Golden Visa Program

Portugal Golden Visa Program: Are Investment Funds Better Than Property?

Investing in property is the most common way to take advantage of Portugal’s Golden Visa program. But there’s another great route that you might not know about, and that’s investment funds. 

In this article, we’ll compare the two routes in detail, so you can decide which would be the best fit for you and your family. 

Portugal’s Golden Visa program is set to change significantly in 2022.  

Most of the changes will affect the property route, with Lisbon, Porto, and much of the Algarve being removed from the scheme altogether.  

But, if you’re still keen to get your Golden Visa through property, don’t let this news alarm you.  

Madeira will still be available in 2022, at the same Golden Visa program investment thresholds as now (€350,000 and €500,000).  The island has plenty of prime real estate with good ROI potential. It’s also a fabulous place to live. 

The Golden Visa investment funds route will also change, with the minimum threshold being increased from €350,000 to €500,000. 

The investment fund Golden Visa route is a very convenient pathway to Portuguese EU citizenship, with the potential for netting a decent return on your investment. It’s an excellent alternative to the property route. 

With a fund, you pool your money alongside other investors, which is then spread across a wide range of underlying investments. This allows you to diversify your overall risk.

If you get your Golden Visa by investing in a fund, then you’re still free to buy property anywhere you like in Portugal, without being bound by any restrictions on location or cost.  

How do we select good investment funds?

With Golden Visa investment funds, our job is really to buy on behalf of our clients. We ask ourselves:

  • Would we put our own money into this fund?
  • Do we trust the people running it?
  • Do they have a good track record?

Our aim is to get our clients into the best possible position for achieving a good ROI, beyond just the short-term goal of obtaining residency with the Golden Visa.

We typically work with funds that invest in property development projects in Portugal. In these situations, we aim for funds that offer diversification across multiple properties, instead of just one large one, making for easier liquidation when the fund end date comes around.

Our financial experts have 40 years of experience in financial services. We rigorously analyze every fund that we work with  – so you can invest with confidence.

What does the Golden Visa process look like for the funds route?

  1. We meet the prospective client, introduce them to the fund manager and together we determine the best course of action 
  2. The client decides to proceed and invest 
  3. Client provides fund with commitment instructions 
  4. Legal counsel appointed to act on behalf of the client
  5. Client opens personal bank account in Portugal 
  6. We set up an FX transfer account for the client (if they don’t already have the funds in EUR) 
  7. Client transfers investment funds to their Portuguese bank account 
  8. Client signs all fund documents 
  9. Fund evaluates and approves  
  10. Client transfers funds from Portuguese personal account to their fund account 
  11. Fund manager issues certificate which proves the investment 
  12. The certificate is used to submit the client’s Golden Visa application to SEF (Portugal’s immigration department)  
  13. SEF schedules an appointment for the client to complete their biometrics and collect their residency permit 
  14. Assuming the application is with SEF before December 31, 2021, then the client will have successfully met the €350,000 deadline. Any further delays (e.g., in scheduling biometric appointments) are down to SEF and won’t affect your investment threshold. 

The great thing about the investment fund process is that, with the right planning, it can be completed in a matter of weeks, so you can still secure a Golden Visa at the €350,000 level before time runs out at the end of 2021.  

We can manage all aspects of the process for you, making it very streamlined for you as the investor.  

What’s more, we can manage almost everything with you outside of Portugal. You’ll just need to make one short trip here to complete your biometrics and pick up your residency permit.  

In contrast, the property route typically requires more time spent in-country looking for the right property. 

Minimizing travel to Portugal may be convenient at present, especially for investors in countries like Hong Kong, which still have stringent quarantine requirements.  

Golden Visa Program: Funds vs Property

FUNDS (min. €350K investment)PROPERTY (min. €500K investment)
Timeline to submit application (estimated)5-7 weeks (assuming all paperwork in order)Variable – can’t be submitted until you have the property deed
Associated costs Subscription fee = €5,250
Legal fees = €6,000 (approx,may vary)
Total investment cost = €361,250
Transfer taxes (7.5 %) = €37,500
Legal fees = €6,000
Total investment cost = €543,500
Hassle factorNone; once the investment is made, you’re all set for residency and a pathway to citizenshipFinding/managing tenants and/or holiday guests,
Dealing with property management firms,
Maintenance,
Other possible legal costs 
Tax implications No tax on dividends or capital gains, if you’re not a Portugal tax resident Capital gains tax on property sale, even as a non-resident

So which Golden Visa route is best for you? 

Investment funds might be the right fit if… 

  • Living in Portugal isn’t necessarily your plan with the Golden Visa 
  • You might want to live in Portugal in future, but haven’t yet chosen your perfect location  
  • You want to access the Golden Visa program at the €350,000 level before time runs out (there’s still time to complete the process if you can invest before the end of October) 
  • You’re keen to save money on associated taxes and fees 
  • You don’t want the added hassle and expense of finding a reliable management firm to look after the property and find suitable tenants  
  • Your property needs don’t match Golden Visa program requirements (for example, you want something modest, or in a lower-cost area), although you can buy more than one property to reach the minimum investment threshold. 

Property might be better for you if… 

  • You want your investment to function both as a place to live and as your route to residency in Portugal (for example, if you’re selling your main home elsewhere to raise the Golden Visa funds). For Brits, this could suit you if you want to live in Portugal for four months per year, but can’t due to the 90/180 rule in the aftermath of Brexit. With a Golden Visa you can.  
  • You’re not in a rush and are happy to spend time looking for the perfect property investment 
  • You’re willing to pay the higher associated costs in taxes and fees
  • You’re happy to invest outside of prime areas of Lisbon, Porto, and the Algarve (realistically speaking, there’s not much time left to find the right property, go through all the legal processes and secure the Golden Visa before the 2022 changes kick in). We strongly suggest looking at properties in Madeira. 

Act fast to get your Golden Visa for just €350,000!

Time is running out to get a Golden Visa at the €350,000 investment level. If you can invest in a fund by the end of October, you’ll still be able to take advantage of the lower level.

That’s a saving of €150,000 on 2022 prices!  

We’ve analyzed a range of investment funds and have selected several with excellent prospects, managed by experienced individuals. 

These funds don’t advertise publicly, so we can’t talk about them in detail here.  

Instead, we can arrange a call with a fund manager who can walk you through the fund and answer all your questions one-to-one. 

2 thoughts on “Portugal Golden Visa Program: Are Investment Funds Better Than Property?”

  1. Is the €350,000 investment a sunk cost or are there any circumstances when it can be repaid ?
    Who receives the income and capital gains on the fund ?

    1. Hi Alan,
      Unlike some Golden Visa programs (e.g. Malta), this investment is not a sunk cost. Depending on the fund model, the investor receives the income and capital gains.
      We prefer the funds where the fund managers’ compensation is dependent mainly on the performance. We also prefer a target maturity date with the ability to extend (which is the investor’s decision) if the market is in a dip at the maturity date. Some funds even offer dividends during the first 5 years depending on the model.
      If you’d like us to walk you through in more detail, please email hello@digitalemigre.com and we can set up a Zoom call.

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