Portugal Launches Investigation into Golden Visa Funds Offering 'Guaranteed Buyback'
Key Takeaways
1. Portugal has initiated an investigation into the market practices of several venture capital funds following concerns raised by Golden Visa applicants.
2. The probe was triggered by complaints from local legal professionals with connections to the sector.
3. Some of these Golden Visa funds are offering investors a “guaranteed buyback agreement.”
Portugal has launched an investigation into the activities of several venture capital funds, driven by Golden Visa applicants from regions like North Asia, Southeast Asia, and the Middle East. This move follows complaints from local lawyers closely involved in the sector.
According to reports from *The Portugal News*, certain Golden Visa funds under scrutiny have been offering investors a "guaranteed buyback agreement." This agreement ensures that visa applicants will receive a full refund of their invested capital upon the fund's maturity, alongside gaining permanent residency.
A "buyback agreement" is a contract where the seller agrees to repurchase the property or asset at a predetermined price if specific conditions are met within a given timeframe. Such contracts are often used in real estate, allowing homeowners to buy back the property after a few years at an agreed-upon price.
However, questions have arisen about the legality of these buyback agreements being offered by fund managers or third parties. The regulations surrounding such agreements, as well as the actions of entities promoting them, are central to the ongoing debate.
One Year After Changes to the Golden Visa Program
In October last year, Portugal’s President Marcelo Rebelo de Sousa signed the "More Housing" bill into law, amending the Golden Visa Program to address the country's housing crisis. One of the significant changes was the removal of real estate investment options from the Residency by Investment scheme, previously the most popular route, which allowed foreign investors to contribute €280,000 or more. However, other investment options under the program remain available.
Surge in Golden Visa Applications in 2023
Despite concerns surrounding the Golden Visa Program's involvement in irregular activities, interest from foreign investors remains strong. An analysis by the Agency for Integration, Migration, and Asylum (AIMA) revealed a significant increase in Golden Visa applications, driven largely by American demand.
In 2023, family applications for the Golden Visa program surged, reaching 2,901 compared to 1,588 in 2022. Similarly, individual Golden Visa investors grew in number from 1,281 to 1,554 during the same period.