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A Golden Opportunity – The Golden Visa explained

A Golden Opportunity – The Golden Visa explained

 

Blessed with more annual sunshine than anywhere else in Europe and with 150km of stunning coastline, the Algarve offers a highly attractive environment for property investors. Portugal may be suffering from the European economic downturn, but its southern coastline known as The Algarve continues to be a highly desirable destination both for holidaymakers and property investors. In effect, the region is a micro-economy that depends primarily on international tourism for its revenue and in spite of the poor shape of many European economies, its tourist arrivals and hotel occupancy have been remarkably resilient over recent years.

By investing at least 500,000 Euros in a property in the region, non-European nationals can automatically obtain Portuguese residential permits enabling free circulation around the 26 Schengen countries with the possibility of obtaining Portuguese nationality after 6 years. For many years the Algarve has been a preferred destination for wealthy northern Europeans looking for a home in the sun either as a permanent residence or a holiday home. Many buyers opt for full service resorts and condominiums where they can use the accommodation for their own vacations and rent the property out through the management company for the rest of the year securing an excellent return on their investment.

Those who choose to settle here enjoy one of the most enviable lifestyles to be found anywhere in Europe. Portugal is one of the safest and most liberal countries in the world and the mild climate of the Algarve, with long warm summers and mild winters, means that families can enjoy the great outdoors and the natural environment all year around. There are excellent international schools providing the background education for entrance into leading European universities. Many people with business interests elsewhere in the world choose to base themselves and their families in this privileged location taking advantage of the excellent communication infrastructure and the proximity of Europe’s major capital cities. In fact, Portugal has a long history of welcoming foreign investors and residents and in the Algarve there is a growing international community sharing this beautiful region with the local population.

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HOW IT WORKS

One of the measures introduced by the Portuguese Government to attract international investment was the creation of this new programme of Residence Permits for foreigners – the so-called Golden Visa – which came into force in October 2012 and created a powerful incentive for those who want the benefit of residency in one of Europe’s most socially stable and safest countries.

 To qualify for the permit through real estate investment the candidate must purchase a property (or, as explained by Pedro Sáragga Leal from PLMJ law firm, purchase of several properties) valued at 500,000 or more, alternative means of securing the residential permit are to make a capital investment of at least 1million or to form a business venture in Portugal that creates a minimum 10 jobs. These investments should be maintained for a minimum period of five years. According to the most recent changes introduced by the Government, investors must demonstrate that they have stayed in Portugal for at least (i) 7 days in the first year and (ii) 14 days in each subsequent period of two years, Rita Alarcão Júdice from PLMJ law firm says. The incentive is also extendible to the candidate’s immediate family members. PLMJ clarifies that in order to prove compliance with the minimum requirements associated with the investment in real estate, the investor must, upon making the application, present the document that proves the purchase or promise to purchase the real estate. This document must also include a declaration from a financial institution operating in Portugal confirming the actual transfer of the capital for this purpose (definitive purchase or payment of deposit). The applicant must also present an up to date land registry certificate including registration of the purchase and, if possible, of the promissory sale and purchase contract in favour of the applicant.

 In cases in which a promissory sale and purchase serves as the basis for the granting of the permit, the respective definitive contract must be presented prior to the application for renewal. It should be noted that properties acquired for the purposes of obtaining an permit may be mortgaged or charged on any part of their value over and above the required minimum of EUR 500 000, and may also be leased or assigned for commercial, agricultural or tourism purposes. Simultaneously and under certain circumstances, taking up tax domicile allows for zero tax on foreign passive income and pensions for a period of 10 years. Another fiscal benefit is that there is no inheritance tax in Portugal. The residence permit is valid for a period of one year and can be subsequently renewed every two years, as long as the necessary requirements for the concession are still maintained. After 5 years permanent residency status may be granted and after 6 years of residency it is possible to apply for Portuguese nationality provided that all the conditions for that purpose are met. Once a Portuguese national and thereby a fully-fledged European citizen, it is possible to live and work freely anywhere in Europe.

If you have any queries or would like some  additional information, we can help. Please call us on +351 282 354 140, alternatively you can email us at carvoeiro@fineandcountry.com