Initially very popular with non-American investors, the Portuguese Golden Visa application pool now includes more US investors by the day, and it is a trend that seems to continue growing.
The Portuguese residency by investment program provides US and global HNWIs a mechanism through which they can gain access to the country and, in turn, the EU.
So, why is Portugal becoming one of the most sought-after residency investment programs for US HNWIs?
The Portuguese Golden Visa
The Portuguese government introduced the Golden Visa in 2012 to alleviate the lingering effects of the 2008-2009 financial crisis. The Golden Visa has proven itself year after year, awarding over 30,000 investors Portuguese residency since its establishment.
The program’s premise is quite simple: those who have a clean criminal record and make a qualified investment into Portugal’s economy through an eligible investment channel can obtain residency.
Golden Visas are two-year, temporary residence permits renewable indefinitely – in 2-year spans – as long as the investor maintains their investment, spends seven days a year in Portugal, and abides by all relevant laws.
One of the Golden Visa’s main draws is its simplified route toward naturalization.
Investors who maintain the physical residence requirement of just seven days a year for five years can apply for permanent residence and citizenship, making the Golden Visa one of the most accessible routes to obtaining EU citizenship.
The program also has a host of eligible investment categories, hence catering to a wide array of investors. Those who wish to pursue passive investments have options, while others who aim to obtain a Golden Visa through active ventures also have choices.
Portugal’s Golden Visa Updated For 2023
The Portuguese Golden Visa endured a tumultuous year in 2023. The Government’s Mais Habitação (More Housing) Bill’s initial form would have ended the program entirely.
The bill was proposed in February, after which it was sent to the Portuguese Parliament, which opened the floor to public hearings on the matter.
The More Housing Bill is a massive amendment to the law that encompasses various areas and issues to curb the housing inflation crisis in Portugal. Still, the public outcry against the closure of the Golden Visa was deafening. In the end, Parliament decided to keep the program but slashed any ties it had with real estate investments.
Parliament passed the updated version of the Golden Visa to the President, who would veto it and request amendments (none that had any to do with the residency elements), finally approving it in October and cementing it as law.
That chaotic course of events took about eight months, during which the fate of the Golden Visa remained up in the air. The program was still open to applications, and its impending (anticipated) closure drove more investors to apply.
Now, 2023 is on course to be a record year for the Golden Visa as it is on pace to approve more applications in one calendar year than it ever has during its existence – primarily due to the demand it is garnering in the US.
US nationals now make up the third largest nationality of applicants (6%), behind Chinese (43%) and Brazilian (10%) HNWIs. If the demand within the US continues to grow, the US could easily leapfrog into second place.
In the first three quarters of 2023, approvals of American applicants already surpassed last year’s record high, and since the influx of American Golden Visa applicants began in 2019, the annual number of applications has had a Compound Average Growth Rate (CAGR) of 30%.
US HNWIs now make up 21% of all of Portugal’s Golden Visa applications. Considering that the American rush began just four years ago, this constitutes a massive growth in demand.
Correspondingly, the American expat community is also rapidly growing in Portugal. The last estimates put the number of Americans living in Portugal at 10,000 strong, making it one of the more significant expat communities in the EU country.
The demand for Portugal’s Golden Visa within the US – and globally – is expected to remain strong, even if the program has severed all ties with any real estate-linked investment options.
The remaining investment categories are still highly attractive, and it is crucial to understand the difference between them before choosing which one to apply under.
The five investment options for Portugal’s Golden Visa
The recent amendment to the program leaves investors with five different investment channels, which are:
- A €500,000 investment in mutual investment funds with a holding period of five years, the firm or fund does not invest directly or indirectly in real estate projects, and allocates at least 60% of their investment capital into Portuguese companies
- A €500,000 investment into a new or established Portuguese company that will create at least five permanent jobs
- A transfer of €500,000 to support research activities within the country
- A transfer of €250,000 to support cultural and artistic activities
- The creation of 10 permanent jobs
How US HNWIs can best leverage Portugal’s investment options
US investors have an advantage when it comes to passive investments. It is a matter that comes naturally to them as mutual investment funds, arts and culture investments, and science and research ventures are much more common in the US than in the rest of the world.
They can use their experience and insight to evaluate an investment that resonates with their personal goals and budget.
Portugal offers a plethora of investment opportunities that US investors can utilize.
The film company Doro, for example, has various film projects that require an influx of cash, and using the Golden Visa, US investors can choose a project they feel passionate about and invest in movies in Portugal.
Many investment funds tend to target a mix of assets. Still, for more socially conscious investors, some funds, such as the Sustainable Innovation Fund, which is audited by KMPG, offer a more ESG-focused approach and emphasize sustainability.
The Container Fund puts all of its investments into technology, so those looking to invest in the ICT sector while simultaneously getting an EU residence permit can do both with one investment.
The possibilities are endless, and each investor can find the project that aligns with their budget, compliance criteria, social impact, goals, and overall needs.
To understand the investment categories a bit more, let’s go into some detail.
The job creation option is very straightforward and one of the best ways for American – as well as global – HNWI investors to leverage Portugal’s Golden Visa investment in the best interest of all parties.
This investment category provides two options:
- Investing €500,000 into a company and creating five permanent jobs
- The creation of 10 permanent jobs
There is one crucial factor to consider within this investment category – the investor does not need to create the jobs themself; instead, their investment has to do that.
Investors can establish their own company or invest into an existing Portuguese company that uses that amount (or part of it) to create the required number of jobs on behalf of the investor.
This is an excellent option for those who want to expand their business into the EU. Since creating jobs is the natural progression of any successful business, it is a win-win situation for American entrepreneurs looking to leverage and capitalize on one of the world’s most dynamic and open markets.
It is also cost-effective, as operating and overhead costs in Portugal are much lower than in the US. For example, the average office rental price per square meter in New York is $610, while in Lisbon, it is about $29.
The cost savings are a great driver for attracting foreign business. Couple that with the EU market, and it is a match made in heaven for American entrepreneurs looking to obtain a Golden Visa.
But this is also a socially responsible investment option, as it directly affects the investor’s community. Portugal has been dealing with a troublesome unemployment rate since COVID – approximately 5.8%, much higher than the US average of 3.8%.
This is an excellent option for all HNWI investors who genuinely want the Portuguese communities to be positively impacted by their investment – as well as make an immediate contribution directly into the investor’s new home.
A way to invest in research – be it climate-focused, ESG-oriented, or even a medical discovery this funding channel is an excellent choice for HNWI investors who genuinely want to make a difference in the world.
Investors are free to choose the research subject, firm, and methodological approach they prefer throughout the open market of Portugal as long as the research entity can provide thorough documentation that evidences how the investor’s money will be used.
Education institutes, laboratories, tech start-ups, PPPs, and other entities can provide investment avenues; all investors need to do to qualify for the Golden Visa is choose the one they prefer and make the donation.
This route is a simplified one-and-done investment – a singular investment with no follow-up. If structured correctly, this option can also lead to tax relief, but that depends on the investor’s nationality and the taxation laws (and treaties) of their country of origin.
Cultural and arts donation
HNWI investors passionate about the arts can opt for this investment option. Whether their love is film, paintings, music, or otherwise, the cultural and arts donation option was explicitly crafted for their, and the art world’s, benefit.
This is also the most affordable option, with a required minimum of €250,000, giving it the lowest investment threshold within the Golden Visa program.
Investors do not have to settle for just getting the Golden Visa either; their investment can support an artistic venture of their choosing, and they can obtain recognition.
For example, an investment of this amount can earn them the title of contributing producer on a film – an excellent bonus for true fans of the arts.
Much like the scientific research option, this investment may be written off on a person’s taxes – if structured correctly.
However, in cases where the investor could recoup their investment after the holding period (which could be possible), the investment would not count as a donation – so investors have to consider this matter first.
The newest investment option is also expected to be the most popular option – considering it made up nearly a third of all Golden Visa approvals in 2023.
The demand for investment funds aligns with the growing appeal to US HNWIs. Golden Visa applications under the fund option had a Compound Average Growth Rate (CAGR) of 118% between 2019 and 2023.
Investors can choose any fund they want, providing the fund meets the following criteria:
- The fund has no connection to any real estate assets
- The fund invests at least 60% of its capital into local Portuguese companies
- The fund is regulated by the CMVM
- The required minimum investment amount is €500,000
- The investment is held for a minimum of five years
There are a plethora of funds for investors to choose from, allowing American HNWIs to choose a fund that matches their ROI, risk, and asset preferences.
Portuguese fund management companies are also well aware of the Passive Foreign Income Corporation (PFIC) taxation that concerns Americans and their associated tax burdens, making the entire investment process much smoother.
American investors are free to choose funds that have a mixed asset portfolio, focus on healthcare, invest in technology, prioritize ESG funding, or otherwise.
The nature of mutual investment funds in Portugal’s growing open market makes this option one of the most flexible and potentially profitable under the Golden Visa.
Additional advantages to Portuguese residency
There are a multitude of additional advantages to obtaining a Portuguese residency, such as:
- EU Access – Unrestricted access to the EU as a resident, with future ETIAS exemption status, makes this an excellent Plan B for Americans.
- Minimal Physical Residence – Golden Visa holders must only live seven days a year in Portugal to maintain their status and qualify for naturalization.
- High–Quality Education – Portugal offers top-tier education at various institutions throughout the country, which comes at a fraction of the cost in the US.
- First Class Healthcare – Portugal boasts one of the best healthcare systems in the world, and state-provided healthcare is entirely free, while private healthcare and insurance are extremely affordable.
- Luxury Lifestyle – From the bustling markets in Lisbon to the stunning views atop Porto, Portugal offers a unique lifestyle that is laid back and luxurious, making it one of the EU’s best second homes as well as an excellent tourism destination.
- Crypto-Haven – While many countries frown upon cryptocurrency, Portugal has embraced crypto and crypto-trading. The government regulations are favorable, making it an ideal choice for HNW cryptocurrency investors.
- Non-Habitual Residency Tax (NHR) – Portugal offers a special tax regime for new residents – the NHR – which limits their income tax to a ceiling of 20% and offers other enticing tax exemptions.
NOTE: Following the official release of the updated Golden Visa, Portugal announced the eventual termination of the NHR program. Any HNWI interested in the NHR has little time to act and should schedule a free consultation with Astons’ Portugal Office.
Why now is the perfect time to Trust Astons
Portugal’s Golden Visa offers American HNW investors a streamlined opportunity to obtain an EU residence permit through an investment that resonates with their objectives, budget, and needs.
As geopolitical tensions grow throughout the globe, the need for a robust contingency plan has never been higher, and Portugal offers just that.
And simply because Portugal has updated their Golden Visa program does not mean they cannot update it further. Citizenship by investment programs, as well as Golden Visas, have experienced a very chaotic 2023.
Several governments announced numerous changes to their program criteria, including increases to the required minimum investments – typically doubling them. And a domino effect is starting to take shape.
Every sophisticated investor knows timing is one of the most critical factors in every investment decision – if Portugal updates again, only two possibilities exist:
- Program termination
- Minimum investment increases
From its inception, Portugal’s Golden Visa has been among the most coveted EU programs and Plan B options around. While the program has been saved, it could only be a temporary reprieve.
Schedule a Free Comprehensive Consultation with Susanna, our expert in Portugal. Our team analyze the wants, goals, needs, and demands of every client and provide them with a list of options that best suit them.
Frequently Asked Questions
It depends upon your nationality – but soon all non-EU citizens or EU residents will need pre-approval prior to entering the European Union.
For short-terms stays [up to 90-days], most nationalities do not need a visa to visit Portugal – including the US, UK, Australia, Canada, and New Zealand.
However, prior to the end of 2025, the EU will be launching ETIAS, its new eVisa system, and all non-EU citizens and legal residents will require pre-approval in order to enter any EU country.
The Portugal Golden Visa will provide an exemption to the ETIAS requirement.
No, the Portugal residency by investment program does have some physical presence requirements, but they are very minimal.
While investors of the Golden Visa program are not required to live in Portugal, they are required to physically spend at least seven  days in Portugal in the first year they acquire residency, and then 14 days every year after that in order to maintain residency.
While living in Portugal full-time is not required, any Golden Visa investor can do so if they wish without any additional requirements or paperwork.
Yes, Portugal has a relatively open and straightforward real estate system and regulatory process.
Foreigners can invest in real estate without any restrictions, and the property can be used as the investor’s own home, vacation home, or as a rental for generating passive income.
However, real estate investment is not an option for the Portugal Golden Visa and simply by investing in property – alone – an investor will not automatically acquire residency or the right to live in the property beyond the standard 90-day entry rules.
Yes – it can, but it is not guaranteed.
Once a Golden Visa investor satisfies a few additional requirements – specifically holding residency for a minimum of 5 years – then the investor can become eligible for Portuguese citizenship.
However, it is important to note that the citizenship possibility is completely and entirely separate and distinct from the Portugal Golden Visa – it is not an element of the program in any way.
Simply, Golden Visa investors may be able to benefit from their initial residency investment – after time – by becoming eligible for citizenship and thus a Portugal/EU passport.
The main investor can add an unlimited number of eligible applicants to a single residency by investment application.
The main investor must – of course – be over the age of 18 and they can add their spouse, the parents of the main investor, and all of the main investor’s children who are under the age of 18.
In order for additional applicants to qualify as eligible, they must meet all the criteria and not simply the relationship and age components – which can be found on our Portugal Golden Visa page.