How to get a Golden Visa equivalent residency in Portugal — for a fraction of the price — in 2022.
Each week, we receive numerous enquiries from successful businesspeople around the world seeking a Plan B for their businesses and/or families. For most of them, getting this box ticked is a pressing priority.
But for almost all of them, the challenge is that they’re still very much involved in the running of an overseas business (or businesses).
They can’t just up sticks and move to Portugal permanently. But given a range of political, economic and social risks in their native jurisdictions, they need a back-up plan in case things go wrong at home.
For the past decade, the only two viable solutions were obtaining a second residency or citizenship via investment (CBI passport programs).
But given that the lion’s share of the countries offering citizenship programs are far-flung Caribbean destinations with high living costs, the latter solution only really makes sense for applicants from countries with “bad” passports, i.e. travel documents that didn’t offer visa-free travel to the EU, UK and other important business destinations.
That leaves EU Golden Visa Programs as the obvious choice for many (and the Portuguese Golden Visa, in particular). Offering low or no minimum in-country presence requirements, these programs offer flexible residency in the EU, albeit at an eye-watering premium.
Having a Golden Residency means that you can effectively come and go as you please. And once you’ve become a resident of either Portugal, Spain, Greece, Latvia or Italy, you get to enjoy visa-free travel across the 26 EU member countries, which is highly useful for business professionals.
Yet again, even for those who can afford to part with €350,000 to €500,000+ excluding fees, taxes and property maintenance fees, the opportunity costs of investing in a Golden Visa property are frequently held to be prohibitive.
The effect has often been that even for people who can and should apply for a Golden Residency, the decision keeps getting put off. Frequently, until it is too late to do so…
We believe in empowering clients to make the right decision for them, rather than selling the most lucrative product to them. That’s why we use the below needs matrix to give clients a sense of their potential options:
As you can see from the above table, there are a LOT of options available — and the reality is that most citizenship planning firms will focus on selling you the product that makes them — not you — the most money.
It is for this reason that you’ve probably only recently heard about the Portuguese D7 Visa Program, while you’ve likely known about the existence of Golden Visas for at least several years.
The reality is that any investment comes with a degree of risk; we’re not trying to obscure this fact.
For example:
If you were to invest in a €350,000 property in Lisbon today, there is the risk that you won’t be able to meet the Golden Visa requirements before the deadline of 31 December 2021, at which point Lisbon, Porto and the popular Algarve region will no longer be eligible locations for investment.
That could see you owning a pricey property in the capital, but not getting your Golden Visa.
Similarly, you could invest either €250,000 or €450,000 in either the North or South of Montenegro, respectively, with the hope that Montenegro will join the EU in a few years’ time.
Yet while you’d enjoy EU visa-free access from the point at which you become a Montenegrin economic citizen, their accession to the EU is not guaranteed, and there is therefore a degree of risk that your Montenegrin passport will not end up being an EU passport one day.
Or, if you were to opt for a Golden Visa on the basis of property investment, there is the risk that your actual rental ROI might not live up to your initial expectations, or that the property may not appreciate in value — you get the picture…
It is for these and related reasons that many prospective applicants are therefore eager to minimize their total capital layout as far as is possible, while still achieving their residency and/or citizenship objectives.
In the case of the Caribbean passport programs, for example, this plays out as follows:
The majority of applicants opt for the donation-based route, rather than investing in the overpriced, frequently poor-quality property projects approved by the Caribbean government offering these programs. (There is, of course, also the material risks associated with owning an offshore property situated in the Caribbean hurricane belt).
For the same reason, Vanuatu’s intention of launching a real estate based investment option may well also prove to be a non-starter: Vanuatu is one of the most at-risk countries in the world when it comes to climate change and tropical storms.
And in Europe, where most of the Golden Visa Programs are based, we have also seen a steady increase in the number of fund-based applicants, and those opting for €280,000, predominantly share-scheme based investments in hotel developments.
Enter the Portugal HQA Visa — the cheapest “Golden Visa” available on the market.
It is at this juncture that the Portuguese HQA Visa Program — a predominantly passive, hybrid business investment with an R&D research component — is both well timed and highly compelling:
Launched in 2019, it offers Golden Visa equivalent, highly flexible residency in Portugal, coupled with an all-in price point of only €175,000, it caters for those exact prospective Golden Visa applicants seeking to minimize their total capital layout while still gaining an effective Plan B in Europe.
Yet while, unlike in the Caribbean, the cost is not a government donation, it is an investment fee. So you should arguably bank on forfeiting this capital in exchange for flexible Portuguese residency, unless of course your new, technology focused enterprise takes off and delivers meaningful ROI (which is a possibility).
What’s more, program approvals for the HQA Visa are typically received within 30 days, compared to the Golden Visa, for which the process is presently taking up to 15 months or longer.
And while making a residential real estate investment in Porto, Lisbon or the Algarve presently carries the risk of you not qualifying for a Golden Visa, the HQA does not carry this risk.
Your €175,000 is held in escrow up until your application is approved, and if, for whatever reason, your application is not successful, the full fee is refundable.
And while the HQA Program is highly suited to applicants seeking to launch a startup or open a branch for an existing overseas business in Portugal, it is not only suitable for these applicants.
The program is also increasingly being considered by prospective applicants who only have a basic new business idea, or simply by individuals seeking to limit their opportunity costs and minimize their total capital layout.
Paying only €175,000 for a Golden Visa equivalent residency in Portugal leaves you with at least an additional €175,000 to invest in opportunities with higher potential returns.
As a simple example:
Bitcoin has been growing by an average of around 200% for the past number of years. Assuming that this trend will continue over the next 5 years… a €175,000 investment in Bitcoin, held for the next 5 years, should give you a far superior potential return on your total investment of €350,000 than you could expect earning a maximum of 3–4% per year from renting out a Golden Visa property.
Furthermore, the HQA Visa’s concierge style, fully managed program packaging means that you can be as actively involved, or as passive an investor, as you choose.
So if you’ve been vacillating about pulling the trigger on your family’s Plan B due to total cost considerations, the HQA Visa Program might be a viable potential alternative.
Legal Disclaimer:
Please note that the above information does not constitute investment advice, and that we are not investment advisors. This article should be treated purely as general information on the topic, and it should not be construed as constituting a solicitation or offer to invest in any securities.
Always seek professional investment advice from a trusted, suitably qualified professional when considering investing in any type of securities.
