Obtaining a Portuguese Golden Visa By Investing In a Portuguese Venture Capital Fund
Why a Portuguese Golden Visa?
The Portuguese Golden Visa scheme enables non-EU individuals to obtain the right to reside in Portugal for up to five years. This allows them and their family to travel freely to and from the majority of European countries.
A Portuguese Golden Visa can lead to permanent residence and/or Portuguese citizenship and the right to a EU passport at the end of the fifth year of being classified as resident in Portugal.
To qualify for a Golden Visa, an individual must meet and maintain one of a number of qualifying investment options, as specified by the Portuguese Government. One of the investment routes is the acquisition of real estate with a value of at least €500,000.
This has proved popular for a variety of applicants. House prices in Portugal rose 3.3% in the first three months of 2019, compared to the last quarter of 2018; settling at €1.849 per square metre. This is an increase of 17% year-on-year. However, it might be prudent to consider alternative investment options as well.
A Portuguese Venture Capital Fund
Applicants might find it preferable to invest in a Portuguese Venture Capital Fund rather than in real estate. This could provide a more economically stable alternative option to obtain residency and the ability to work in Portugal, if desired.
The advantages of investing in a Venture Capital Fund:
- It provides a lower investment option in terms of the amount required
- It could offer the advantage of a higher return on the investment
- No stamp duty tax
- No transfer tax
The specific criteria for investing in a Venture Capital Fund is:
- A minimum investment of €500,000 in Investment Funds or Venture Capital. The fund must provide capital to companies, with at least 60% of the investment being made in a commercial company with a head office in Portugal.
Portugal Tax Benefits
There are a number of tax benefits associated with investing in a Venture Capital Fund. These include:
- Exemption from corporate income tax.
- Exemption from withholding tax on payment of the capital generated by the fund if the investor is a non-tax resident in Portugal.
- Withholding tax of 10%, on payment of the capital generated by the fund if the investor is tax resident in Portugal.
- 10% tax on capital gains arising from the sale of company shares or the sale of commercial property.
A Number of Individuals Forming their Own Venture Capital Fund
Dixcart has also assisted several individuals to form their own Portuguese Venture Capital Fund. This provides an opportunity for more substancial amounts of money to be raised to undertake various local projects in Portugal. These projects generally include investment in commercial real estate.
Additional Information
If you require additional information regarding the Portuguese Golden Visa or investing in a Venture Capital Fund, please contact Catarina Sardinha in the Portugal office: advice.portugal@dixcart.com. Alternatively, please speak to your usual Dixcart contact.
