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January 7, 2021

Following the announcement last year that Portugal’s highly successful residency by investment programme was removing Lisbon, Porto and the Algarve as property investment options, with the aim of increasing investment in low-density areas, the Portuguese authorities have further announced this will become effective on July 1, 2021.

This amendment to Portugal’s popular Golden Resident Permit Programme, which offers an affordable route to Portuguese citizenship and EU membership, was taken by Portugal’s Council of Ministers under the legislative authorisation granted by the State Budget Law of 2020 (pre-pandemic) and is due to become effective mid-2021 on July 1, with a transitional period imposed until the end of 2021.

Portugal’s Golden Resident Permit Programme, which has been a popular choice for economic citizenship since its debut in 2012 with the programme accruing €56 million in revenues just in the month of July 2020, has seen a particular influx of foreign investors choosing to invest in real estate in capital Lisbon and second city Porto, tourist hotspots where high profits can be achieved from renting the properties to tourists year-round.

This amendment, which removes Porto, Lisbon and the Algarve region as investment areas in the RBI Programme, is an attempt by the government to instead promote the investment of foreigners in low-density regions, and in particular through urban rehabilitation, cultural heritage, activities of high environmental or social value, productive investment and job creation.

This means that investors who want to benefit from Portuguese residency and with it, the freedom of movement throughout the rest of the European Union countries, will no longer be able to invest in the most popular tourist areas, including the cities of Lisbon and Porto, and the southern coastal area of the Algarve.

Currently, there are eight types of eligible investments in the Portuguese Golden Visa programme, including the Green Visa which permits foreigners to obtain Portuguese residency if they invest a minimum of €500,000 in organic agriculture, ecotourism, renewable energy and other environmental projects.

The Portuguese government expects these new changes to the programme to attract more foreigners, but that has been criticism of such changes within the industry and associated industries, believing such changes with have the opposite effect.

Said Luis Lima of the Association of Real Estate Professionals (APEMIP) states: “It was already a mistake when they were announced in the 2020 State Budget, but the decision has become all the more incomprehensible within the context of the pandemic we are living through…”

Portugal’s residency by investment programme

While only offering an indirect route to citizenship (you must invest in property for five years and spend a certain amount of weeks in the country for five years), Portugal’s Golden Resident Permit Programme is a speedy route to residency (2-3 months) and a very affordable pathway to Portuguese and EU citizenship, requiring a minimum financial outlay of €350,000. Investors need to renew the residency permit every two years and spend two weeks in the country every two years.

And when it comes to investing in property, while the main cities of Porto and Lisbon and the popular Algarve coast may not be available for investment comes July 2021 (they still are until then), the options for investment are still wide and affordable with the country offering many older, solidly built and charming properties at affordable prices and in beautiful areas. The cost of living in the country is also low, from property to food, offering one of the best value locations in Europe.

Applicants can now also do a lot of the application process online, due to Covid-19. While previously applicants had to travel to Portugal to meet with a consultant for help in applying for the Golden Visa, the process in 2021 is now digitised (including provision of your Portuguese tax and ID number) and you can apply from the comfort of your home wherever you are in the world.

To find out more, read our Portugal country profile by clicking here