About 4 months ago, I did a post about why I chose Optimize. How fast things change! Since I’m cashing out of my Optimize account and ending my GV process, I thought I would do a follow-up.
Under the new rules, Portugal is selling a vastly worse product for a lot more money. On balance, it did not seem worth it to me. I’m now starting a process in a different European country.
I’m not willing to commit the kind of money now required for the possibility of citizenship, if rules do not change again, after 15 years. I feel that I entered into a contract with a counterpart named Portugal. In the meantime, my counterpart decided he would no longer abide by the terms of our contract. I can now either sue him, accept the new terms or walk away. I chose the latter.
Given that I no longer trust my counterpart, I no longer have faith he will uphold his end of the bargain, even with the less advantageous terms. That is, I don’t know when he will invent additional new fees or, for instance, decide that I don’t qualify for citizenship after 15 years without becoming a fulltime resident of Portugal. The trust is broken.
What makes me particularly suspicious about my counterpart (Portugal) is he will not even reveal his understanding of the current terms. For example, it now seems GV applicants will have to renew a 3rd time and 4th time for something called a Permanent GV (which actually runs 5 years). It took me some effort for me to learn that this previously unnecessary Permanent GV carries a fee of 9,270 for 1 applicant, plus 2,500 legal fees. I’ve asked if I would need to continue to visit Portugal for 7 days/year during the 2 Permanent GV periods, and no one can answer that yet. I have learned from business that it’s never a good idea to make an agreement when the terms are not transparent to all parties.
In the end, I find the somewhat remote possibility of obtaining Portuguese citizenship after 15 years is just too expensive for the current price tag. The investment options for 500k range from so-so to poor. Earlier this year, I reached the conclusion that Optimize was my best option. I’m currently paying Optimize about 7,000 euros/year in fund expenses beyond what I could get for a similar fund that invests in the same securities in my own country (1.8% versus .8%). This is a large expense of the GV - and even so, Optimize is probably one of the very best options.
Excessive fees notwithstanding, European stocks have done really well this year, so I have capital gains. I will withdraw the funds after reaching 1 year so as to take those gains as long- rather than short-term. Even though Optimize imposes higher-than-ideal fees on GV applicants, it appears to be a professional, responsive company. I do not doubt that I can get my funds returned within a week.
Everyone’s circumstances are different. While it makes sense for me to cancel my application now that 5 years-to-citizenship is off the table, and skip my recently-scheduled biometrics appointment, others will see it differently. For example:
- We all have different wealth levels.
- Some are further along in the process and don’t want to walk away after years/funds already invested.
- An applicant under 45 years old would be more patient about waiting for hypothetical EUR citizenship than someone over 65.
- Someone who wants to live and work in Portugal now would likely go for the DV.
- Some investors made savvy property investments that they wish to hold onto in any event.
- Other investors are locked into fixed term investments that are difficult or impossible to unravel.
- Some of us already have have serviceable passports for worldwide mobility - others don’t.
- Countries that are now attracting attention like Hungary, Latvia and Bulgaria have shakier investment markets than Portugal, but offer much lower fees, shorter timelines and more responsive immigration offices.
Therefore, given different individual circumstances, I can’t conclude that no one in their right mind would now start a new Portugal GV application. It’s a very personal decision. However, I would guess that new applications will fall dramatically and that the undercapitalized Portuguese market will no longer benefit from the substantial influx of GV investment funds. Given the need to pull out if terms worsen further, now that many GV investors lack trust in the Portuguese Government, closed-end and fixed-term investment funds (and the high commissions they pay to advisors who loiter around chat groups) will likely disappear. Many investment advisors and immigration attorneys, who have their livelihoods wrapped up in the GV, will predictably argue the Portugal GV is still worth it - but they are now selling a Yaris rather than the previous Landcruiser - for a higher than ever price tag. Investors, especially new investors, have options.
In any event, good luck to everyone in this new era.
