Indians among the best nations to obtain Portuguese visas

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With a long wait for the US green card, many Indians are considering the Portugal Golden Visa before applying for US permanent status

By Shilpa Menon

The Indo-Portuguese connection is centuries old and dates back to the early 15th century, when Vasco da Gama reached the southwest coast of the Indian subcontinent.

Many Indians who have visited the picturesque destinations of Goa or Daman and Diu will testify to the beautiful Baroque-style architecture that can be seen in the Catholic churches built by the Portuguese in the 16th and 17th centuries.

However, recent years have seen a new kind of bond between these two nations, a trend reversal where Indian citizens are now investing in properties on Portuguese soil.

Portugal grants a residence permit for investment, also known as Autorização de Residência para Investimento (ARI) or Golden Visa, to third country nationals outside European Union states through various channels, including including the purchase of real estate.

Shilpa Menon

The program has enabled the European nation to garner an investment of more than 5.8 billion euros in less than a decade since its creation in October 2012, of which nearly 95% in the real estate market.

While around 60% of visas have been granted to Chinese and Brazilian nationals, India is slowly starting to move up the rankings.

It was among the first 5 countries whose nationals obtained visas in January, May and November 2020 and in April 2021.

Last year saw a huge 87% increase in the number of Golden Visas issued to Indians by Portugal, from 33 in 2019 to 62 in 2020.

The Portugal Golden Visa (PGV) is sought after by affluent international families because it offers a relatively straightforward path to obtaining an alternative residence in a European country.

With a PGV, families can benefit from advantages, including the possibility of living and working in the country, access to the whole of the Schengen area and the possibility of applying for Portuguese citizenship after five years of legal residence. (compared to seven years in Greece or ten years in Spain).

Additionally, a PGV holder must be present in Portugal for as little as seven days per year on average throughout the investment period, making it a feasible option for many foreign nationals.

Residence in Portugal provides access to a world-class education system with a solid theoretical foundation and an extensive research focus that is fully integrated into the European Higher Education Area.

As a resident, you can also access the excellent health system provided by the Serviço Nacional de Saúde (SNS), the national health service of Portugal.

Portugal ranked 21st in the recent “2021 Best Countries Ranking” developed by US News in partnership with BAV Group and the Wharton School at the University of Pennsylvania.

It is also the 4th most peaceful country in the world, according to the 2021 Global Peace Index (GPI) report produced by the Institute for Economics & Peace (IEP).

Read: What the expiry of the EB-5 program means for immigrant investors (August 12, 2021)

Add to that the Mediterranean climate and the natural beauty of the country, and you have an ideal location that foreign families would like to call their second home.

Living the “good life” in Portugal may be a noble aspiration, but there are only a number of ways to achieve it. The ARI or Golden Visa program allows you to make this dream come true in different ways.

These include a capital transfer of € 1 million or more, the creation of 10 jobs, the purchase of real estate worth € 500,000 and more (€ 350,000 if the construction dates back more than 30 years or is located in urban regeneration areas, for rehabilitation), or capital transfer programs to invest in different activities and funds from € 350,000 and more under certain conditions.

The real estate market in Portugal has experienced an unprecedented boom in recent years, growing by over 86.5% over the past decade.

While buying a property in Portugal has been the route of choice for foreign investors so far, over the past year there has been growing interest among PGV investors to explore alternative routes. .

The private investment fund route, which has only been around for a few years, is one of those alternative routes that is rapidly gaining in popularity.

This is due to several reasons including, but not limited to, tax efficiency, return expectations, reduced administrative burden for the investor, and the benefits of diversification.

Some funds, for example, have partnered with real estate developers in Portugal as well as elsewhere in Europe, building diversified portfolios of income-generating rental assets, instead of a single asset.

These private real estate funds are regulated by the Portuguese Securities Market Commission, Comissão do Mercado de Valores Mobiliários (CMVM), and qualified to host PGV investors.

They are usually closed in nature and the investment is locked in for about 7-8 years.

The exit strategy is generally the sale of portfolio assets, which is based on the thesis of a strong capital appreciation expected in real estate in the region over the next few years.

Most of the investment via the Golden Visa route has targeted prime real estate along the Portuguese coast, prompting the Portuguese parliament to approve a measure in February last year limiting the issuance of Golden Visas in those countries. areas, including in the cities of Porto and Lisbon.

While this measure was to enter into force from July 1, 2021, the government has decided to extend the deadline for a few more months until January 2022.

The minimum investment amount for the private investment fund path to obtain a PGV will also increase from € 350,000 to € 500,000 in January 2022.

These developments have led to a rush to invest in funds as well as prime real estate in Lisbon and Porto, with potential investors trying to make the most of this window of opportunity, especially after a slight lull. due to the pandemic.

Because of the many nuances involved in the process, most families prefer to work with consulting companies to smoothly navigate changing regulations, identify the right investment path, and have expert guidance along the way.

With proper advice and planning, families can easily establish a second residence in the beautiful Iberian Peninsula.

(Shilpa Menon is Senior Director, India – LCR Capital Partners)


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