Portugal’s popular Golden Visa investment programme looks set to be ending after 15 years of operation, with warnings that other schemes for Malta, Cyprus and Bulgaria are on their way out as well.
Portuguese Prime Minister, António Costa indicated in November 2022 that the programme would be re-evaluated, raising flags that the scheme’s days were numbered.
While the Portuguese parliament ended up voting in support of keeping the programme – and directing it towards investment in more rural areas in the country – Costa presented reforms this past week, proposing changes to immigration law and ending the Golden Visa investment scheme.
The primary agenda of the council sitting where the reformers were proposed had to do with housing issues in Portugal and, in particular, the affordability of rentals, as well as the availability to locals of housing stock for long term rentals.
According to Andrew Rissik, Group International Director at Sable International, the proposal doesn’t mean an immediate end to the scheme, with a long process still ahead. However, the outcome could have implications for wealthy South Africans looking for a Plan B or European retirement option.
“This is a preliminary proposal, and the next step will be a public consultation process with all relevant stakeholders being asked for feedback,” Rissik said. “This will happen over the next month, after which a final proposal will be drafted and presented to Parliament, upon which it will be voted.”
Any further amendments will be considered before it returns to Parliament for general approval. If approved, it will then be sent to the President of the Republic for ratification or reconsideration.
For those who are already invested in the programme, Rissik said it is important to understand that no changes have yet been legislated or approved.
“In addition to this, there is a bigger underlying question, which will have to be debated, as to if the Portuguese parliament can change the terms of the Golden Visa for those already invested in the programme,” he said.
Investment programmes
The Golden Visa Programme was initially introduced to help the Portuguese economy recover from the 2008 financial crisis, and has been widely successful.
According to Rissik, to date, it has generated over EUR 6.5 billion for the Portuguese economy and over 10,000 residency permits have been granted.
“Part of the programme’s success lies in the fact that the full amount can be invested and investors can earn a possible return – there’s no ‘government contribution’. The GVP also has a low physical presence requirement – you can obtain residency in an EU country with only 35 days spent in Portugal over five years, making it an excellent Plan B or retirement option,” he said.
According to Philippe de Beer, CEO of Park Lane Properties, the potential end of the Portuguese golden visa programme is just the latest in a growing trend in Europe to end such schemes.
“Other European countries may well follow suit soon under increased pressure from the European Commission to shut down these schemes, which it has repeatedly stated raise inherent security, money laundering, tax evasion and corruption risks for the member states and for the EU as a whole,” he said.
De Beer said the European Commission has been opposed to “golden visa” schemes for some time, and that following the outbreak of war in the Ukraine last year, it insisted that EU member states operating these programmes implement much stricter controls, to prevent criminals as well as Russians and Belarusians who support the war in Ukraine from benefiting from such visas.
It also urged an immediate end to the citizenship-by-investment or “golden passport” schemes operated by Malta, Cyprus and Bulgaria, and they have all committed to ending these, he said, adding that Bulgaria’s parliament has already voted to do so.
The EU countries which still have “golden visa” programmes include Austria, Belgium, Bulgaria, Cyprus, Greece, Italy, Ireland, Latvia, Malta, Spain and Switzerland.
“But it is clearly going to become more difficult to access these, and Europe has, in any case, become much less attractive to South Africans seeking a second residency due to the negative economic and social effects of the war in Ukraine and the Covid-19 pandemic,” De Beer said. businesstech