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Regulations Governing Golden Visas Will Change in Favour of Rehabilitation

6 November 2018

In order to strengthen investments in rehabilitation and the interior of the country, the Portuguese government revealed that it would revise the rules governing golden visas. Contrary to what the Left Bloc political is demanding, António Costa’s socialist government is refusing to end the program, which grants residency to foreigners who invest in Portugal.

Golden visas are a “useful” but limited instrument and should serve to capture investment in “strategic areas” for Portugal, the Foreign Minister stated on Monday in response to questions from the PSD and the Left Bloc.

“The residence permit [golden visas] program is useful, but it has a specific place,” Augusto Santos Silva told the Lusa news agency during a debate on the subject at a joint hearing by the parliamentary committees on Budget, Finance and Administrative Modernisation and on Foreign Affairs and Portuguese Communities.

The minister stated that the program had attracted four billion euros worth of investments in six years. That figure is considered to be relatively small in comparison to the one billion euros of investment captured this year only by the Portuguese Agency for Investment and Foreign Trade (AICEP).

Santos Silva was responding to the Social Democrat deputy, Virgílio Macedo, who saw the program as “a success,” asking if he had any “ideological” need to end it. The foreign minister also addressed Pedro Filipe Soares, a deputy from the Left Block, who questioned “the AICEP’s prominence in real estate investment and criticised the” brutal increase” in real estate speculation.

The real estate sector benefitted the most from the golden visa program

The minister stated that the program had proved its usefulness in raising investments in the real estate sector, adding that it had also had a positive impact by “favouring construction and generating employment.” On the other hand, he said, golden visas have also attracted capital, albeit on a smaller scale, which is considered important given “the [elevated] level of decapitalisation” of the Portuguese economy stemming from its low rate of savings.

Santos Silva argued, however, that the program had failed to meet the expectations for it regarding “support for productive investments that generate employment.” “Over the six years of the program, we have award just 12 residence permits due to the creation of at least ten jobs,” he said.

“Therefore, as Prime Minister António Costa has already stated, we are committed to the re-evaluating and possibly revising the golden visa program,” Santos Silva said, adding that the government would not eliminate the program, but rather ” improve, redirect and correct it.”

Reorient support from favouring simple acquisitions to rehabilitation

The minister mentioned the possibility of attracting investment “to more critical areas,” such as the rehabilitation of real estate throughout the country while de-emphasising acquisitions, “whose effect on… prices is evident.”

The government will also look at “supporting productive investment, especially in the interior, and coupling it with other incentives for investment, such as in the cultural area for example.” Insisting that the program is of limited scale, the minister lamented that the fact that critics see the program as selling “Portuguese nationality”, categorically rejecting the contention that residence permits give holders the right to Portuguese nationality. “So, the idea is to maintain the program, while improving it, because our policy is one of incrementalism, ensuring predictability and small improvements to the instruments at our disposal,” he concluded.

Original Story: Idealista

Translation: Richard Turner