For more than a decade, Portugal’s Golden Visa residency-by-investment program has benefited the country and investors looking to move or establish a base there.

But that may all come to an end over the next few years, as Portugal’s Prime Minister António Costa announced that the government is currently evaluating whether they should continue the program or not, telling reporters as an aside to a discussion about the new digital nomad visa:

“There are obviously programs that we are currently re-evaluating, one of which is the Golden Visa program, which has probably already fulfilled its function and which is now no longer justified.”

On a question of whether this would mean the end of the popular program, he continued:

“We are currently evaluating, and when we are evaluating, we are considering all the possibilities. And after the evaluation is completed, decisions are made and the possibilities become decisions.”

In terms of political support, the Golden Visa program has long had its detractors among the minor parties on the left fringes of the Portuguese political spectrum, with the Communist Party (PCP, 6 seats), the Left Bloc (BE, 5 seats), and People-Animals-Nature (PAN, 1 seat) all long having been opposed to the program.

Costa’s currently reigning center-left Socialist Party (PS, 120 seats) has long supported the program, with additional support from the entire right side of the political spectrum (in total 98 seats).

With Costa announcing that his party will re-evaluate their support, the program’s future looks more uncertain than ever.

While the program is quite clearly benefiting the Portuguese economy overall, there has been increasing pressure from the European Commission to harmonize residency-by-investment programs across the EU, which may have contributed to the government now reconsidering their support.

The program is also controversial among the Portuguese population, with many considering it a leading contributor to skyrocketing real estate prices, making cities like Lisbon unaffordable for the majority of Portuguese.

Concrete measures for ending the program have yet to be proposed and voted on in the parliament. However, suppose the Socialist Party changes its position. In that case, we may see a proposal as part of the 2023 budget at the earliest, although several experts point to 2024 or later as a more likely end date.

Costa still stressed that he thinks Portugal should remain open and welcoming to foreigners looking to move to and invest in Portugal, pointing to the recently introduced digital nomad visa as an example of that.

It’s also possible that the program as we know it today gets wound down, only to be replaced by a new program with a stronger focus on job creation and support of innovation, as well as stricter residency requirements in line with the goals of the EU.

What would the end of the program mean for investors?

If you have already applied for a Golden Visa or are considering doing so now, the news of the possible end of the program may leave you worried.

But Portugal has repeatedly demonstrated that they are mindful of those who invest and apply before any program changes.

If the program were to end at some point during the next few years, the following would be quite certain to apply:

  • There would be a prior announcement of at least six months or more, allowing for the completion of ongoing investments and finalization of applications
  • Anyone who submits their application before the end of the program will be grandfathered in, meaning they get to keep their residence permit for as long as they renew it every two years

In recent years we’ve seen this with both the 2022 changes to the Golden Visa program and when the non-habitual residence (NHR) tax-free pensions ended: Anyone submitting their application prior to the changes take effect keep benefiting from the rules that were in place at the time of their application. This seems to be a solid Portuguese legal principle.

Lawyers experts on these matters also back this view up.

“Any amendments of the law have a vacatio legis (a period before the amendments enter into force) thus this would not happen one day to the other. Any new law would only be applicable for new applications and not for the ones that are pending or being renewed,” according to Margarida Torres of the Lisbon-based law firm Prime Legal.

While this enters the territory of speculation, she also doubts any scrapping of the program is imminent. “Considering the war in Ukraine, we have seen very high inflation, which makes Portugal still very interested in having foreign investors boost our economy,” she explains.

Either way, we’ll keep this article updated with any further developments.

Cover image credit: ddzphoto