By Miguel Silva Reichinger Pinto Correia No Comments
What will change?
The Portuguese Government has published its decree-law introducing substantial changes to the Portuguese Golden Visa programme and thus the following new rules apply to obtain said visa:
- Capital transfer in the amount of 1.5 million euros or more;
- Capital transfer in the amount of € 500,000 or more, which is applied to research activities carried out by public or private scientific research institutions, integrated into the national scientific and technological system;
- Capital transfer in an amount equal to or greater than € 500,000, intended for the acquisition of investment fund units;
- Capital transfer in an amount equal to or greater than € 500,000, intended for the constitution of a commercial company with headquarters in the national territory.
- The purchase of real estate with a value of € 500,000 or more is only allowed when the houses are located in the Autonomous Regions of the Azores and Madeira or in the interior territories.
These changes come into force on January 1, 2022.
Why Madeira, of all other places in Portugal?
Weather: Geographically located off the coast of Africa, Madeira is certainly European. The currency is the euro, the culture is European and politically speaking Madeira is 100% Portuguese. And yet the climate is sub-tropical with temperatures rarely dropping below 20 degrees centigrade even in the winter, and a high level of rainfall in the mountainous interior ensures the island is very green for the majority of the year.
Reduced operational costs: Madeira offers low operational costs when in comparison with other European countries. In fact, the cost of human resources and the price of several goods and services are very competitive when directly compared with other European locations, allowing companies to face considerably lower costs when establishing operations in Madeira.
Connectivity: Business wise, Madeira has a highly qualified workforce and most of the people speak and understand the English. Add that to the fact the its Cristiano Ronaldo Airport connects you to most of European capitals (Paris, Amsterdam, Vienna, Zurich, London, Berlin…) and it is easy to understand why the tech start up scene is developing.
In terms of international communications connectivity, Madeira is connected to a Submarine Cable Station connecting Europe to Africa and the Americas, hosted in the “Madeira Datacenter”, operating several international optical submarine cables, allowing interconnectivity with national and international SDH networks and providing, as such, significant advantages in terms of quality, cost, bandwidth and scalability.
Safety: Madeira is Portugal’s safest region, with a criminality rate of just 26 criminal cases per thousand inhabitants. Continue reading
By Miguel Silva Reichinger Pinto Correia No Comments
One of the fastest routes to obtain Portgual’s Golden Visa, residency by investment program, is through a capital transfer into an investment fund.
Under the current Golden Visa rules, one can apply for a residency permit in Portugal (with full free travel access to the European Union) through different investment options, one of them being a capital transfer of the amount of € 350 000, or higher, for the acquisition of units of investment funds or venture capital fund of funds dedicated to the capitalisation of companies, capital injected under the Portuguese legislation, whose maturity, at the moment of the investment, is, at least, of five years and, at least, 60% of the investments is realized in commercial companies with head office in national territory.
Note that the minimum investment for the Golden Visa, under the fund, is way lower when compared with the investment in real estate (€ 500 000) or simple capital transfer (€ 1 000 000).
Main advantages of the opting for an investment fund:
- The fund must be professionally managed by experts.
- Venture capital funds are a tax-efficient vehicle.
- Some funds offer a minimum return hurdle-rate (usually of 5%) which means managers will only be compensated if the fund performance is above a certain percentage.
- Some funds have the support of the Portuguese Government through subsidies or financed by the IFD (Instituição Financeira de Desenvolvimento).
- Funds must be regulated and must comply with the rules stipulated by the Portuguese Securities Market Commission (CMVM), which means that fund managers are regularly audited by third parties.
(2) Unlike real investment, which is subject to municipal transfer and property taxes and notary fees and rental tax (if investment is rented out), investment in funds is not subject to initial taxation and may even be tax-exempt.
Types of investment funds for the purposes of Golden Visa application
There are several types of investment funds, such as, for example, securities funds (which invest mainly in shares), real estate funds (which invest mainly in real estate) and venture capital funds (which focus on investment in companies).
Advantages of the Golden Visa
Portugal’s Golden Visa grants the holder the following rights:
- Residence visa waiver for entering Portugal.
- Living and working in Portugal, on condition that they stay in Portugal for a period of 7 or more days, in the first year, and 14 or more days, in the subsequent years.
- Benefit from the Non-Habitual Resident tax regime, if the applicant wishes to permanently relocate to Portuguese territory.
- Visa exemption for travelling within the Schengen Area.
- Family reunification – this means that the following applicant’s family member can also get benefit from the Golden Visa:
- The spouse (marriage or civil union and regardless of gender);
- Minor children (below 18 years old) or dependents of the couple or the spouse with special needs;
- Minors (below 18 years old) adopted by the visa holder of the respective spouse (be means of a decision issued by the competent authority of the country of origin, provided that the law of that country recognizes adopted children identical rights and obligations as to the natural affiliation and as long as that decision is recognized in Portugal);
- Children of age, dependent of the couple or of one spouse, single of age and studying at an educational establishment, irrespective of the country where said establishment is located.
- Parents of the golden visa holder or of the respective spouse, that are dependent
- Minor siblings, under the legal guard of the golden visa holder pursuant to a decision issued by the competent authority in the country of origin and as long as such decisions is recognized or obtains legal recognition under Portuguese jurisdiction
- Minor children or children with special needs, single, including adopted children of the partner of the golden visa holder as long as legally trusted to the them.
- Applying for permanent residence after 5 years.
- Applying for Portuguese citizenship after 6 years (subject to knowledge of the Portuguese language).
Why apply through Madeira Island, Portugal?
Golden visa applications are processed, on average, faster, when compared to the Portuguese mainland.
For more information on these matters, please do not hesitate to contact us. MCS and it’s team has more than 20 year of experience in assisting private and corporate clients in investing in Portugal and Madeira Island. Continue reading