Investing at least €280,000 in real estate used to be the go-to option for most Golden Visa applicants. But it was discontinued in late 2023. The two most popular options right now are business investments that create new jobs and buying eligible capital or investment fund units.
Let’s take a look at what each investment option brings to the table.
Business Investments
To qualify through business investments, Portuguese Golden Visa applicants have two choices:
Invest €500,000 in a new or existing Portuguese company and create at least 5 jobs.
Establish a company and create new full-time jobs (investment amount unspecified). Job creation requirements specify either 10 new full-time positions or 8 in low-density areas.
The company must operate as a PLC or LLC. The investor can be the sole owner or co-owner, with co-owners also eligible for the Golden Visa.
Buying Investment Fund Units
Applicants can invest a minimum of €500,000 in eligible Portuguese venture capital or investment funds, excluding real estate. The fund's maturity must be at least five years, with 60% of investments allocated to commercial companies headquartered in Portugal. Annual yields typically range from 3-10%.
Investment Fund: Better for Passive Investors
The investment fund option suits individuals preferring a hands-off approach. You can leave specialists to do most if not all the heavy-lifting. Investors hold units for at least five years and receive a share of the fund's profits, with full return possible in six to ten years.
Business Investment: Better for Hands-on Entrepreneurs
Business investments are ideal for an investor looking to get residency and or establish a company within the EU and cultivate global partnerships. This option is more suitable for applicants planning to relocate to Portugal and manage the business locally.
Costs, Fees, and Expenses
Regardless of the investment choice, applicants face additional costs. These include standard application fees, cost of residence permit card, health insurance, and taxes.
For investment funds, there are entry commissions up to 7.5% and annual profit commissions of 0.5-3%. Investment income is tax-free for non-residents, and taxed at 14% for residents.
Business investments may require higher capital (€1,500,000+) and are subject to corporate tax (21% mainland and 14.7% Madeira/Azores). The VAT is 6-23% for the mainland and lower in islands.
Additional Documentation
Investment funds require proof of unit ownership, a declaration from the holding company, maturity, and 60% investment in Portuguese commercial companies.
Business investments require company registration certificates, proof of share capital, and employment register certificates, and social security. The share capital should be equal or exceeding €500,000.
Which Investment Option is Right for You?
The suitable investment option depends on your goals and involvement preferences. Investment funds are better suited for passive investors, while business investments cater to hands-on entrepreneurs seeking to establish a local presence in Portugal.