Investor Immigrants in Portugal Get Increasingly Interested in Fund Investment
Since the launch of the Portuguese Residency by Investment Programme (RIP) in 2012, it’s been recognised as one of the most demanded immigration routes due to its simplicity and moderate requirements. The investment options under the programme include real estate, capital investment, entrepreneurship and private equity. Apparently, property acquisition remains the most coveted scenario, yet it looks like private equity funds have been gaining popularity as well.
After all, it’s not only about the characteristics of purchased property, it’s about taxation, hidden costs and exit strategies. Investors have become more sophisticated and many of them would be happy to avoid long-term engagements associated with real estate. Hence the interest towards the financial options.
In Portugal, investors may choose from a multitude of private equity and venture capital funds registered by the local regulator “Comissão do Mercado de Valores Mobiliários” (CMVM). The qualifying investment is EUR 350,000.
The mentioned funds come with a fixed ROI so, unlike in property management, investors can accurately forecast their gains. Qualified tax investments do not entail any tax on initial transactions and come with a tax exemption on the ROIs. Real estate, on the other hand, sets the investor back with title transfer fees, stamp duties and other applicable costs.
The funds exit strategy is also very straightforward. When the time comes to liquefy, the fund management body simply transfers the money to the investor’s account. Whereas with property, things may get more complicated.
Portugal employs the fund investment scenario to channel revenues into projects and developments, boost job creation and improve the infrastructure in a plethora of areas outside of the property market.
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