Also, you may simply just not have a lot of UBTI. Iām not that familiar with the topic; youād have to have your accountant decide whether there even is any. Maybe there isnāt. I just wanted to flag it as a potential item. Thereās a $1000/yr exemption on UBTI.
Has anyone gotten a more definitive answer? This would definitely be our path to GV if available. What I am hearing so far is that we would roll our SEP IRA funds into a specifically created US LLC, open a Portuguese bank account and deposit the money from the SEP LLC, then place the bank account funds into a Portuguese LLC we open with the exact same name and lastly buy into a GV compliant fund from the LLC.
I have read that the investment option does not allow removal of the money from the investment even after the passport is obtained. It looks like a many of these funds mature in six or seven years, with a possible extension. If the fund simply matures and you get your money back from it (hopefully!), is that all that is required?
How risky are these investments? I can accept a minimal return or even a small loss but I canāt accept any significant chance of large or total loss.
I see that the GV is set to change requirements for the real estate option. Is the investment option also included in these changes?
Finally, is there a test at the end of the five years?Language or otherwise?
1 Like
Gosh thanks. As a newcomer to the board I have been reading but answers are spread out and occasionally unclear. The articles I have read so far on this topic have also not been consistent and sometimes more experienced members are nice enough to help navigate these somewhat sprawling discussions.
There probably needs to be a FAQ. But thatās a fair bit of work on someoneās part to develop, and really a lot of whatās been developed on this board on the topic has only been in the past handful of months anyway so you could argue weāre all still hashing out the answers. So really the only good answer is to keep digging.
To answer specific questions:
Risk: Itās like any other investment. Thereās many facets of risk involved:
- currency risk
- investing in a country where you donāt know the rules
- investing in funds with no track record
- investing in funds run by relatively small managers
- limited investment choices
- risk of government rule changes
- investing in very illiquid funds that you canāt get out of
- trusting that whoever it is selling you whatever product it is is telling you the whole truth, especially anyone saying thereās a guarantee - TANSTAAFL
- risk associated with the nature of the investment itself, whatever it happens to be
Only you can evaluate all of this versus your own risk tolerances. If you ask me, all of this should have big huge banners saying āBEWARE HERE THERE BE DRAGONSā but others might disagree. Itās been discussed at length in another thread under golden visa, look for āportugal GV fund comparisonā.
You get to withdraw your money after you get permanent residence from the SEF point of view, but the fundās terms may vary and weāve seen 10yr lockups.
Citizenship is NOT guaranteed. Only a permanent residence visa is relatively guaranteed. Do not conflate the two.
No one is sure on the rules for investment option changing.
There is a language test for the visa, Portuguese A2 level.
As to the specific q of IRA, someone else of that actual group who are interested in it can address that.
Also interested in the SEP IRA route if folks have come to terms with that. Willing to contribute $ to any fees associated with lining up the right professional relationships and knowledge, but prefer not to pool anything with anyone further than that to keep things simple.
Hello. Has anyone made any progress on the Portuguese side of this question. I have opened a self-directed IRA and formed a Delaware LLC to serve as my checkbook LLC. Has anyone hired an attorney in Portugal to put this plan in motion? Has anyone formed a Portuguese LLC for this purpose? Obtained a Portuguese TIN for the LLC? Opened the Portuguese LLC bank account? Has anyone considered domesticating a US LLC in Portugal for this purpose?
1 Like
Hi @nevadaandonward, I am the investment advisor for Portugal Opportunities Fund and I would be willing to chip in to do this study as well and I have a strong legal team that can provide great assistance. If youāre having one of these zoom calls again, I am happy to join also.
1 Like
@rahimlakhani Thatās exciting! Iāll PM the other folks who were on the first call and see about setting up another. The discussion has been dormant for a few weeks as far as I know.
@nevadaandonward and @rahimlakhani: I was not on the original Zoom call, but would be interested in any follow-up. Thanks!
1 Like
@rahimlakhani One of the original call participants has replied with interest in a followup call and talking points about the progress so far. If anyone has the wherewithal to pick a time and create a meeting link, I suspect that interested folks will congregate. Iāll pass along the word to other folks who may not be following the thread.
https://community.nomadgate.com/u/davidpletcher https://community.nomadgate.com/u/rahimlakhani https://community.nomadgate.com/u/jeffbaker.md Profile - beckerdg - Nomad Gate Community
Re-posting. Hello. I am willing to host. I have a reliable corporate Zoom account that I can use. Given the 8-hour time difference for participants, how about 8 am Pacific Time, 4 pm Portugal time next Tuesday, November 17?
1 Like
Iād like to attend as well. Where will the link be posted.
Thanks,
Tancha
Letās see who is interested. Hereās info for a Zoom call at 8 am Pacific Time, 4 pm Portugal time on Tuesday, November 17. I am not an expert on this subject. Iām hoping some folks who have already done some work on this subject will participate.
Meeting URL: Launch Meeting - Zoom
Meeting ID: 931 3773 4330
Passcode: 219828
Join by Telephone
US: +1 669 900 6833 or +1 253 215 8782 or +1 346 248 7799 or +1 929 205 6099 or +1 301 715 8592 or +1 312 626 6799 or 877 853 5257 (Toll Free) or 888 475 4499 (Toll Free)
Meeting ID: 931 3773 4330
Passcode: 219828
I was hoping to join the call (by phone at the very least), but I will not be able to. Sorry!
Sorry folks, I overslept. How did the meeting go?
Good evening. I opened the Zoom at 8 am. jeffbaker.md was on the Zoom. Jeff only had five minutes because he was also on another Zoom call on a different computer. He and I chatted for about five minutes. No else joined. I ended the Zoom call. No decisions made, no solutions revealed.
I would be interested in participating in any further discussions. I have been trying to meet with a Lawyer in the states (I am in Miami) but have had a very difficult time getting them to return my call. If I do meet with them, I am happy to share any information they provide.
Hi all, just joining this discussion. Thank you all for the contributions and insights offered here. Very helpful as Iām quite interested in this option of using IRA funds to set up the Portugal GV program.
Iām curious about the need for an Onshore IRA LLC. I was reading through this article which appears to state that you could just move your IRA funds to a custodian that allows for offshore transfers, then transfer the funds directly into the Offshore IRA LLC owned by the IRA. So, if you have an IRA Custodian that allows for transfers to an Offshore IRA LLC, do you still need the Onshore IRA LLC?
1 Like
I will tell you the primary challenges, as I observe them.
The Portuguese GV law appears to me to require that the applicant invest in his/her own name or through a Portuguese LDA Unipessoal (as I understand it, roughly the Portuguese equivalent of a single-member LLC) of the which the applicant is the sole member. I found the following language in Regulatory Decree No. 9/2018 of September 11, which appears to me to be relevant: ā7 ā Os investimentos previstos na alĆnea d) do artigo 3.Āŗ da Lei n.Āŗ 23/2007, de 4 de julho, na sua redaĆ§Ć£o atual, podem ser realizados individualmente ou atravĆ©s de sociedade unipessoal por quotas de que seja sĆ³cio o requerente.ā Itās my understanding that an applicant is required to provide the Portuguese LDA organizational documents with his/her GV application. If the authorities do not feel that the applicant is the sole member of the Portuguese LDA Unipessoal, the applicant may not qualify for the GV. Thatās the Portuguese side of the equation.
A US custodian of a self-directed LLC decides what it is willing to do and not do. Itās my understanding, based on limited research, that most or many custodians of self-directed IRAs will not wire money outside the United States. In addition, most or many will not act as custodians with respect to a checkbook LLC that is domiciled outside the United States. (I understand that you have found a website from a vendor who says that they can arrange such a thing. If they can, cool. I am not saying they canāt or shouldnāt.) In addition, most or many custodians will require that the custodian (not the beneficiary) be identified as the member of the checkbook LLC in the form of āXYZ Trust Company fbo IRA of John Smith #1234567ā or something similar. It is not clear to me whether the foregoing requirements adopted by custodians are required by applicable law, or not. I have no opinion on that subject. Iām just telling you my understanding. The foregoing requirements presents obstacles to using a Portuguese LLC as a checkbook LLC for a qualifying GV investment.
If you think I am wrong or if you think you can overcome these obstacles, great. I believe there are possible pathways myself. There are also risks such as (a) inability to obtain the GV (even though by the time you learn that your investment was not structured properly, you have already invested the 350K euro in a fund and probably cannot get the money back until after the fund distribution) and (b) having your investment treated as an early distribution from your IRA, in which case itās my understanding that you could be subject to tax on the distribution in the year of distribution and the penalty (which I believe is 10%). You may find attorneys or other advisers who tell you it can be done. You may find some who tell you it cannot be done. As far as I am aware, and my knowledge is limited, there is no official guidance from the Portuguese or US authorities on any pathway or solution, which means any pathway or solution has risk.
I am not a Portuguese lawyer, or a tax lawyer, or an ERISA lawyer. I have not retained a US or Portuguese lawyer to advise me on these subjects. These are personal observations. I have explained the challenges as I observe them, and perhaps my observations may save others some time. However, I am not an expert on these subjects, and no one should rely upon my observations. I am not really interested in discussing it further, because to suggest pathways or solutions could be construed as legal or investment advice, and I am not going to do that, so please donāt ask.
2 Likes
Great points hereā¦ Thanks for this