Indians among top nations getting Portuguese visas

With long wait for US green card, many Indians are eyeing Portugal Golden Visa before seeking American permanent status

By Shilpa Menon

The Indo-Portuguese connection is many centuries old, stretching way back to the turn of the 15th century when Vasco da Gama would reach the south-western coast of the Indian subcontinent.

Many Indians who have visited the scenic destinations of Goa or Daman and Diu will testify to the beautiful Baroque style architecture witnessed in the Catholic churches built by the Portuguese in the 16th and 17th centuries.

However, recent years have experienced a new kind of connection being built between these two nations, a reversal of trends where Indian citizens are now investing in properties on Portuguese soil.

Portugal grants a Resident Permit for Investment, also known as Autorização de Residência para Investimento (ARI) or Golden Visa, to third country nationals outside the European Union states through different routes, including the purchase of real estate property.

Shilpa Menon

The program has allowed the European nation to garner an investment of over €5.8 billion in less than a decade since its inception in October 2012, with almost 95% of it being in the real estate market.

While about 60% of the visas have been granted to Chinese and Brazilian nationals, India is slowly starting to rise in the rankings.

It was among the top 5 countries whose nationals were granted visas in the months of January, May, and November in 2020, and in April, 2021.

Last year saw a whopping 87% increase in the number of Golden Visas issued to Indians by Portugal, from 33 in 2019 to 62 in 2020 .

The Portugal Golden Visa (PGV) is sought after by well-heeled international families as it provides a relatively simple path to obtain an alternative residency in a European country.

With a PGV, families can avail of benefits including the ability to live and work in the country, travel access to the entire Schengen Area, and the opportunity to apply for Portuguese citizenship after five years of legal residency (as compared to seven years in Greece or ten years in Spain).

Further, a PGV holder needs to be present in Portugal for as few as seven days a year on average throughout the investment period, making it a feasible option for many foreign nationals.

Residency in Portugal allows one to benefit from access to a world class system of education with a strong theoretical basis and extensive focus on research that is fully integrated into the European Higher Education Area.

As a resident, one can also access the excellent healthcare system provided by Serviço Nacional de Saúde (SNS), the National Health Service of Portugal.

Portugal ranked an impressive 21st in the recent ‘2021 Best Countries rankings’ formulated by the US News in partnership with BAV Group and the Wharton School of the University of Pennsylvania.

It is also the 4th most peaceful country in the world, according to the 2021 Global Peace Index (GPI) report produced by the Institute for Economics & Peace (IEP).

Read: What does expiry of EB-5 program mean for immigrant investors (August 12, 2021)

Add to this the Mediterranean climate and the natural beauty of the country, and you have an ideal location that foreign families would like to call their second home.

Living the ‘good life’ in Portugal may be a noble aspiration, but there are only so many ways to achieve it. The ARI or the Golden Visa program allows you to fulfill this dream through different routes.

These include capital transfer of €1 million and above, the creation of 10 job positions, purchasing real estate worth €500,000 and above (€350,000 if the construction dates back more than 30 years or is located in urban regeneration areas, for refurbishing), or capital transfer schemes for investing in different activities and funds starting at €350,000 and above subject to certain conditions.

The real estate market in Portugal has witnessed an unprecedented boom in recent years, rising more than 86.5% over the past decade.

While the purchase of property in Portugal has been the choice route for foreign investors so far, over the last year or so, there has been an increasing interest among PGV investors to explore alternative routes.

The private investment fund route, which is only a couple years old, is one such alternative route that is fast gaining popularity.

This is due to several reasons, including, but not limited to tax efficiency, return expectations, reduced administrative burden on the investor and diversification benefits.

Some funds, for example, have partnered with real estate developers in Portugal as well as elsewhere in Europe, putting together diversified portfolios of rental income-earning assets, instead of just one asset.

These private real estate funds are regulated by the Portuguese securities market commission, Comissão do Mercado de Valores Mobiliários (CMVM), and qualified to take in PGV investors.

They are typically closed-ended in nature and the investment is locked in for around 7-8 years.

The exit strategy is usually the sale of assets in the portfolio, which rests on the thesis of a strong capital appreciation expected in the region’s real estate over the next few years.

Most of the investment through the Golden Visa route has been targeting prime real estate along the Portuguese coastline, prompting the Portuguese parliament to approve a measure in February last year limiting Golden Visas being issued in these areas, including in the cities of Porto and Lisbon.

While this measure was to come into effect from July 1, 2021, the government has decided to extend the deadline by another few months till January 2022.

The minimum investment amount for the private investment fund route to obtain a PGV will also increase from €350,000 to €500,000 in January 2022.

These developments have led to a rush for investment into funds as well as prime real estate in Lisbon and Porto, with potential investors attempting to make the best out of this window of opportunity, especially after a slight lull on account of the pandemic.

Owing to the several fine nuances involved in the process, most families prefer to work with advisory firms to smoothly navigate the changing regulations, identify the right investment route, and have experts guiding them through the journey.

With proper guidance and planning, families can easily establish a second residency in the beautiful Iberian Peninsula.

(Shilpa Menon is Senior Director, India – LCR Capital Partners)

One Comment

  1. Terence D. Lobo

    desperate buggers will do anything to get into foreign countries by hook or by crook. They will beg on the streets of London and Paris and maybe even PIGS countries like portugal, italy, spain etc. but will not do any hard work when back in India. They are protected by their filthy caste system from even trying to improve their own country Why bother why not take easy way out and run off to Phoren Land? land of opportunity and easy dollars.

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