RESIDENCE PERMIT FOR INVESTMENT ACTIVITIES
The recent changes (Law 29/2012 dated 9th August 2012, and valid from 8th of October 2012) to the legal rules on entry and stay of applicants in Portugal (Law 23/2007 from the 4th July 2007) created an instrument that allows applicants to obtain a Portuguese residence permit if they make qualified investments in Portugal. This legislation has been regulated by Order n.º 11820-A/2012, from the 4th October 2012, and altered by Order n.º 1661-A/2013 from the 28th January 2013. This has been commonly known as the Golden Visa.
Advantage of the new Law:
The new law allows third country nationals to apply for a temporary residence permit to conduct a qualified investment with residence visa waiver to enter Portuguese national territory. If the permit is approved the applicant is entitled to:
- Live and work in Portugal, while maintaining residence in another country;
- Visa exemption for travelling within the Schengen Area;
- Family reunification;
- Obtain permanent residence (after 5 years and under the terms and conditions set out by the legislation in force);
- Acquire Portuguese citizenship (after 6 years and under the terms and conditions set out by the legislation in force).
To qualify under the new law the applicant needs to make one of the following qualified investments in Portugal:
- Transfer of capital of an amount equal to or above € 1.000.000,00; or
- Creation of at least 10 jobs; or
- Acquisition of real estate of a value equal to or above € 500.000,00.
The investment must have been made at the time the application for the residence permit is presented and must be maintained for a minimum period of five years from the date the residence permit is granted. The investor must declare that he will maintain the qualified investment at the minimum level or above for the five years period.
The family members of the applicant may also benefit from this same scheme.
Usually a temporary residence permit is granted, valid for a period of one year from the date of issue and renewable for successive periods of two years as long as the conditions necessary for its initial grant remain in place. Applicants must regularise their situation in Portugal within 90 days of their first entry into the country (to enter the country legally they must first obtain a Schengen visa, issued by the Portuguese Consulate in the country of origin) and prove they have met the minimum necessary for the qualified investment. For renewal, applicants 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. Proof of this is required by examination of the holder’s passport. Renewal must be requested at least 30 days before the temporary residency permit expires.
The overall cost of each application is just over € 5.500,00 and the overall cost of each renewal is just over € 3.000,00. Both the investor and each member of his/her family that benefits from this same scheme have to pay an individual application and renewal.
The applicants are also and cumulatively subject to a number of cautionary measures, whereby they may not:
- Have been convicted of an offense punishable in Portugal with penalty involving deprivation of liberty of more than one year;
- Have been banned from entering national territory, following expulsion from the country;
- Have had an alert in their name issued in SIS (listed person);
- Have had an alert in their name issued in SEF’s Integrated System.
And all applicants are cumulatively required to:
- Hold a valid passport;
- Hold a Schengen Visa;
- Legalize their entry with SEF within 90 days from the date of their first entry in Portugal;
- Deliver a criminal record issued by their country of origin or by the country where they have been residing for more than one year;
- Deliver a declaration giving their consent to a criminal record check in Portugal;
- Deliver up‐to‐date declarations issued by the Portuguese Tax Authorities and by the Portuguese Social Security confirming the absence of any debts to those entities;
- Sign an affidavit undertaking responsibility to fulfilling the requirements of investment activity conducted in Portuguese national territory;
- Hold valid health insurance.
Any document that is not written in Portuguese or in English must be translated by a translator recognized by the Portuguese diplomatic or consular post at the country of origin, and then authenticated by that same authority.
IMPORTANT: The investment can be done through a company; in this case, the respective value is determined by reference to the proportion of the investment in the respective share capital, as long as the company has its headquarters in Portugal or in another EuropeanUnionMemberState but with a permanent establishment in Portugal.
Transfer of Capital: transfer of capital in an amount equal or superior to € 1.000.000,00.
The first possibility is for the applicant to deposit in an authorized financial institution an amount of €1.000.000,00 or more. In this case the applicant must present a declaration issued by a financial institution stating that the applicant is the sole or first benificiary of the capital.
The second possibility is for the applicant to invest in Portuguese companies. In that case, the applicant must present an up to date commercial registry certificate demonstrating the holding of the stake in the company, or
- In case of companies listed in the Stock Exchange, a statement issued by the Stock Market Regulator, or
- By a banking institution accredited in national territory certifying the ownership of shares, or
- In case of companies not listed in the Stock Exchange a statement issued by the Administration or by the Management of that company, together with the certified accounting report proving the ownership and the full compliance with the minimum quantitative requirement.
Job creation: investment activity that leads to the creation of at least 10 jobs.
The applicant must demonstrate that he has registered the employees for Social Security purposes by presenting an up to date certificate issued by the Social Security Service. Social Security contributions for employers (in this case the applicant for the residence permit) are usually 23.75%, plus 11% to be paid by the employee. These contributions are calculated on the gross value of the monthly salary.
Real Estate Investment: acquiring property of a value equal or superior to € 500.000,00, or signing a Promissory Note with a down payment effectively paid equal or superior to €500.000,00.
In this case the applicant must complete the purchase of the real estate before the renewal of the residence permit.
The applicant may also:
a) Acquire the property in co-ownership, if the share of each co-owner is valued at €500.000,00 or more.
b) Mortgage the property on that part of the value above the qualified investment. For example the applicant may proceed with a mortgage of € 400.000,00 if the property costs €1.000.000,00 (=€1.000.000,00-€400.000,00=€600.000,00>€500.000,00).
c) The applicant may rent the Real Estate to explore it commercially, for tourism, or for agriculture.
Proof is made by presenting:
a) An up to date Land Registry Certificate with the Registered Ownership or Promise of Ownership (as applicable) of the applicant;
b) The Public Deed or Promissory Note (as applicable), attesting the purchase or Promise of Purchase (as applicable) of the real estate;
c) The declaration of a financial institution attesting the transfer of a value equal or superior to €500.000,00;
d) If the investment is through a company and not in the applicant’s name, an up to date commercial registration certificate declaring the applicant’s holding stake in the company is also necessary. In this case the applicant’s holding stake will be valued at the amount of the investment.
This information was provided by Dr Vasco Ramires Fernandes, a Lawyer, with an office in Faro. It is provided as a summary for general distribution to clients and the information contained herein should not be used to make decisions as up-to-date legal advice is vital for specific cases.