This is a pipe dream. Qualified and unqualified Portuguese have been leaving Portugal for better salaries and opportunities for decades. It is very tough to find highly skilled people in Portugal. The tourism industry also related to AL picked up a lot since the recession. Not only through the various GV options (hotels/resorts) but also investors within the EU who bought property for short term rentals etc. Brexit also saw a flood of Britishers buying property in Portugal. All of these and related activities has been positively contributing not only to the economy but also to the positive image that Portugal has gained since 2008-2012. With these new changes any sane entrepreneur will think twice before investing in a country with uncertain and erratic laws based on emotion of politicians. They will be lucky if they get any interest beyond the nomad workers/retirees/people from the UK
So what are the next critical dates - around April 10th or so to get the actual bill language? And then do we have a date for the parliament vote where we all hope this fails the vote?
Personally I think the āPGV industryā pushed applicants to Real Estate when the āsimplestā way has always been Capital Transfer
I completely agree that our law firms need to be speaking with the various arms of the government, but especially SEF. Minenare doing that but this Government is playing the populist card.
Well, I was actually thinking of starting a tech firm working on AI for automation in the Portuguese speaking world. Sorry, not in Portugal, now. I will revert back to Germany, The Netherlands or Austria and put up with the increased bureaucracy and taxes. At least the rules of the bureaucracy do not change and for the extra taxes I get an educated government that wants all people and businesses to flourish.
As for your situations, the cultural Heritage option was added sometime in mid 2022. I would have gone that route had it been available.
For those of us who opted to invest in real estate (personal or commercial) this change is a bait and switch. To that end it is disadvantaging those of us who have spent a lot of money. Changing the rules of the process 12 months after starting the process cannot be constitutional. Portugal is acting like a country in which the rule of law is up to the current government. That is not a democracy, but an authoritarian form of government, which is singling out a minority for discrimination and in this case robbing them in the process.
Are Costa and the Socialists the next Salazar government, I hope not!
This is a pipe dream.
I think the real pipe dream is imagining that GV contributed to Portugalās positive image, that terminating GV will discourage entrepreneurs. Youāre projecting your current emotions on the vast majority of the EU population (including entrepreneurs) who have an extremely negative impression of GV. They donāt think access to the EU (either residency or citizenship) should be sold.
Portugalās positive image for vast majority of immigrants is primarily from the tourism, weather, safety, food, culture, standard of living, etc. I donāt think anyone except GV applicants/holders will cite GV as contributing to Portugalās image positively.
Qualified and unqualified Portuguese have been leaving Portugal for better salaries and opportunities for decades. It is very tough to find highly skilled people in Portugal.
No doubt, which is why the Portugal government wants to change that. Theyāre shifting focus away from real estate investments to highly skilled job creation. In 2008, people said fixing the sluggish Portuguese economy was a pipe dream with GDP falling every year for nearly a decade; they certainly turned it around since 2015.
With these new changes any sane entrepreneur will think twice before investing in a country with uncertain and erratic laws based on emotion of politicians.
We shall see. Lots of GV applicants are still pouring money into GV post 16 Feb despite the āuncertain and erraticā laws ā and they are directly affected! Entrepreneurs who have never been targeted, will likely ignore this.
Where thereās money to be made, memory is short. Argentina defaulted on its debt multiple times, yet investors flocked to their debt offerings after each default to catch the gravy train moving up.
Bill language would likely be the week after Easter Sunday.
The PMās party controls more than 50% of the seats in parliament so thereās next to no chance the bill containing GV termination will fail.
The hope is that the President vetos it (unlikely, the package has been split into multiple bills and his beef is not with this part) or refers it to constitutional court. The PM or 1/5 of the Parliament can also pre-emptively refer it to the court. If the referral occurs, the constitutional court has a legal deadline of 25 days to make a ruling, so a decision will likely be made sometime in end April/May.
If not referred or the court gives it the green light, GV applicants/holders will have to bring suit themselves.
Respectfully, I disagree.
Portugal somehow emerging as a bastion for entrepreneurship is not going to happen. As someone who advises early-stage, venture-backed startups, I would sooner recommend Croatia (at least Croatians work hard) as a desirable place to start a business. I think the governmentās treatment of GV will leave a stain on the countryās record that will be impossible for other investors to ignore.
This isnāt an emotional reaction. I havenāt yet invested (thankfully) - only an upfront pmt on legal fees. The reality is that absent an insanely large carrot, and/or incredible product market fit (e.g. tourism, siestas), and/or a radical change in the talent pipeline, very few serious-minded entrepreneurs would chose Portugal as a venue.
There are too many other entrepreneur visas available that are battle-tested, in much stronger economies, and not vulnerable to interference from the government.
The only reason I chose Portugal is the lack of physical stay requirements for residency, nothing else, especially not because itās a good place to invest.
I certainly agree that is the case today. Just as Portuguese economy took 7 years to turn around (2008-2015), and the prospects appeared bleak in the intervening years, this transformation will not happen overnight.
With Portugal becoming rapidly more expensive for locals, this is no longer an issue of merely seeking higher savings abroad due to higher salaries of past decades. Portugal is becoming unaffordable for locals to live in on a local salary and they have two options: slash costs or raise wages. Raising wages (by creating skilled jobs) is the more sustainable of the two.
I fully agree with Gemma. My responses also are not emotional. Yes, I invested in real estate and it is generating decent cash flow (on long term rental). One way or the other I will squeeze out gains.
But more importantly for Portugal to succeed and come out of its present situation it is more important to āraise wagesā and not ācost cutā as per your statement. However, the fact that they are trying to make housing more affordable is an indirect cost cutting. Developing a strong talent pool and encouraging that talent to stay in Portugal by offering competitive wage (so the talent pool does not flee Portugal) and an environment where entrepreneurs can thrive with a strong sense of stability and trusting government policies is the only way Portugal can come out of its economic and public woes. Only a conducive investment environment will allow for entrepreneurs to flock to Portugal and offer higher wages in these competitive times. As Gemma states there are too many more lucrative markets where entrepreneurs would flock to. With its present and new intended policies it will become even a bigger attraction for retirees and people from the UK. That may be the intention of the present government. But forget entrepreneurship investment unless it is related to the tourism and related areas and retirement. That is not going to happen due to far more attractive markets.
As Thomas has posted here, the law should not be passed at the parliament. However, external pressure means they have to end GV, housing package is just a cover. Itās going to be one hell of a ride for some of us.
They can do what Ireland did, bring a decent death to this decade long regime. I donāt see why they want to do it retroactively.
Iām an IMGA Portugal investor, I am glad I switched to this open-ended fund last minute. I am not concerned as the fund is PGV eligible, but not targeting PGV, means not many investors are PGV investors. They also reserve about 20% cash, their fund size is 154M, so about 30M cash reserve. If the law passed with retroactive effect, it should not be a big issue for us, PGV investors to cash out.
Not to mention we pay only 0.2% subscription fee and the redemption fee is 0%. This compare to 1.5% to 7% of close-ended fund. Given the low fee, itās understandable why no law firm/advisory firm promotes it. But some against it which i think is professionally unethical.
I find it hard to believe that the latest proposal to change GVs already granted to another catagory with enhanced stay requirements , will actually become law. Like many other investors, I simply cannot stay in Portugal for 183 days a year and the only reason I invested over 600K euros in the country was due to the low-stay requirements. Promises made at time of application must be kept, and such an action will be illegal in most jurisdictions around the world. Doesnāt make sense to punish investors who have already invested a considerable sum.
Only a small fraction of GV investors have actually made it all the way through the program to acquire permanent residency or citizenship. Changing the rules around length of stay will invite a massive class action lawsuit I would imagine, with around 8000+ litigants. I agree with @mir3134.
The other question to answer is why the government wants to change the stay rules midway through the process for thousands of investors: it doesnāt solve the housing problem.
94 posts were merged into an existing topic: Discussion of the potential unconstitutionality of the proposed GV law changes
What Iām wondering is, after the changes made in the countries that are EU members and make golden visa applications, what kind of application did they make to those who were in the golden visa status, did they protect their old rights? otherwise they acted according to the new legislation.
The most critical situation here is that if it removes the 7-day condition within 1 year and brings the other session conditions, namely the 180-day stay condition, it makes no sense.
Reading all the analysis here so far has been helpful though terrifying. I really wish that the Portuguese government didnāt seem to view us all as leeches on society, taking advantage of a system and credit us for part of the transformation Portugal has seen.
I have no idea how, but they need to see real faces, families, stories and the people behind these investments. Weāre not all a bunch of wealthy investors trying to buy our way. As someone else pointed out, the ranges 280K-500K were designed for those not necessarily wealthy.
Many have mentioned this is/was their life savings. I can tell you it was a portion of mine, hard-earned over decades. Iāve visited Portugal 11 times. Starting in 2015. Iāve seen the transformation that foreign investors have brought to Lisbon, Porto, the south. The government should be thankful and not scapegoating. This wouldnāt be a place that so many would like to call home or that locals would like to stay if in part, this did not occur. I remember our first visit - it was like a bombed-out war zone of empty dilapidated shells in many places. Every local we talked to wanted out.
Wonder why that changed? Think about it.
Interestingly, Iām in Lisbon now, and you want to fix the housing crisis. There are hundreds of empty apartments we pass on every walk. The problem? Who is going to pay for the massive renovations? Indeed not the government. Why not a creative use of the GV to create more affordable housing? It would transform neighborhoods.
Iāve also invested seperately in a rental property (hotel type operation so once again, not stealing anyoneās housing) and it attracts hundreds of people every year to enjoy Portugal. Couldnāt even tell you how much money flows through to the local area. And I pay a fat 25% income tax off the top on that income to Portugal. I enjoy nor use any services by the way. I contribute quite a bit in taxes and fees, which they gladly take.
This whole story of us being a bunch of fat, wealthy leeches on the country needs to stop. Are there cases like that? Iām sure. But, hearing from everyone here, we need to put more of a face on the real, honest, reputable people who just fell in love with a country, and bought into a program that we were sold. And yes, promised. I know thereās a debate about how it could always change but come on, Portugal went along with it, and it never once made any effort to correct how lawyers or real estate firms were promoting it.
Sorry for the rant; we all have one Iām sure. Instead of just lawyers, the politicians need to see more deeply who these policies are impacting and in some cases, destroying. Real people, real faces that have made extraordinary financial contributions, and many who would like to go beyond that.
Totally agree. Total bullshit about ARI not creating jobs or stimulating the economy. The house I purchased had sat empty for years, a typical situation where children inherited it from their father and had difficulty agreeing on how best to monetize it, whether to fix it up or not, etc. And since buying it I have invested nearly 100,000 euros renovating it and paying locals to do all kinds of repairs and work to it, updating plumbing, rewiring the whole house, replacing all the kitchen appliances, replacing 5 mini split AC / heating units, not to mention a massive investment in solar panels. Iām currently paying locals to arrange for rain water capture into a cistern and hook that up to a drip irrigation system to bring the plants and trees back from the dead without wasting city water. And I have been living in it 3 months at a time (maximum possible under Schengen Visa rules) flying back and forth from the US every 3 months on TAP. While living here I have been spending a lot of money in local shops and restaurants. If Portugal passes some bullshit retroactive law that pulls the rug out from under me I will DEFINITELY direct my attorneys in Lisbon to file a lawsuit, with or without anyone else.