Buying property is no longer a route to a golden visa giving residency rights but foreigners who want to secure one can still put their money into investment funds, which now anticipate a boom in inflows.
Portugal has tightened the rules after initially saying in February last year that it would scrap the golden visa scheme, which has been blamed for exacerbating a housing crisis. It had already sought to redirect property investments from big cities to depopulated areas.
The scheme, which offers wealthy non-European Union nationals who invest in Portugal the right to live in the country, has attracted EUR7.3 billion (HK$62.66 billion) since its 2012 launch. Most participants are from China, Brazil and United States.
Around 90 percent of that money went into real estate, sparking complaints it was driving up house prices in one of western Europe’s poorest nations.
The European Commission has called for an end to such programs, citing security risks.
Putting money into investment funds has been an option under the scheme since 2015, but is now expected to be its principal channel. Other routes include donating to cultural or research projects.
“Real estate has always taken the focus away from the other options,” said lawyer Vanessa Lima, from Prime Legal, which among other services helps foreigners apply for the visa.
“The main type of investment will [from now on] be in funds – there is no doubt.”
To be eligible, applicants must transfer EUR500,000 to one or more qualifying funds.
Portuguese stock market regulator CMVM, which certifies funds, said it could not provide a list of those eligible for golden visa investments. Lima estimated there were around 40, although some may not still be open for investment.
Among those hoping to benefit is sustainable agriculture investment fund Pela Terra, which is already helping to regenerate nearly 1,000 hectares of farmland in the Alentejo region.
“The new regulations are wind in our sails,” said Pela Terra’s Alex Lawry-White. He described the changes as a “correction” of rules that had created problems such as higher house prices, adding: “The golden visa program should have the community … at the center of its focus.”
Another fund, Sharing Education, invests in international schools in Portugal.
“We have noticed an increase in interest from investors … because they are looking for something different,” its head of investor relations Goncalo Santos said.
Although there is no official data yet, three lawyers specializing in golden visas said they expected funds to soon represent 80 percent to 90 percent of all such investments. But with property closed off, some said less money was likely to make its way to Portugal overall.
Contributing at least EUR250,000 to cultural projects or EUR500,000 to scientific research – or generating 10 jobs – can also help secure a golden visa.
Lima believes more funds will be created now that real estate is no longer an option – and that some existing funds will reorient themselves away from property – and that donations toward cultural projects will become more popular.
But Nuri Katz of advisory firm Apex Capital Partners said excluding real estate investments would make Portugal less attractive to investors, who would turn to other countries’ golden visa schemes. Neighboring Spain is among those that still allow property investments.
Lawyer Raquel Cuba Martins said some of her clients were also concerned about political risk. Portugal will hold a snap election in March after the government collapsed following a series of scandals.
“We’ve already had [application] withdrawals because of legislative instability and the lack of certainty,” Martins said.
“[Others] prefer to invest now and start the process rather than wait for a change a new government might make.”
The post Different shade of gold | The Standard appeared first on Hong Kong News Hub.
from
https://hongkongnewshk.com/different-shade-of-gold-the-standard/
No comments:
Post a Comment