The Portugal residency by investment program underwent a major shake-up in late 2023, removing real estate investment options. More applicants now opt for investment funds or venture capital funds to obtain Portugal golden visa.
Is it suitable for you? Which funds are eligible? How do you choose? This guide provides answers for prospective Portuguese golden visa holders.
What are Portugal Golden Visa Investment Funds?
Investment funds aggregate capital from investors and allocate it across assets like stocks, bonds or companies. Profits are distributed to investors, minus fund management fees. Most eligible funds are fundo de capital de risco (FCR). These are venture capital or private equity funds. Real estate-related funds are no longer eligible.
To obtain a Portugal resident permit through the golden visa, the minimum subscription for investment funds is €500,000. Your investment will be locked in for at least five years. 60% must be invested in Portuguese companies.
Why Obtain a Golden Visa Through Investment Funds?
The investment fund option may not have the lowest threshold. Making at least €250,000 in contributions toward preservation of national heritage, culture, and art can get you through the golden visa door. However, this option offers a handful of plausible advantages:
Delegated fund management - It is a hands-off investment option. You don’t have to manage the funds, start a business, or do much beyond buying qualifying units.
Higher returns - Most funds deliver decent yields and returns
Diversification - Portuguese law ensure capital venture and investment funds are diversified
Tax benefits - Capital gains and dividends are eligible for tax exemptions, especially for non-tax residents
Regulated and secure investments - Registered funds are highly regulated and secure
Eligible Types of Investment Funds
Venture Capital Funds - They invest in early-stage, high-growth companies before profitability, often in tech, life sciences or clean energy.
Private Equity Funds - They target established companies, acquiring, restructuring and eventually selling for capital appreciation. Expected yields are 7-15% annually.
Mutually Managed Funds - They are overseen by portfolio managers selecting underlying investments across risk/return profiles.
Steps for the Golden Visa Application via Investment Funds
Choose an eligible fund
Appoint a law firm for assistance
Register for a Portuguese tax number (NIF)
Open a Portuguese bank account
Sign fund subscription documents
Transfer €500,000+ to the fund
Provide documentation and biometrics
Choosing the Right Fund(s)
It pays to assess the fund's mandate, strategy, and performance history. You should also look at the management credentials, leverage, and liquidity. Does the fund align with your goals? Diversifying across multiple funds can manage risk.
Fees may include setup costs, ongoing management fees and exit charges. Consider these against potential returns when evaluating investments. Seek expert guidance when selecting funds.