Our host, tkrunning, recently posted a list of investment funds that qualify for the Portugal Golden Visa. Some are indicated as open to US citizens while some are not. The specific reason for being open or not is unclear. What qualifies or disqualifies a fund? What question would you ask a fund manager to determine this?
Relatedly, I was curious about whether or not the Golden Monarque MPL1 fund would be open under the above criteria: http://monarquefunds.com/service/mpl1-fund/
Allowing US persons = FATCA reporting (nomadgate calls it FACTA in the article, common error), which is a major headache for FFIs and comes with high risk - misreporting can lead to pretty devastating punitive measures.
In fact, it’s considered such a headache that several banks stopped accepting US persons as customers, and actively closed accounts owned by US persons.
Thanks for the clarification. So if a fund does not do FATCA reporting, does that mean that fund managers simply won’t accept investment from US citizens, or is it that it’s illegal for US citizens to invest in these funds? Is there a scenario in which US citizens can invest in a fund that does not do FATCA reporting and would later have a legal complication (as opposed to being rejected by the fund before investment for being a US citizen)?
When a fund doesn’t want the headaches and overheads that come along with FATCA, they simply decide to disallow US persons. Just like some banks won’t allow US persons to open accounts.
There’s nothing illegal about investing with them, but they just won’t accept you.
No. There’s no legal issue for the US person, as long as that US person appropriately reported the investment to the IRS (as FBAR/PFIC). It is the FFI’s responsibility to detect and report any US persons via FATCA.
Great, thank you very much for the information!
@spc thanks for catching my typo. Fixed now!
@synec It’s not illegal, but either the fund or their bank is unwilling to do the required reporting.
I can’t find a fund by this name registered with the CMVM, nor any funds being managed by “Monarque”. Do you know if the fund is registered under a different name?
EDIT: I found the fund management company (“GOLDEN MONARQUE, SCR, SA”)—it wasn’t actually listed, but I found it with Google—but I still didn’t find the fund in question.
EDIT 2: I found the fund now but it seems it has not yet started any activity—at least not officially. It was also not listed in the main list of regulated funds. I would maybe hold off investing in it until it’s a bit more mature.
It also seems like a brand new fund management company, and there’s no information about the people behind the fund, so I would make sure to very carefully examine their track record in Portugal—if any.
Hi, I can’t find the list of funds or article you referenced from tkrunning. Can you please post a link?
My article with the list of funds that are currently open for subscriptions: https://nomadgate.com/portugal-golden-visa-guide/#the-relatively-cheap-and-easy-route-investment-funds
Here are all the funds that are regulated by CMVM (the Portuguese regulator): CMVM - Sistema de difusão de informação - Venture Capital
However most of these funds either don’t qualify for the GV, or they are not open for subscriptions.
Thank you for updates, Thomas.
Looks like CMVM just updated their online database and Monarque is now listed as having started their activity on Nov 30, 2019. Still I can’t personally comment on this fund, but if anyone have talked to or met with their team, feel free to let the community know your impressions 
The question was asked why some funds are not open to US investors, referencing possible issues with FATCA. My understanding is that the penalty is not on the investor, but very punitive against the banks and individuals operating the fund or bank if they dont report to the Treasury US investors with accounts. It becomes an issue that the US govt will blacklist and sanction any such company and this becomes a major issues doing business after that for those companies if they have no access to US markets.