The end of the new path for the Portuguese Residency by Investment Program?

An article written by Tiago Gali Macedo IMCM, Managing Partner of Next-Gali Macedo & Associados, Sociedade de Advogados, SP, RL

On February 16, 2023, as part of a major intervention package with measures and policies to support housing, the so-called “Pacote Mais Habitação”, the Portuguese Government announced the end of the golden visa program (residence permit by investment) as an apt mechanism to reduce real estate speculation.

Reporting directly to the presented measures that have a direct impact on the residency by investment program, it is fair to say that, the proposal of law has generated a lot of debate within the different political parties – including the Socialist Party that supports the government (PS) – and economic players, especially within the real estate and touristic sectors.

Since then, the aforementioned package of measures followed the normal legislative process, which included public discussion, presentation of the proposal of law n º 71/XV/1.ª in Parliament on April 14, 2023, general voting in the Parliament, which resulted in its approval and, consequent submission for debate and voting in the competent specialized Committee of Economy, Public Works, Planning and Housing within the Parliament.

At this point, with the support and making use of several parliamentary hearings, the different political parties, through their deputies, presented changes and amendments to the law proposed by the government for subsequent voting, approval in the specialized committee and submission to the general assembly of Parliament.

Now, it was at this moment that many proposals for amendments emerged, the most relevant being the amendments proposed by the parliamentary group of the Socialist Party (PS) and governing party on June 28, 2023.

In its proposal, the Socialist Party introduced amendments to the initial proposal of law made by the government to just eliminate the investment routes/options to obtain residency permit by investment/ golden visa, through real estate investments (of any kind) and the capital transfer bank deposit.

In this sense, the Socialist Party suggested keeping the possibility to obtain a residency permit by investment/ golden visa, through:

• Creation of at least 10 jobs;
• Capital transfer with a value equal to or above EUR 250.000 in support of cultural activities or artistic production for the recovery or maintenance of national heritage;
• Capital transfer with a value equal to or above EUR 500.000, for the acquisition of units or parts in non-real estate collective investment undertakings, dedicated to the capitalisation of companies;
• Capital transfer with a value equal to or above EUR 500.000 to:
• set up a commercial company with head office in Portugal, along with the creation of five permanent job positions, or
• the capital increase of a commercial company already established, with head office in Portugal, the creation of a minimum of five permanent jobs or maintenance of a minimum of ten jobs, from those at least five must be permanent jobs and for at least three years;

Furthermore, the mentioned proposal by the governing party adds that investment activities cannot be directly or indirectly destined to real estate investment.

Following this, took place on July 6, 2023, within the Work Group for Housing of the Parliament Committee of Economy, Public Works, Planning and Housing the vote onthe specific package of measures “Pacote Mais Habitação“, including the referred amendment proposals. The vote was carried out “article by article” and receive the work group approval.

Afterwards, the final wording of the proposal of law was ratified in the Parliament Committee of Economy, Public Works, Planning and Housing on July 18, 2023 andsent to the general assembly of the Parliament for final vote and approval.

Now, the final proposal of law will be voted in the general assembly of the Parliament on July 19, 2023.

Next, the law approved is sent to the President of the Republic, which might exercise its right to “veto” or forward to the Constitutional court, in case of constitutional doubts, or just approve it and order its publication. 

Thus, as of the date this article is being written the proposal of law it is not possible to exactly determine when the new law will become into force.

Having said this, it is not possible to determine yet or completely foresee the future of the Portuguese residency permit by investment program/Golden Visa program.

Nonetheless, based on the existing proposed amendments by the governing party and information available at the moment, it is plausible to say that Portuguese Residency by Investment Program/Golden Visa will not end but will instead be forced to follow a new path more focused in productive investment, through the creation of jobs and support of companies, excluding any type of real estate investment.

This new path will also include kind of “rebranding” and change of name of the residency permit, since in the future all residency permit for investment/golden visa will be converted in “residency permit for entrepreneur immigrants”.

Finally, it is clear that all residence permits that are under processing by the competent entities or that were issued before the entry into force of the new law will not be affected.