portugal remains unwavering.
In this new reality, what unique offerings do you provide to potential investors?
We have adapted our business model to align with the new legislative landscape. One avenue offered under the revised law involves investment in venture capital funds to gain residency. We perceive this avenue as compelling for investors. Specifically, investors can engage with Mercan’s venture capital fund. This fund will encompass a diverse portfolio of assets and channel investments into companies managing hospitality and tourism services in Portugal. We aim to differentiate ourselves from other funds by prioritising investment security and predictability. Our focus remains on the hospitality and management sector, solidifying our standing as a key player in Portugal’s vibrant tourism industry.
What specific factors or attributes attract investors to Mercan Properties in comparison to other investment opportunities?
Our business strategy has always been aligned with hospitality and tourism activities in Portugal, and now, we are advancing through the establishment of a dedicated venture capital fund.
We believe our strength lies in our sector experience and extensive knowledge of various residence-by-investment models worldwide, making us a prominent player in the field. Our successful track record and established international partnerships over three decades have empowered us to offer secure and distinctive investment opportunities in promising markets and services. Furthermore, our portfolio places us among the top 10 players in terms of the largest number of fully operational hotels in the country. This achievement is a result of our promotion of internationally renowned brands within the hospitality and tourism sector.
How do you foresee the evolution of residency by investment over the next two to three years? Is there a risk that Portugal might permanently close its residency pathway?
Portugal is set to hold elections in March 2024, which will bring forth a new government and parliament. It’s challenging to predict the future strategic priorities of the incoming executive. However, one certainty remains: Foreign investment has significantly contributed to Portugal’s development, particularly in the realm of tourism. We are confident that key policymakers will continue to acknowledge this reality. We maintain the belief that residency investment models, which positively impact Portuguese society through affordable projects, cultural and heritage promotion, tourism, and hospitality activities, will continue to be considered by the relevant authorities. These models create a high economic impact and add substantial value to the country. As such we do not foresee the extinction of these foreign investment avenues in Portugal.
