Golden Visa scheme bogged down by red tape and queues
Portugal’s Golden Visa scheme, the government programme which helped kick-start Portugal’s ailing property market from 2013, seems to be stuck in the mud.
The Authorisation for Residency for Investment (ARI), which so far has raised just over €4Bn since its introduction in 2012, is suffering from interminable waiting lists of 10 months and mountains of red tape at the immigration office – SEF (Serviço de Estrangeiros e Fronteiros).
Bureaucracy and the inherent complexity over the different amounts demanded for the various
types of investment, coupled with unresolved questions over what rights investors have on Portuguese national territory, are driving potential investors away. An example of an issue surrounding rights is if holders can study in another country in the European Union.
The scheme, rolled out by the then Deputy Prime Minister, Paulo Portas, is aimed at non-European Union nationals who in return for a minimum €500,000 investment (usually in property) get a residency card and the right to apply for Portuguese nationality after five years, a period in which they must retain or maintain their investment.
But since the scheme was unveiled, many, particularly on the Portuguese political left, have questioned if, now the property crisis is over, the scheme is bringing any tangible advantages to the Portuguese economy in terms of company and job creation.
The number of investors, particularly Chinese, has slowed over the past two years, largely because other investment scheme such as Cyprus are seen as more competitive and lucrative for the agents in China who can pick up greater commissions from the rival scheme.
In addition, Portugal actually has one of the strictest regimes compared to other similar schemes operating in Europe including Malta, Cyprus and Spain.
According to the latest information published about applications for Golden Visas in the first half of 2019, the number of requests has fallen 26% in relation to the same period last year.
According to information obtained from potential investors, mainly Iranian and Pakistani, the desire to invest in Portugal diminishes when they learn that after investing €500,000 on a property, they then have to wait around 10 months to see if their initial application has been accepted for process or deferred.
And if that waiting list wasn’t enough, they have to then wait a further month after having paid around €5300,00 for each residency card which is issued by the Casa da Moeda (The Mint).
It is also understandable that numbers are falling when in Spain the waiting time is just one month, while in Malta the investor gets almost immediate citizenship.
Then there is the question of whether the scheme still serves the Portuguese economy now that the property market has recovered?
The truth of the matter is that the overwhelming majority of Golden Visa applicants opt for the property investment option. Of the 7,583 authorisations of residency granted to 31 June, 2019, 7150 were through property acquisition, 417 through capital transfer, and only 16 by creating 10 jobs or more by starting up a company or investing in one.
And in terms of the type of investors coming to Portugal, 4291 are Chinese, 764 are Brazilian, 347 are Turkish, 299 from South Africa and 263 Russians.
According to statements from Augusto Santos Silva, the Portuguese Foreign Minister, the process and issuance of Golden Visas to Iranian citizens have been suspended with the question of whether the Portuguese State will be legally or financially responsible for the losses and inconvenience suffered by Iranian citizens.