I am hoping to get some feedback from the community on the €250,000 arts donation route. We are considering this route to finance our next documentary and I have only seen it mentioned successfully by one person on the forum.
My thoughts are with the longer holding time (~9 years due to the backlog), raised investment levels, higher interest rates, and elimination of the property option that this may be viable due to the increased opportunity cost of the extra €250,000 euros investment you would not need to make in the funds route.
I have confirmed with the lawyer that it is a donation: We cannot pay you back any returns.
Pros:
No additional home country tax filings (PFIC, FBAR, ect.) You may have requirements during at least year 1 due to funds possibly needing to be processed through a Portuguese Bank account to establish ownership. Depending on country you may have requirements thereafter.
No Portuguese tax return filing
Simplicity - Donate and done, no lockup of funds for uncertain length
Cheapest route to an European Golden Visa that leads to citizenship
You know the risk/reward (funds may gain or lose value)
Cons:
Donation
Long lead time to permanent residency or citizenship (like other GV routes in Portugal)
Thanks to Thomas for letting me solicit feedback. I am currently a GV holder approaching my first renewal, so I know that side of things, but I am trying to engineer it from the other side and see what others may think in this changed landscape. If I get a positive response we will consider becoming certified (no idea how long that takes) and proceeding with the project.
Is this a viable option for you?
Is there anything you may be looking for from your donation (besides Executive Producer credit) we might be able to work with you on?
I would caution that the assertion that there are no home country tax filings. This may or may not be accurate. OECD countries are becoming more strict in money transfers. In addition, AIMA may want proof that the funds first hit a Portuguese bank in the GV applicant’s name to establish ownership of the funds being donated.
Does the 20% low density area discount still apply to arts donations? If so I imagine many people would rather donate 200k than 250k. If they’re doing it for the visa and there is no profit to be made, there’s no reason to stick to high density areas.
That’s true. I’m seeing mixed info on the low density discount and also a competing website that says the donation can be treated as an investment. I’ve reached out to them for clarification.
If we can pay back a portion of the profit then it would make more sense to stay in a high density area. If we cannot, we need to carefully consider how much we can do in low density areas. A certain amount of filming and post production will be possible, but I’m sure some of the services we will need (coloring, audio, legal) may only be possible in Lisbon/Porto. Maybe we can pay from non GV funding for high density area services, but thats a question I now know to ask.
You need to find an approved project, or work with the artist to get it approved. So it isnt as simple as buying a rural house / giving any smalltime filmmaker 200k.
I donated to an art museum. Would not do it again given that PT is not living up to its end of the deal. Of course, I wouldnt apply for the PT GV at all now, either.
We would move to get the project certified and manage it ourselves. I would move to Portugal to supervise production as a current GV holder. This is an industry where we are used to chasing tax credits and we have produced projects in France, Canada, Ireland and the U.S.
As you stated the current lead times, while helping an opportunity cost argument in favor of the smaller Arts donation over an investment, drastically lowers the appeal of the GV in all methods.
If this forum, as a very pro second citizenship audience, does not have a favorable opinion of the Arts donation route then we know it is not worth pursuing certification and producing in Portugal. This post was more to take the temperature of the forum for market research on this method before we paid lawyers.
I think this forum generally is frustrated generally at the pace of approvals of the GV applications. There is very little information and participants that are taking the arts donation route. All else being equal, most on this forum would rather break even or make money on their GV application investments rather than just give it away. Even if it’s possible to make money on the arts donation route, it’s more high risk for those here who are mostly not art experts.