I think we urgently need to place an article in Portugal that discusses this bait and switch on GV citizenship as a prime example of broader systemic issues of investing or doing business in Portugal.
Quote: “Portugal has gotten significantly WORSE since we started making investments in the country. If the trend continues, we’ll stop investing. And if you’re considering it as a tech firm, you’d be crazy to without some hard reassurances from the government.”
I think less politicians or the public will care about the GV people. It’s more what this signals to anyone looking to invest in Portugal. This will further spiral the reputation of Portugal.
Thanks for the suggestion and for your advice. I’m thinking along these lines as well but part of me thinks that an open-ended fund while allowing greater flexibility would be susceptible to a higher GV market risk as in case of a non GV friendly outcome, a load of investors could potentially cash out at the same time and as a result, the fund could go under. On the other end, a closed ended fund would mean you don’t get to have the flexibility of calling it quits whenever you want but at the same time, you are exposed to a lower risk in case things do go south.
The concern about everyone liquidating open-ended funds is overblown.
Take IMGA, the largest. When I last looked, it has a maximum of 1.1% of the issued shares of any of its portfolio companies, and an average of 0.4%. Suppose it’s entirely composed of ARI applicants (it’s not) and everyone files a redemption notice on the same day (they wouldn’t). It would only take IMGA a couple of weeks to pay out most of the redemptions, assuming they take it gently and only account for 20% of market volumes.
ARI redemptions aren’t going to crash any open-ended fund invested largely in PSI-20 stocks, and they aren’t going to crash the Portuguese equity market.
That’s a tough one. What exactly is your current situation? Have you put any money in yet at all? If zero, I would be inclined to warn you away from the programme…
Yeah that is true, it is highly unlikely to have a scenario where everyone pulls out at the same time and that collapses the fund. This is especially true if GV investors are a very small percentage of the total investors of a particular fund which as you say, is usually the case.
There never was a separate article for granting citizenship by investment as in other countries such as Malta, Cyprus …etc. Those countries did include grandfathering clauses when they closed down the CBI routes because they were in fact stipulated in their nationality law (i.e. it was hardwired) and as such current investors did have legitimate expectations with regards to acquiring the nationality.
For Portugal, the nationality law never had any provisions for investment-based routes or specifically mentioned any particular type of residence permit. The nationality law only allowed granting of citizenship by naturalization to golden visa holders, which is applicable to anyone residing in Portugal. As such, the amended nationality law can never include provisions specific to golden visa holders, either current or future holders. The amendments can only reference residents in general and any special provisions or transitory regimes must apply to all without any special favors.
A number of European countries increased their residency time and tightened their requirements and these changes applied immediately to current residents who have not applied for citizenship yet. What is meant by being retroactive are current citizenship applicants or people who applied before the final law was published. In the current proposal the cutoff date of 19 June 2025 is in fact illegal and will never be in the final bill, it is just a political stunt made to discourage last minute applications. The actual cutoff date will be the next calendar month following the publishing of the amended law which could be in September.
I’m optimistic that the final bill will include provisions for eligibility sooner than 10 years having integration goals made or that the actual waiting time will remain at five years nevertheless. If not I’m optimistic that such amendments can be made in the coming years to encourage highly qualified immigration. Remember that the main targeted applicants by the changes are Sephardic Jews and Portuguese by origin who both make up more than %90 of current applicants.
It’s true that the current nationality law does not distinguish between different types of residence permits. But there’s no legal reason why an amended nationality law could not contain provisions maintaining the status quo for ARI holders.
Suppose you have already been a Portuguese resident for four or five years under an ordinary permit such as the D7. In this manner, you will be able to apply for citizenship right away by making an investment for a very brief period of time which will convert you into a golden visa holder and exploit the eligibility.
In general even if those provisions were crafted carefully, they will amount to being a pathway to citizenship by investment which is now illegal as per the latest Malta ruling. The government proposals did in fact cite this particular case in their wording so it would be highly unlikely that they would actually include provisions to that effect in their final bill.
It’s not exploiting the eligibility. If someone wants to inject 500k to help the Portuguese economy and they have lived there for 5 years it’s reasonable to expect some benefit for that investment above and beyond what you can otherwise get for nothing as a D7, D8, MoI, asylum seeker, etc.
If anything, Portugal is exploiting investors by continually thrashing them.
I understand you have your agenda and your position, but it might not hurt for you to look at it from the perspective of people who are investing a ton of money into your country, paying huge amounts of taxes, and really getting nothing in return (most don’t use healthcare, social security or public services). ARI holders are essentially like permanent tourists with regard to the economic effects but spending a lot more money on hotels, government fees and taxes. Maybe you dislike tourists also, but there is no denying the country depends on them for income and economic stability.
We can probably agree that most of these problems are of the governments own creation. They created the MOI, and the Sephardic nationality law, CPLP and the job seeker law that brought in so many people in an unsustainable manner. By comparison, there are relatively few ARI applicants and most of the ARI holders I have met want to integrate to Portugal and help make it a better place.
I’m not against GV program however I’m looking at things from a rational point of view and trying to set realistic expectations. I’m waiting to see what comes out from these changes before I decide if I would invest in Portugal for the GV.
There is an alternative GV scheme in Malta that will soon be disclosed, likely in the next couple of weeks. It could essentially be a residency-based GV that leads to citizenship eligibility by naturalization after 5 years in the same manner as Portugal (English is an official language in Malta so it will not have language requirements).
If things turn out as proposed it might actually be worthwhile to move investments to Malta since it has rather quick processing times.
We’ll have to wait and see, but definitely it will a bit of physical presence required as opposed to the old CBI where you only had to visit on two occasions because that point was relied upon in the court ruling.
I don’t see why people keep repeating the lie that immigration was at unsustainable levels.
Maybe AIMA couldn’t keep up but that’s the fault of crappy bureaucracy, not some inherent limit on how fast society can accept new members. Same goes for other Portuguese institutions
It’s a little more complicated than that. Your lawyer is correct but the fact they sit in different pieces of legislation is not an argument. Laws are often considered in relation to each other even when separate.
They said that na sua atual redação must be considered in light of non-retroactivity and legal certainty, both of which are embedded in Portuguese legal codes. But added that without seeing the final version of the law and understanding how it would apply to my specific situation, any interpretation at this stage is still speculative.
And for what it’s worth, in my experience, I’d caution anyone getting worked up about one-line answers from lawyers about the meaning of specific legal terms. That’s not especially helpful. There’s a big difference between understanding what a phrase generally means and how it functions in a particular case. The detail always matters. You’re not going to get a full argument on this forum.