La Vida Golden Visa vs Mercan Group

[blockjane (J)]

Hey @tkrunning, you seem some what well versed in Mercan’s structure.

I find myself questioning some of the projects being offered.

How will a newly built hotel in Lagos, Algarve qualify for the min. 280k euro commercial investment? It doesn’t appear to be in rehabilitation zone (could be wrong) but the location is definitely not low density.

The capital investment from investor is made via debt/Promissory Note - so it doesn’t fall under fund or commercial property. I’m concluding investor won’t meet GV eligibility requirements. Happy to be proven wrong but I can’t find a corresponding CVMV number and doesn’t appear like a transfer of deed/part deed takes place.

[tkrunning (Thomas K. Running)]

Hi @blockjane,

I would recommend starting with our Golden Visa eligibility checker:

Portugal Golden Visa property area search (low-density, interior)

Looking up Lagos you get this:

@blockjane

the location is definitely not low density

Actually, it is. Density is determined at the NUTS 3 level, meaning Algarve as a whole, not Lagos. Our tool gives this explanation for Lagos:

@blockjane

How will a newly built hotel in Lagos, Algarve qualify for the min. 280k euro commercial investment? It doesn’t appear to be in rehabilitation zone (could be wrong)

You are right that it’s not in a so-called “ARU” (as far as I can tell using the map you find using our tool), however that’s just one path to qualify as a rehabilitation project. Refurbishment of a building that’s more than 30 years old also qualify, even if it’s outside an ARU.

What exactly qualifies as a rehabilitation project under the GV is determined by the local municipality, and the exact requirements tend to vary from municipality to municipality.

My understanding is that in the case of Lagos there was a requirement that the original building on the plot would remain. In case of the Mercan Lagos Marina project there is an old building on the property that will be refurbished and used as the reception area for the hotel.

Any serious developer (including Mercan) offering a project like this obviously gets this approval prior to starting development and offering it in the market. Mercan is also taking the risk of GV refusal as they refund any investor that’s denied their visa, meaning it’s in their interest to have all their ducks in a row in this regard.

There’s also a separate determination made by the tax authorities regarding whether the project qualifies for the rehabilitation tax benefits (there are potential significant tax savings), which is a longer process and the tax authorities may operate with stricter requirements than the local municipality. So this determination may not have been made prior to a project being offered to investors. But it’s also not relevant for the granting of the GV.

@blockjane

The capital investment from investor is made via debt/Promissory Note - so it doesn’t fall under fund or commercial property. I’m concluding investor won’t meet GV eligibility requirements. Happy to be proven wrong but I can’t find a corresponding CVMV number and doesn’t appear like a transfer of deed/part deed takes place.

I’m not sure where you have this information from. There are deeds issued to all investors, and you own a percentage of the overall property (not individual rooms, etc). There may be a promissory note involved up front (it’s just a contract that obliges both parties to go through with the transaction), that I’m not familiar with in this case, but it’s common practice for real estate transactions in Portugal. That doesn’t mean you won’t get a deed once the sale has been approved by the authorities.

CMVM registration isn’t relevant here since this is a direct real estate investment, not an investment fund.

Hope this helps clarify things!

[blockjane (J)]

Thanks! Really appreciate the thorough answer.

Any serious developer (including Mercan) offering a project like this obviously gets this approval prior to starting development and offering it in the market. Mercan is also taking the risk of GV refusal as they refund any investor that’s denied their visa, meaning it’s in their interest to have all their ducks in a row in this regard.

Again, I haven’t seen the investment/subscription documents but I when I do I will make sure that the return of capital contingency is in there before signing. I’ve heard other horror stories of funds claiming to be GV eligible and are actually not and investor’s funds just end of being stuck for the entire term.

[Lonsin (John Tan)]

Just starting my GV application process through Mercan and probably investing in a hotel project. Any advise you have or things to watch out for would be greatly appreciated. Trying to get my application in before things really change but from my conversations with Mercan, it seems nothing is changing yet? Portuguese President Calls Housing Bill "Unfeasible", Indicates It is Unlikely to Go Through - IMI - Investment Migration Insider

[kent.bklim (Kent)]

My application is submitted early March, I invested in open-ended fund IMGA, the risk in minimum since I can divest anytime if the law passed with retroactivity effect (application made after 16th Feb is not eligible). My suggestion to you is read carefully your agreement with Mercan, will they refund you the investment if your application cannot go through? If not, don’t take the risk.

You might want to check out latest news here: Portugal Golden Visa - The New Law of 2023 - #441 by tommigun

[Lonsin (John Tan)]

Yeah, Mercan said the investment would be refunded if the GV application is retrospectively cancelled by the government based on the advise from IAS, the legal firm they are using for GV applicants. I understand this is just the risk I have to take but going through the various forums and posts, most people seem to be happy with Mercan and the investment projects they advertise?

[fkav (Frank)]

What project did you choose? Porto, Lisbon, or the Comporta hotel?

[AH88 (AH)]

Hey, John! I’m in the process of investing with Mercan as well. The Oceanview hotel. They’ve been overall good. The only hold up/negative thing I would mention is the NIF and bank account taking longer than I expected/was told. They seem optimistic about people still being to submit their applications for the time being without any issues of retroactivity. There’s a group for Mercan clients here:

https://nomadgate.com/mercan-investor-group/

Most of the members are already in the system and waiting for biometrics and renewals but some of us are newbies. The topics cover almost everything and there’s a timeline.

Good luck!

AH

[fkav (Frank)]

Trying to set up a transaction with Mercan. Specifically in Lisbon Project. Interested in knowing anyone’s experience with them.

[Lonsin (John Tan)]

Thank you. I literally just started with Mercan and paid the initial deposit fee. Am going with the downtown Lisbon hotel property. Have also applied to join the group for mercan investors and am waiting for approval. Thanks!

[andrea.delaflorm (andreadelaflor)]

HI Melanie, Did you hire a third party lawyer?

[marthaivester]

Hi mtrom, could you also share the list of lawyers with me? Also if you have any Intel on LaVida I’d appreciate it. Thanks

[lunarwoods (K)]

hi @mtrom , can I also get the lawyers list please? I just found this group while doing more research on Portugal

[va.trade23 (JohnS)]

@marthaivester think of La Vida as a promoter / intermediary. When I was researching my investment in early 2022, I got in contact with La Vida first. It just so happened that their head office is two miles away from where I live in London. I did some due diligence on them by visiting their offices (which were empty pretty much as almost everyone was working from home at the time), and they went on to put me in touch with Mercan and IAS (a law firm you’ll see mentioned here often).

They were promoting one Mercan’s hotel investments (in Lagos I remember) back then. Apart from Portugal, they promote other citizenship by investment programs as well.

As others have pointed out, there isn’t huge a value-add that they provide per se - you can engage with Mercan (or other developers) directly if you wish. The developer obviously pays La Vida a cut from your investment.

In the end, La Vida’s digital marketing teams probably invest heavily in common search terms for the Portuguese Golden Visa program, and often searching for ‘Nomadgate’ brings La Vida as one of the prominent search results on Google, and hence eyeballs/web traffic to them.

[marthaivester]

Thanks so much … We ended up still going with LaVida as the intermediary since the time is super short and i figured the small extra $ might pay off if i need escalation/response … Glad to know that your due diligence aligns with mine. So far so good , although i did request (successfully) to have more robust data privacy language added to the contract with IAS, fwiw.

[va.trade23 (JohnS)]

To be honest, I found that things were slower with La Vida in the picture, as the La Vida representative insisted on being part of every conversation I needed with Mercan and especially the lawyers. It is important to remember that the one person on this GV journey that is the most important is your lawyer - you must like their style and pace of working.

Once you’ve invested, there will be little need to engage with La Vida again. Your lawyer however will be part of your journey till your second renewal, which if you are considering applying will mean collaborating with them for the next 7+ years.

[KevinLondon (Kevin Lasitz)]

Is there any cost difference between La Vida and Mercan direct? I received a cost spreadsheet from both today and they are the exact same spreadsheets and costs. They both propose IAS for the legal firm. I had a very good long conversation with La Vida (who I had found right after Brexit) and he was really informative and extremely quick and responsive on my initial request for information and subsequent emails and WhatsApp messages with questions. I am in London as is La Vida, which is good for time zone and ability to meet if needed. I am waiting to schedule time with Mercan and have asked them if there is a difference going direct with them. I am considering the Ponte do Vau hotel in Portimao and keen to decide quickly before the program ends, assuming it will as early as July. Anyone get a better offer with Mercan direct and was it significantly lower? Thanks!

[adityar]

Hello,

I’m considering Mercan and this is going to sound extremely paranoid - How do I know the person i’ve been emailing with is from Mercan? LinkedIn checks out but domain name doesn’t. Can someone let me know the email domain name used by Portugal employees of Mercan?

Thanks,
Aditya

[AH88 (AH)]

Hello! The people I interacted with in Mercan had @mercan.pt and IAS (their affiliated law firm), @iaservices.pt

Hope this helps!

[tkrunning (Thomas K. Running)]

They may also be using other domain names such as @mercan.com and @mercanproperties.pt. Feel free to DM me the email of the person you’re in touch with and I can check up on it.