The Portuguese Golden Visa program has gained immense popularity among global investors looking to obtain residency rights in Portugal and the EU. One of the investment options under this program is to invest 350,000 EUR in a qualifying Portuguese investment fund. In this article, we will provide a comprehensive overview of the Portuguese golden visa investment fund route, including the application process, required investment amount, fund types, approval and regulation, and pros and cons compared to real estate investment. With prudent due diligence and selection of reputable fund managers, the fund investment option offers a more hands-off and diversified approach to obtaining residency in Portugal through passive investment.
Legal Basis for Fund Investment Under Portuguese Golden Visa
The legal basis for the Portuguese golden visa fund investment route is Article 3(4) of Law No. 102/2017 and Normative Order No. 5765-B/2017. This law allows non-EU investors to invest a minimum of 350,000 EUR in a qualifying Portuguese investment fund to obtain a Portuguese golden visa. The fund must invest in companies based in Portugal and have a maturity of at least 5 years at the time of investment. At least 60% of the fund’s investments must be made in Portugal-based companies as per the specifications.
Regulation and Oversight of Portuguese Funds
The Portuguese Securities Market Commission (CMVM) is responsible for regulating fund managers and the funds themselves. The Bank of Portugal (BdP) also exercises oversight by ensuring the safety of assets held by depository institutions. These strict regulations provide assurance to investors regarding compliance and help mitigate investment risk. Reputable fund managers will have all required licenses and registrations.
Pros and Cons Compared to Real Estate Investment
The fund investment route offers several advantages compared to directly buying real estate. The lower investment threshold of 350,000 EUR provides more accessible entry. It is also more hands-off and does not require ongoing property management. The risk is diversified across multiple holdings within the fund’s portfolio. However, funds tend to be less tangible than physical real estate and have a lock-in period. Investors should weigh these factors carefully when deciding between the two routes.
Due Diligence Process for Selecting Investment Funds
Since funds can vary significantly in strategy and risk profile, proper due diligence is critical before selecting a fund investment. Factors to evaluate include the fund manager’s track record, investment policy statement, holdings, risk management policy, transparency and reporting, and compliance with regulations. Reputable third-party due diligence reports provide immense value during this process.
Application Process for Golden Visa Through Fund Investment
After selecting a qualifying fund, investors transfer the required capital and obtain proof of investment. They can then apply for the golden visa by submitting the application and documents to Portugal’s immigration authorities. Biometrics are captured during a required in-person visit to complete the application. If approved after background checks, investors obtain a renewable 2-year golden visa. Permanent residency can be obtained after 5 years.
In summary, investing 350,000 EUR in a qualifying Portuguese fund provides a regulated and diversified route to obtain EU residency rights under the golden visa program. Proper due diligence and selection of reputable fund managers can help mitigate risks. For investors seeking a more passive investment option with lower capital requirements, the fund route offers an excellent alternative to directly purchasing real estate.