Portugal Remains an Alluring Country for Foreign Investors Even Without Golden Visa

Summary

• Portugal aims to redirect half of the foreign investment traditionally allocated to real estate towards commercial enterprises through the OIC, potentially injecting €5 billion into the country over the next decade.
• This shift is seen as significant, given recent changes made by authorities in response to the housing crisis.
• Portugal previously removed the real estate investment option from the Residency by Investment scheme.

If Portugal manages to succeed in diverting half of the foreign investment that has been allocated to real estate in the past few years towards investments in commercial enterprises via OIC, an estimated €5 billion will be infused into Portugal over the next decade, according to a report from the Portugal News.

This would bring significant contributions to the country, taking into account the recent changes made by authorities in this country.

The Residency by Investment scheme of Portugal enables foreigners to acquire residency in this country by making financial investments and meeting some other conditions. Nevertheless, recently, the country has been struggling with the housing crisis, thus applying some changes to this program.

Among them was abolishing the real estate investment option from this program, which allowed internationals to make an investment of €280,000 or more. The decision came following the approval of the “More Housing” bill by the President of Portugal, Marcelo Rebelo de Sousa.

Last month, the government of Portugal announced the closure of the Non-Habitual Resident tax regime, which allows internationals to benefit from reduced tax rates on income for a period of ten years.

Announced by Portugal’s Prime Minister, Antonio Costa, the decision came as part of efforts to manage the housing crisis.

In 2024, special taxation for non-habitual residents will end. Whoever has it will keep it.

Antonio Costa

The law under discussion provides for a transitional provision under which the regime will continue to be applicable under the terms to all applicants who, on January 1, are already registered as NHR before the Tax Authority and, on December 31, meet the conditions for registration as NHR or hold a valid residence visa on December 31, this year.

However, the acquisition of shares in non-real estate Collective Investment Organizations (OIC), valid for a period of five years, is still effective, and at least 60 per cent of the value of the investments is made in commercial companies based in Portugal.

Such investments differ from the real estate investment after contributing directly to the country’s economy.

In addition, based on the current legal regime, in addition to the possibility of access through the Golden Visa Program, investment in OIC is one of the most active options from a tax and financial return perspective.

Portugal is among the most famous European destinations when it comes to the Golden Visa Program. In August alone, the scheme brought to Portugal a total of €32.2 million.