Portugal is considering abolishing its popular Golden Visa scheme, because it seems to have already ... [+]
Although Portugal’s Residency by Investment Program (RIP), or Golden Visa, is one of those most sought by wealthy foreigners, it’s nearing its termination, according to the country’s government.
Portugal’s Prime Minister, Antonio Costa, said this week that the country is considering abolishing its popular but much-criticized 10-year-old Golden Visa scheme because it seems to have fulfilled its function.
“There are programs that we are currently re-evaluating and one of them is the gold visa which, probably, has already fulfilled the function it had to fulfil and which, at this moment, it is no longer justified to maintain,” the Prime Minister said.
The government recently introduced new, stricter requirements intended to control the influx of applications, including raising to €500,000 the minimum investment in properties and limiting the areas of the country where such investments are permitted. Yet, those measures apparently aren’t sufficient.
“Until now, Portugal Golden Visa is a residence visa issued to non-European Union nationals who have made a significant investment in Portugal, such as purchasing real estate, making a capital investment, or creating employment opportunities,” SchengenVisaInfo.com reports.
“It is a fast-track process for obtaining permanent residence and citizenship in an E.U. country. Via the Golden Visa, you can become eligible for Portuguese citizenship in as little as five years.”
A view of the historical city-center of Lisbon, Portugal
Portugal, along with other European countries that still offer the “Authorisation of Residence for Investment Activity” for people from non-European countries, have been repeatedly chastised by the European Commission, which has called for an end of such national schemes that have been used for illegal activities — mainly money laundering.
These schemes require minimal or no physical presence in the country and offer a fast-track to residency or citizenship compared with the obstacles of seeking international protection, legal migration or naturalization through conventional channels.
Once granted, the beneficiaries of the Golden Visas immediately start enjoying freedom of movement within the Schengen area.
The citizenship and residence-by-investment schemes have been in the international spotlight for some time now, with growing calls to ban such practices altogether. The pressure has mounted as countries have announced the suspension of their Golden Visas and passport schemes for Russian nationals.
“Even though Portugal’s Golden Visa Program has significantly contributed to the country’s economic sector, it has often been criticized for being involved in many unlawful affairs,” Schengenvisa reports.
Within Portugal, it has also been heavily censured for triggering rising house prices and rents, especially in Lisbon, the capital, and in the most popular areas of the country.
Currently, after this year’s reforms to redirect investments from red-hot property markets in big cities to depopulated areas, it’s no longer possible within the Golden Visa scheme to buy in Lisbon, Porto, the Algarve and surrounding areas on the coast.
According to figures from the Portuguese Immigration and Border Service (SEF), the number of Golden Visas more than doubled in September this year compared to the same period last year.
The number of Americans interested in Portugal’s Golden Visa program was close to surpassing the number of applications filed under the same program by wealthy Chinese citizens.
The Portuguese Foreigners and Border Service (SEF) disclosed in July that investments through Portugal’s Golden Visa program had increased to more than €78 million, more than doubled the €36 million recorded during the same month of 2021.
In total, the scheme has attracted more than €6.5 billion in investment by foreigners, mainly from China, Brazil, South Africa and the U.S., with the bulk of the money used to buy real estate.
The city of Porto in Portugal reflected in the Douro River.
Along with the Golden Visa, several other visa schemes offered by Portugal are currently being re-evaluated, according to Prime Minister Costa, who also emphasized that Portugal wants to continue to be attractive to foreign investors and cited as an example the recently enacted Digital Nomads Visa that permits remote workers with high monthly incomes to live and work in Portugal.
Portugal’s move seems to be a response to a new drive by the European Parliament to shrink and regulate the multi-billion-euro citizenship and visa industries, which the E.U. has long considered a security risk.
The European Parliament's Civil Liberties Committee has called the schemes “objectionable from an ethical, legal and economic point of view.”
“The bar for what counts as an investment has been too low for too long,” a Parliament report complains. “E.U. residency should only be awarded to people who are investing in the real economy and who can be trusted to be legitimate investors without criminal backgrounds.”
More recently, since the war in Ukraine, the E.U.’s demand has taken a more urgent tone to suspend the sale of visas to Russians and Belarusians. “It comes amid concerns that people hit by European Union sanctions over Russia's invasion of Ukraine may be holders of E.U. golden visas or passports,” according to Reuters.
"Some Russian or Belarusian nationals who are subject to sanctions or are significantly supporting the war in Ukraine might have acquired E.U. citizenship or privileged access to the E.U., including to travel freely in the Schengen area, under these schemes," the European Commission said.
It has also recommended that governments check whether sanctioned individuals were holding golden passports they have issued.
Malta, Cyprus and Bulgaria, which also run Golden Visa schemes, have committed to ending them.