Have you tried asking your lawyer? Everyone has made investments in different areas, therefore documentation requirements maybe different. In my case, bank declaration was uploaded on application submission day.
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Asked my lawyer , the answer is ā not recommendedā and some of my friends mentioned itās OK to do so. So I am not sure what is right to do !
This crystal Ball thinks it will be until September:
What is going to happen with all these funds that were designed to invest in real estate if they can no longer do so? They have raised the funds already.
Itās possible that they could be forced to shut down and liquidate all the assets. On the other hand, itās also possible that they would be allowed to continue with no effect on them.
I wouldnāt mind shut down at this point. Would love to get my money back sooner and be out of this administrative quagmire!
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There are two aspects I am going to comment on.
First, the initial GV submission online requires only a subset of documents, and you can see the mandatory ones marked with an asterisk on the portal. My own submission was long time ago, so I donāt exactly remember if the bank declaration is mandatory, but I suppose it is. Even if so, you can simply create a pdf ādocumentā written by your lawyers and stating the reason for delayed declaration, with commitment to upload as soon as becomes available. This would solve the actual technicality of making the submission.
Now secondly, the bank declaration is one of the easiest documents to obtain. Did you talk directly to your bank? What did they say? Remember itās Portugal so you should not rely on emails too much, youād be much better off speaking with people on the phone or better still in-person.
Go visit your bankās branch, find the branch manager, take him out for lunch, and I bet you will have your declaration by the end of the day.
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This is more likely. Technically the funds arenāt tied to the GV program, so they will continue to operate and the investors get hosed by the Portuguese government. Making it worse, the government wanted investments that would hold for at least 5 years, so the funds locked people in for at least that long and in many cases longer. No matter what, investors are stuck with marginal investments and may or may not end up with a GV.
Thereās no retroactivity though is there? So the funds will be treated no differently to a real estate investment - as long as the application is in by the deadline, itās safe, so the fund will need to continue for all the existing investors.
Secondly as someone rightly pointed out below, the funds themselves are nothing to do with SEF or the golden visa. They are regulated by CMVM - some of them just happen to qualify as GV investments.
Thirdly, lawyers have pointed out that the wording about funds not investing in real estate is legally ambiguous. It seems itās most likely been put in to the law to stop some fancy fund structures that allow GV investors to buy real estate via a fund. It seems very unlikely the government- if itās keeping the GV - intends to stop property development as this will actually help ease the housing shortage. There are also some types of real estate that is run like an operational business - a hotel for example, as long as itās not simply leased to a third party, is an operational business that will directly employ a fair number of people. I would be very surprised if the likes of Mercan donāt seek clarification and find a way to continue their business via a fund.
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As far as we now know of the draft/proposed new GV rules, will they apply solely to new applications? In other words, for those who have already submitted an application and are currently somewhere in the pipeline awaiting final approval, will we be able to renew our eventual GVs under the terms that were stated at the time of initial application? Iām particularly wondering about applications based on the IMGA investment fund - will we be able to renew our GVs with this same fund? Iām asking because there had been some talk about whether or not the IMGA and other investment funds would continue to qualify under an entrepreneurial requirement that had been floated at some point?
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I donāt see any reason why any of the funds that qualify for GV would need to shut down, unless both of these apply in their case:
- They havenāt yet raised the required capital to operate the fund profitably
- They arenāt able to raise additional capital outside of GV investors
I see no (renewal) risk for investors into funds with sufficient capitalization that get their applications in before the law changes, including those who already invested in IMGA or the like.
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So there are no changes to the renewal requirements for those who will have already applied - ie under current rules - by the time the new law takes effect? Or rather, nothing at all has changed for those whoāll have already applied before the new law, save possibly if some of the venture capital/private equity investment funds subsequently become unviable?
The short answer isā¦ we donāt yet know. Recent reports suggest that the intentions are that existing applicants are protected, and investments that are real-estate-adjacent will no longer be accepted. But we need to see the final text, presumably when the Committee votes on Tuesday or the Plenary votes on Wednesday.
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It will also be interesting to see what āinvesting in real estateā means with respect to this new proposed aspect of the law. It seems like something like Rock Capitalās projects (buy some old buildings, fix them up and sell them) is probably a direct target (which in my opinion is unfortunate, because they are improving the neighborhoods, but thatās not the point here). What if one is investing in a Mercan project to build a hotel and increase tourism, does that count as āinvesting in real estateā? If your fund invests in ground leases that have long-time commercial tenants (Iberis Capital Portugal Yield Fund), is that āinvesting in real estateā? It will be interesting to see how the various funds fare.
Entirely based on vibes, I think the intent is to prevent someone from creating a āfundā that just proxy purchases properties for people. I suspect there wonāt be as much of an issue from this as people are worried, but that is entirely based on gut feel not a thorough reading of the law (which we donāt even have the final text of!)
Gotta just chill and wait a few days to see what we get
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Always has because Mercanās offerings involve directly investing in real estate. This had the advantage (up to now) that it lets you qualify with e.g. the 280k building renovation in low density area investment minimum, rather than the 500k fund investment minimum.
Depending on how things change Mercan may be screwed, or if Madeiraās autonomy lets them continue allowing GV real estate investments there, Mercan will just renovate a lot of hotels in Madeira.
I would put money on Mercan already being focused on pivoting their business model to work via a fund structure once the changes come in to effect. Yes it will increase the minimum investment to 500k, but the only option lower than that will be a donation wonāt it?
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This draft of the MH bill has just been posted in another group, and I understand itās current. Iāll post my reaction in a moment.
Textofinal PPL 71_XV ProvisoĢrio.pdf (475.6 KB)
The text seems to confirm recent reporting. Below my interpretation, but Iām not a lawyerā¦
(1) The Golden Visa / ARI continues to exist, and applications can continue
(2) Applications will no longer be accepted in three categories: (i) - capital transfer, (iii) - real estate, and (iv) - real estate under renovation
(3) Investment funds remain an option - includes venture capital AND equity funds e.g. IMGA - but only if they are ānon real estateā
(4) New Articles 44 (renewals of existing ARIs) and 45 (pending applications) now ONLY apply to the revoked investment options [capital transfer / real estate]. They retain the confusing language about entrepreneurial visas, and Article 45 continues to list various entities that can verify the adequacy of the investment.
(5) There might be a grey area for funds invested in companies involved in real estate. The old paragraph (vii) definition covered āparticipation units in investment funds or venture capital funds dedicated to the capitalization of companiesā. The new definition is holdings in ānon-real estate collective investment undertakingsā. If a real estate fund qualified under (vii) and not under (iii) or (iv), then it no longer qualifies, but also is not captured under Articles 44 or 45. So itās not clear (to me at least) how renewals or pending applications of this type will be treated. This will probably end up being clarified.
In short, it looks to me:
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if you invested in an equity or [non real-estate] VC fund, thereās absolutely no change to your status
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if you used the real estate or capital transfer routes, there seems some residual legal uncertainty about whatās required in Article 44 and 45, although lawyers have suggested there should be no real issues here
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if you havenāt yet applied, you should be looking at funds that invest in companies, not real estate
Further thoughts welcomed
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