If you are a South African businessperson who plan on expanding your business enterprise and gain mobility within the Europe-Schengen countries, or simply relocating, an expedited residency status in Portugal through one of its popular residency-by investment program (colloquially called “Golden Visa”) may be your answer.
Why Investors Love Portugal
Once known as Europe’s best-kept secret, Portugal is one of the most peaceful – and beautiful – countries in Europe. Dated back in 2006, Portugal was still a country to be explored with merely 7 million visitors per year. In recent years, this number almost doubled and there has been over 12.8 million visitors in 2018 alone. The internationally acclaimed destination is now a favorite amongst both European and non-European visitors. Amidst the pandemic, this hidden gem will continue to harbor expediential growth in the coming future.
For international tourists, there are many reasons why they love Portugal. Beautiful beaches, blue crystal waves, sunny climate with a Mediterranean flair, and delicious Portuguese egg tarts – it’s no longer a secret why Portugal increasingly attracts tourists, investors, retirees, and expatriates from all around the world.
For Portuguese residents, the country offers a high quality of life, with access to culture, health care and education with a relative low cost. As for operating a business in Portugal, owning a company doesn’t cost you a ton of money and the incorporation is easy. To incentivize business opportunities in Portugal, in 2019 the government has issued a range attractive tax benefits to encourage an inflow of new and direct investments to help Portugal gets back to its feet after the Global Economic Crisis. In addition, non-European international investors and their families can obtain a residency status in Portugal through several investment options and pave a pathway to become a Portuguese citizen after 5 years. The scheme worked, and Portugal has been attracting the wealthier sector from across the globe ever since.
Pathway to Portuguese Citizenship through Investment
As a South African, the idea of a European citizenship with a powerful passport to travel the world, but also the ability to freely live, work, study and do business within all European Union members, sounds very appealing. If you are considering Portugal as an investment destination, a pathway to a European citizenship – or both – the following visas might be worth considering.
Portugal Golden Visa
The Portugal Golden Visa is a residency-by-investment program that qualifies non-EU investors to make a qualifying investment in real estate or an SEC-approved venture capital fund, to obtain a residency permit for investors and their qualifying family members. For the real estate investment options, the investor is required to invest a anywhere between EUR 280,000 and EUR 500,000 depending on the type of property, location and legal framework in place in that region.
For investors choosing to invest though the SEC-approved investment fund option, the minimum qualifying investment is EUR 500,000 with the maturity of at least 5 years.
The perk of the Golden Visa is that investors are only required to reside in Portugal at a minimum 7 days per year, or 14 days per two years. The minimal residency requirement of this program does attract many investors who plan to invest overseas, without the obligation to relocate or spend significant time in-country.
It is to note that for those who do plan on spending significant time in Portugal, they may become eligible in the non-habitual resident tax regime and therefore benefit from tax incentives.
The Golden Visa program allows family members such as parents, spouse and children to qualify as well, and all applicants would be allowed to live, work, and study in Portugal if they desire. Suggesting the investors (and the qualifying family members) meet certain conditions after 5 years, they may opt to apply for either permanent residency or citizenship, subject to a basic Portuguese proficiency.
Portugal Start-Up Visa
The Portugal Start-Up visa requires you to make a financial commitment of at least EUR 175,000 into a business incubator in Portugal, of which EUR 25,000 will be used as the initial capitalization for the venture. For business entrepreneurs who are looking to operate or expend their innovative business in Portugal, a Portugal Start-Up Visa may be your answer.
Similarly to the Golden Visa, the Portugal Start-Up Visa (“SUV”) will allow South Africans the possibility to live, study and work in Portugal. However, it is worth noting that the SUV program does not have any residency requirement, and the success or failure of the business enterprise will not have an impact on the result of the SUV application.
To be eligible for the Portugal SUV program requires the investor to have an existing start-up project or at the very least, looking to begin one. A business plan is required in order to prove the seriousness of the idea. To apply for the program, entrepreneurs must submit their business plan and innovative idea in order to gain the support from a Portugal immigration-approved business incubator for a 3-year incubation period.
Once approved, the Portugal Start-Up Visa will be valid for up to 2 years. After this time, applicants and their dependents may apply to extend this visa for another 3 years suggesting certain conditions are met.
After the initial 5-year period, applicants and dependents can either apply for a renewal of their visa or apply for permanent residence or citizenship, on condition that is evidencing language proficiency of CEFR A2. However, in some cases, the language requirement can be removed at the discretion of local immigration authorities if it is decided that the applicant is trying to contribute to grow the business enterprise and the economy.
Which Visa Suits You?
As a conclusion, both programs are open to South African nationals interested in either investing or expending their innovative idea in exchange of their residency status in Portugal. To answer the question of which one is more suitable for you and your family, we encourage you to discuss with one of our professional so we can better understand your objectives, budget and family composition in order to advise you moving forward.
If you would like more information on the Portugal Golden Visa, Portugal Start-Up Visa, or other residency and citizenship-by-investment programs available, please contact HLG South Africa office at +27 087 109 0725.