Key Insights & A Guide for Investors with €350,000+

Throughout hundreds of webinars, seminars, 1-2-1- meetings and international roadshows, it’s no surprise that the same questions are often asked about Portugal's Golden Visa program and its fund investment route.

As a follow-up to our previous article on the fund route for Portugal’s Golden Visa investment, here we collate the most common questions, answered by a range of lawyers, fund managers and Golden Visa experts.

What is the minimum entry Level for Golden Visa fund investments?

The minimum entry level for Golden Visa fund investments in Portugal is €500,000. This threshold allows investors to participate in the program by investing in qualified investment funds, which can include venture capital funds or private equity funds focusing on different sectors.

Some fund routes allow for investors to receive early income payments of €50,000 to €200,000 so that in the first year their initial investment outlay is lower.

What is the most important thing to check before investing?

The track record of the companies involved, including the fund sponsor and the fund manager, is crucial. A proven history of successful fund management and sound investment decisions by these entities ensures a lower risk for investors. It provides confidence that the fund is managed by experienced professionals who can navigate market fluctuations and strive to achieve positive returns.

How do you exit a fund investment?

Exiting a fund investment depends on the type of fund chosen. Some funds are closed and time-limited, meaning they have a fixed investment period, typically ranging from five to ten years. In these cases, investors can exit only at the end of the fund's term or during specified liquidity events as outlined in the fund's agreement. For Golden Visa investors, they must stay invested until their citizenship has been achieved.

On the other hand, open-ended funds offer more flexibility, allowing investors to redeem their units at certain intervals. It’s extremely important to consider the ease of exit when evaluating a fund investment.

Credits: Supplied Image; Author: Client;

Who is investing in Golden Visa funds?

It’s a big mix of international investors, with a lot of US clients, some UK and a variety of other nationalities. Their reasons for investing are often similar. Here are some examples. For instance, a 49-year-old from San Diego, US, with his family of four, sees this opportunity as a gateway for their two children to easily access higher education in Europe. With both children nearing university age and considering France and Portugal for their studies, the Golden Visa offers a practical solution. Although the ability to travel freely around Europe is a secondary benefit, it adds to the overall appeal for this family.

Similarly, a 55-year-old client from Istanbul, Turkey, with her family of three, values the Golden Visa for its convenience in facilitating frequent business and lifestyle travel across Europe. She considers the low-risk investment route sensible and appreciates the minimal residency requirement in Portugal. On the other hand, a 48-year-old from Manchester, UK, who grew up in France and Portugal, aims to provide his children with the same European access he once had. His primary motivation is to secure European citizenship for his entire family, including his dependent father, with plans to return to Portugal within the next decade.

Is there a minimum investment period? And if an investor redeems, does the golden visa expire?

The minimum investment period for these funds is typically 8-10 years, which corresponds with the minimum period required to maintain the Golden Visa: 6 years. If an investor redeems their investment before this period, their Golden Visa status may be jeopardised, potentially leading to expiration or non-renewal.

Credits: Supplied Image; Author: Client;

Are the funds regulated?

Eligible funds are regulated by the Portuguese Securities Market Commission (CMVM) to ensure compliance and protection for investors. Each fund will have a fund manager whose responsibility is to ensure that the fund complies with all the necessary requirements.

Is inheritance tax imposed?

Portugal does not impose a 10% inheritance tax on worldwide assets. Instead, inheritance tax is applicable primarily to Portuguese assets, and certain exemptions exist for close family members. Golden Visa holders and future citizens should consult with tax advisors to understand the specific implications based on their asset portfolio and personal circumstances.

How can funds linked to hotels or offices be eligible? I thought real estate investments were not allowed.

Investing in real estate is not allowed under the new laws. Equally, funds that invest directly into real estate are not eligible either. The key distinction is what the funds are actually investing in as no business in the world operates without some sort of real estate footprint.

Credits: Supplied Image; Author: Client;

An investment in real estate aims to directly monetise yields from the property itself, unlike operating a property through a business such as a restaurant, hotel, or serviced office. Therefore, a fund that invests in a company operating offices or hotel services is technically not investing in real estate. This distinction is crucial because these funds do not engage in buying, reselling or developing real estate. Before promoting any fund or investment, thorough due diligence and legal reporting are always conducted to ensure compliance.

How long will it take to get EU citizenship? I heard there are delays in the system.

The typical timeframe to obtain citizenship through the Golden Visa program is around six years, provided that all residency requirements are met. Around October 2023 the Portuguese government made a ruling that the 5 years would start from the day that the initial Golden Visa application was accepted. This was of great relief to investors who had been accepted to the programme but were experiencing some delays throughout the process.

Whilst these are our most common questions, we are obviously asked many more. If you have any questions about the Golden Visa programme, please do not hesitate to contact me.

Niamh Erbek - Athena Advisers

+351 308 80 29 81