Portugal Golden Visa - The New Law of 2023

Residencies & citizenships Portugal Golden Visa šŸ‡µšŸ‡¹
1617

TLDR: the new regulations (17 Jan 2024) look good, preserve the status quo for renewals for existing investors, and also for applications and renewals for those with pending processes.

IANAL of course. My annotations (in bold) of the new regulations to the Aliens Act as per the translation uploaded by Chris above. Go to page 48 of the translation, Article 5 ā€œTransitional ruleā€.

5 - Renewals of residence permits for investment activities defined in points i), iii) and iv) (i.e. capital transfer, real estate, real estate rehabilitation) of paragraph 1 d) of article 3 of Law no. 23/2007, of 4 July, as amended prior to the entry into force of Law no. 56/2023, of 6 October (ā€œMais Habitacaoā€, which revoked the above 3 categories), granted under the legal regime applicable until the date of entry into force of said law, (i.e. old renewal rules apply) The residence permit regime for immigrant entrepreneurs provided for in Regulatory Decree No. 84/2007, of 5 November, in its current wording, applies mutatis mutandis. (mutatis mutandis doing some heavy lifting here, see below)

6 - The provisions of the preceding paragraph shall apply to citizens holding a residence permit for the investment activities referred to therein and their family members, who comply with the requirements provided for in article 80 of Law no. 23/2007, of 4 July, as amended, and who apply for the granting of a residence permit for permanent investment activity. (ā€œgolden PRā€ continues to be accessible to people who invested in now-revoked categories)

7 - The situations provided for in the preceding paragraph shall not apply to the provisions of paragraph 2(b) and paragraphs 3 and 4 of article 85 of Law no. 23/2007, of 4 July, as amended (these 3 provisions define cancellation norms for regular PR due to prolonged absence; here weā€™re reaffirming that ā€œgolden PRā€ is not subject to the same rules)

8 - The provisions of paragraph 5 shall also apply to applications for the granting and renewal of residence permits for the investment activities referred to therein, which are pending before the competent authorities on the date of entry into force of Law no. 56/2023 of 6 October. (applications in the now-revoked categories pending as of 7 Oct will be honoured according to the old rules)

For reference, the relevant article from the decree covering immigrant entrepreneurs:

Article 31: Residence visa for carrying out independent professional activity or for entrepreneurial immigrants

1 - The application for a residence visa to carry out independent professional activity, included in the list of professions in force for identifying IRS taxpayers, is accompanied by:
a) Articles of association or contract or written proposal for a service provision contract;
b) When applicable, declaration issued by the competent entity to verify the requirements for exercising a profession that, in Portugal, is subject to special qualifications.

2 - The application for a residence visa for entrepreneurial immigrants who intend to invest in Portugal or have already done so is accompanied by:
a) Declaration that you have carried out or intend to carry out an investment operation in Portugal, indicating its nature, value and duration; It is
b) Proof that you carried out investment operations; or
c) Proof that you have financial resources available in Portugal, including those obtained from a financial institution in Portugal, and the intention to carry out an investment operation in Portuguese territory, duly described and identified.

3 - The application for a residence visa provided for in the previous paragraph will be assessed taking into account, in particular, the economic, social, scientific, technological, or cultural relevance of the investment.

IMHO the only way this is going to be consistent with the above transitional rules is if ā€œmutatis mutandisā€ means 1 is ignored, 2 checks proof of investment, presence, etc. by the old GV rules, 3 is ignored. I expect the only practical difference is that the new card will say ā€œAct. Profissional Independenteā€ instead of ā€œAR Investimentoā€.

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1618

Some observations.

New Applications - Investment Funds

I was interested by the way theyā€™re going to judge ā€œnon-real-estateā€ funds going forward. From new Article 42r on p43:

1 - Information relating to the exercise or maintenance of the investment activity, and other information legally required in relation thereto, shall be proven, depending on the type of investment:
ā€¦
c) By consulting the databases of Banco Portuguese de Fomento, S.A., or by making a statement by the management company, in compliance with the provisions of paragraphs 8 or 9 of article 51, as the case may be, with regard to the transfer of capital in an amount equal to or greater than 500 000 (euro), intended for the acquisition of shares in non-immovable collective investment undertakings, that are incorporated under Portuguese law, whose maturity, at the time of the investment, is at least five years and at least 60% of the value of the investments is carried out in commercial companies established in national territory;

So it looks to me that if youā€™re a fund, you can probably self-certify that you are not involved in real estate. The law itself suggested that one of the named agencies would have to do the certification, but it seems thatā€™s been (sensibly) relaxed.

Existing Applicants, Real Estate

Article 45 of the October law (pending applications), covering people who invested in, say, real estate, talks about the various agencies being required to ā€œverify the adequacy of the investment to the respective entrepreneurial projectā€. I expected the Regulations to clarify how this would work for existing applicants, but the Transitional Rule doesnā€™t seem to say anything about this.

Existing Applicants, Real Estate Funds

The Regulations donā€™t seem to clear up the grey area of real estate investment funds. These used to be in para (vii) of the investment definitions, but were struck out in the October law. But the Transitional Rule (like Article 45/45 in the new law) only cover paras (i), (iii) and (iv) of the investment definitions. So where does that leave existing applicants who invested in real estate funds?

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1619

Iā€™m reading para 8 of the Transitional Rule (ā€œThe provisions of paragraph 5 shall also applyā€¦ā€) as clarifying exactly this point: existing pending real estate applications as of Oct 7 2023 will be processed by the old rules, without any extra requirement for verification.

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1620

Chris and MM,
Thanks for your work on this. Very informative and helpful.

As for the mutatis mutandis, I gather the point is that D2 applicants will be treated the same as in the past. I donā€™t think this sentence has anything to do with former ARI but only the old D2. It seems a strange way to administer a new law but certainly gives AIMA a lot of discretion which can be good or bad, depending on your situation.

According the legal dictionary, the phrase mutatis mutandis indicates that whilst it may be necessary to make some changes to take account of different situations, the main point remains the same.

I tend to agree the crux of the regulations is to say that there is no retroactivity of the new law.

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1621

Maybeā€¦ but Iā€™m still a bit puzzled. The October law seems (to me) to say that for pending applications the various agencies have to verify the investment, or ā€œothers that prove appropriate to the matterā€. So I was anticipating a fudge in the Regulations to say something like ā€œin the case of real estate, the adequacy of the investment may be verified by consulting the records of the CĆ¢mara municipal.ā€. But the Regs are just silent on this. Itā€™s still unclear to me whether AIMA does anything to meet the provisions of Article 45(4+5) of the October law, or whether they just ignore it. Perhaps the new AIMA manual will address it.

1622

My thought is that reading the October law too strictly or literally is not what was intended at all. The PM made his point very clear that there was no retro-activity and seems content to just waiving along all prior applications. The language they use for D2 of ā€œmutatis mutandisā€ reinforces this opinion. In other words, ā€œdonā€™t worry about the actual text, instead focus on what we are intending to achieveā€. Notwithstanding some of the confusing and contradictory language itā€™s easier to conclude that the main purpose of the previous law remains the same.

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1623

Hereā€™s the initial analysis from Prime Legal:

Amendments Immigration Regulation 2024.pdf (576.7 KB)

Part of their conclusion with regards to GV:

With regard to the Golden Visa program in particular, the changes are ā€œneutralā€ in relation to what already resulted from the October amendments to the law, and therefore, doubts remain about the terms and conditions of the application of the entrepreneurship residence regime to pending concessions and renewals of Golden Visa processes associated with real estate investments or the transfer of 1M capital. Remains also unclarified what is understood as ā€œdirect or indirect real estate investment activityā€.

Soon, if AIMA does not get ahead with its legal understanding of the updated legal framework, certainly there will be published court decisions and legal opinions regarding these unclarified aspects, in order to secure the rights of such Investors.

It is important to highlight, for their peace of mind that, their rights arising from Golden Visa and Investments performed before October 2023 are not being withdrawn, but subject to a different proceeding. As such, the ā€œproblemā€ here, is ā€œmainlyā€ the fact that such proceeding might not be the most appropriate given the reality they substantiate and the existing procedural alternatives.

All considered, the recommendation remains: Conservative approach when interpretating the law and choosing an immigration program or investment option; keep in mind the purposes of each immigration program in its genesis; do not disregard the topic of a potential tax impact at a personal and always look for professional advice.

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1624

This is great, it seems there are a lot of simplifications that will streamline the process. For example they might not need to take biometrics so often:

In the case of applications for residence visas, if the applicant has already collected their biometric data and submitted the necessary elements to the consular section for the residence permit application, and if these elements are made available to AIMA, the second stage of the process, i.e. in person appointment before AIMA, may no longer take place;

And might not need fresh police reports so often:

Specifically, this law stipulates that information on the applicantā€™s criminal record in third countries is to be verified by consulting the criminal record information system of the country of nationality or the country of residence where the applicant has lived for more than one year. Only in cases where access is impossible will it be done by presenting the traditional criminal record certificate;

1625

This analysis, from an esteemed law firm, mentions twice that the new regulations do not alleviate the concerns about unconstitutional retroactive effects for investment funds centered on real estate, or for capital transfers. As written, the new law may subject golden visas to the requirements of the D2 visa, except for the days in country and tax residency factors. The document foresees that in the worst case, it may be necessary to sue for relief from new and intractable entrepreneurial requirements for future renewals.

1626

There seem to have been a bunch of pre-approvals from Dec 2021 in the last week, and Iā€™m assuming that a big proportion of them are in real estate or real estate funds. So if thatā€™s any indication, then maybe theyā€™re just ignoring this requirement?

1627

I havenā€™t followed the nitty gritty of the analysis, but Iā€™m not sure how that interpretation could stand. If you invest in a fund that was focused on real estate at the time the investment was made (and such investment focus was legal), and those funds were invested, there is no way to ā€œback outā€ of those investments in reality. Any change now that made this inpermissible would be retroactive per se. Maybe there is some nuance that I missed. As one of the people in those funds, I guess I will just ignore it. My lawyer, who is from one of the largest/most reputable firms in Lisbon, said this is not a worry so I guess I will take his word for it.

1628

Itā€™s quite likely that this will all blow over by the time it affects me. I agree that applying new criteria would be an unconstitutional, retroactive imposition, that would almost certainly be overturned in a lawsuit. I also donā€™t see how the government has much to gain from inconveniencing GV holders in this way, and repeatedly losing in court. Portuguese people I know universally hold the opinion that everything will be fine; that is the culture. They all seem to find it unfathomable that I have any concern about non-renewal of my visa.

Nonetheless, the law is poorly written, and the new regulations have not cured the defect. The Prime Legal analysis confirms this concern, and itā€™s anyoneā€™s guess how it gets resolved. Fortunately my next renewal is in Q4/2025, so thereā€™s plenty of time for things to equilibrate between now and then.

1629

Yes, thatā€™s a good point.
I was pre-approved (in November 23) after the law was passed and I did a capital transfer. It would be difficult to understand the logic to reject me later using a different interpretation of the same law, because of the capital transfer.

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1630

It must be a great feeling to have that much faith in oneā€™s government. ā€œEverything will be fineā€ when is the last time youā€™ve heard that uttered in the US? :joy:

My US cynicism training is so strong that all I can think is ā€œI hope they donā€™t get their hearts brokenā€. It sounds great!

1631

So those of us who bought real estate and applied in 2022 are left with no guidance and are going to have to spend yet more money in hopes of getting a positive (but arbitrary and non-precedential) determination?

1632

I donā€™t perceive from reading the Prime Legal analysis that the ambiguity in the law applies to direct real estate investments. It specifically raises the concern for holders of real-estate focused investment funds, and capital transfers. I encourage you to read the Prime Legal document directly, to get your own take. Thomas attached the document a few days ago, above in this thread.

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1633

ā€œ Regarding pending applications, new requests for renewals, as well as pending renewals of temporary and permanent residence permits for investment activities, granted under the regime prior to October 2023, relating to bank deposits and real estate investment, it is clarified that the residence permit regime for entrepreneurial immigrants applies, with the necessary adaptations, safeguarding the non-subjection to the periods of stay in Portuguese territory that residence for entrepreneurs requires. It remains to be seen how, in practice, the ā€œentrepreneurialā€ element will be applied to this type of investment and whether there wonā€™t be a retroactive aspect to discuss here in terms of unconstitutionality.ā€

1634

You are right! Welcome to club nerve-wracking uncertainty! :joy: :sweat_smile:

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1635

Itā€™s not nerve-wracking to me. Itā€™s so utterly illogical that they would make it retroactive for funds that invest in real estate and capital transfers, when the real villain of this whole programme was direct real estate investment and theyā€™ve made it clear thereā€™s no retroactivity for that. VC funds investing in real estate only got banned at the last minute as they realised that they could be used to structure real estate acquisitions (and in the process they missed an absolutely golden opportunity to drive a source of funding for the development of affordable housing in Portugalā€¦). Because itā€™s so illogical itā€™s very easy to put this down to incompetent drafting. The fact that Peter who posted above was pre-approved for a capital transfer after the law was passed seems to show theyā€™re just ignoring this ambiguityā€¦

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1636

Iā€™m not worried. Everyone has said that it will be fine. It will be fine. Once someone says it isnā€™t fine, we can take swift and decisive action.

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