People saying that Portugal can’t or won’t create separate rules for ARI holders are missing the point. These ARI investors are unique in the way that changes to the Constitution would affect them, so unique application of the law is a necessity to avoid Constitutional issues.
Take the example of an ARI holder who invested 500,000 euros in Portugal for 5 years as required by Portuguese law based on statements and promises and existing laws that gave the investor the right to apply for citizenship after 5 years. The Portuguese government effectively confirmed these expectations by amending the Constitution in 2024 to clarify the 5 years was, in fact, 5 years, despite delays in processing. Many people have literally made changes to their lives in anticipation of this 5 year period.
Changing this period to 10 years substantially and materially harms these investors, particularly with regard to the investor’s legitimate expectations.
More importantly, the very nature of these changes uniquely affects ARI residence permit holders. The reason for this is quite obvious at its core. Most other categories of residence permits such as D7, D8, etc would be inconvenienced, but not directly harmed by a change from 5 years to 10 years. Since most of these others are already living in Portugal, requiring them to live in Portugal 5 more years does not materially change their status quo. In the case of ARI, it could directly and irreversibly harm investors. In the most severe cases, some people’s investments in funds would be liquidated after the end of the fund, and they would have no way to continue complying with the law.
There are several strong legal arguments that could prevent Portugal from retroactively changing its laws to the detriment of investors. As I have noted in the past, ARI residence permit holders are not simply residents, they are first and foremost investors who have relied on statements and promises from the government to induce the injection of significant capital into Portugal. This is captured by the principal of legitimate expectations and the principle of legal certainty. The OP was right to note these principles.
These principles are firmly rooted in both EU law and Portuguese law.
Principle of Legal Certainty
“The principle of legal certainty requires that rules of law be clear, precise and predictable in their effects.”
Principle of Legitimate Expectations
- If individuals act based on existing law and have justified expectations that certain legal conditions will remain stable, a retroactive change may violate this principle.
This principle is especially strong when public authorities have made representations or assurances, or where individuals have made investments or long-term decisions based on the law.
These principles do not prevent a Member State like Portugal from changing naturalization or residence laws, but they do constrain:
- Retroactive application of more onerous conditions to those who relied in good faith on previous laws.
- The way in which those changes are implemented, especially if they disrupt existing legal positions, long term investments or expectations without adequate transitional provisions or periods of time.