So, you’re thinking about getting a Golden Visa in Portugal, and you’ve heard talk about the investment fund route and you’re wondering if it’s right for you. But where do you even begin your research?

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It’s quite a challenge to grasp all the important nuances, even for those researching Golden Visa eligible funds for a while. For the newcomers, it can be pretty overwhelming to learn the ins and outs of a foreign country’s financial system and make sense of the various investment fund options. This article is our most complete guide on this topic, and it should give you a good starting point to continue your analysis.

We were the first independent site who started writing about the Golden Visa investment fund route and did the required digging to list (and update) the eligible funds. Yeah, you read that right—there’s no official list you can look up to even know which funds are eligible.

Don’t worry, we’ll come back to the specific “venture capital” funds you can invest in for a Portuguese Golden Visa—but first let’s take a step back and give you the required knowledge to understand the options.

If the whole Golden Visa topic is new to you, check out our Portuguese Golden Visa guide to learn more about the process and other eligible investment options.

Eligible investment funds for Portugal’s Golden Visa

Which investment funds qualify for the Portugal Golden Visa?

The law defines the investment funds route to Golden Visa as follows:

Capital transfer of the amount of 500 thousand Euros, or higher, for the acquisition of units of investment funds or venture capital fund of funds dedicated to the capitalisation of companies, capital injected under the Portuguese legislation, whose maturity, at the moment of the investment, is, at least, of five years and, at least, 60% of the investments is realized in commercial companies with head office in the national territory.

Based on this, four essential conditions need to be met to qualify for the capital transfer path for Portuguese Golden Visa:

  1. The fund needs to be approved and regulated by CMVM (Portuguese Securities Market Commission)
  2. 60% of the fund’s capital must be invested in companies with headquarters in Portugal.
  3. The investor has to buy fund units for a minimum of €500,000.
  4. The investment needs to be kept during the whole Golden Visa process until permanent residency or citizenship is acquired, which takes at least 5 years (in reality, often 6-7 years).

Currently available funds for Portuguese Golden Visa

We have kept this list of Golden Visa-eligible funds continuously up to date as new funds get approved and older ones reach their subscription deadline or target amount.

In addition, we have met personally or via video call with all of the fund representatives to do some basic due diligence from our side. However, we are not financial advisors or lawyers, so make sure to also do your own research and consult professionals when necessary.

Pela Terra Farmland

Invests in undervalued farmland, analyzed collaboratively with future tenants to secure rental income from day-of-purchase. Converts land to certified organic.
Minimum investment: €100,000 · Duration: 7+ years · US Persons: OK! 🇺🇸 · Subscription deadline: December 31, 2022 ✅

Learn more about Pela Terra Farmland

Gaia Investment Fund

Acquires, develops and manages wine and cork production companies to improve their businesses in terms of sustainability and profit.
Minimum investment: €150,000 · Duration: 8 years · US Persons: OK! 🇺🇸 · Subscription deadline: September 2023 ✅

Learn more about Gaia Investment Fund

Optime Growth Fund

Develops and manages high-quality hospitality and residential real estate in unique locations.
Minimum investment: €500,000 · Duration: 8 years · US Persons: OK! 🇺🇸 · Subscription deadline: August 2022 ⚠️

Learn more about Optime Growth Fund

Hospitality Expansion Fund

Focused on acquiring undervalued hospitality assets, fix them through physical and management intervention, and exit them as premium high margin operating assets.
Minimum investment: €200,000 · Duration: 8 years · US Persons: OK! 🇺🇸 · Subscription deadline: December 2022 ✅

Learn more about Hospitality Expansion Fund

Prima Europe Fund

Branded residence concept that provides partial downside protection and a hybrid exit (with the option to become property owner at the exit).
Minimum investment: €200,000 · Duration: 8 years · US Persons: OK! 🇺🇸 · Subscription deadline: June 2023 ✅

Learn more about Prima Europe Fund

Self Storage Fund I

Investing in self-storage, the most resilient asset class in real estate.
Minimum investment: €150,000 · Duration: 7+ years · US Persons: OK! 🇺🇸 · Subscription deadline: December 2022 ✅

Learn more about Self Storage Fund I

BlueCrow Growth

Diversified real estate, incl. industrial, retail, hospitality, predictable yields.
Minimum investment: €52,500 · Duration: 7 years · US Persons: OK! 🇺🇸 · Subscription deadline: December 31, 2022 ✅

Learn more about BlueCrow Growth

The Impacto Fund

Diversified real estate (residential, retail, office and student residences), structured with focus on capital preservation for investors.
Minimum investment: €350,000 · Duration: 8+ years · US Persons: OK! 🇺🇸 · Subscription deadline: December 31, 2022 ✅

Learn more about The Impacto Fund

Navigator II

Real Estate development projects in central Lisbon.
Minimum investment: €100,000 · Duration: 7 years · US Persons: OK! 🇺🇸 · Subscription deadline: December 31, 2022 ✅

Learn more about Navigator II

Iberian Student Living Fund

Real estate developments of purpose-built student accommodation in the underdeveloped sector in Iberia.
Minimum investment: €150,000 · Duration: 9 years · US Persons: OK! 🇺🇸 · Subscription deadline: May 2023 ✅

Learn more about Iberian Student Living Fund

CERES I

Invests in the food and retail industry, mainly supermarkets and fast food chains
Minimum investment: €100,000 · Duration: 10 years · US Persons: OK! 🇺🇸 · Subscription deadline: December 31, 2023 ✅

Learn more about CERES I

WAGMI Ventures

Portugal’s first crypto fund investing in both digital Web3 assets, as well as building physical real estate infrastructure for this community.
Minimum investment: €100,000 · Duration: 7 years · US Persons: OK! 🇺🇸 · Subscription deadline: December 31, 2022 ✅

Learn more about WAGMI Ventures

MedCapital

Private healthcare sector (hospitals and clinics).
Minimum investment: €150,000 · Duration: 10 years · US Persons: OK! 🇺🇸 · Subscription deadline: December 31, 2022 ✅

Learn more about MedCapital

Check out this page for a full list of funds:

Statistics of Portugal Golden Visa funds route

When we first published our Golden Visa guide in 2018 and highlighted the capital transfer (investment funds) option as something that hasn’t received the deserved attention, no Golden Visas were issued via this route yet. There was very little information available, and only 3-4 funds accepted Golden Visa investors. Since then, the popularity has increased rapidly, with about 10% of Golden Visa residency cards issued under the funds’ category in 2021. And the percentage keeps on growing, being around 15% during the first few months of 2022.

Golden Visas 2019 2020 2021
Total Main Investors 1245 1182 865
Fund Investors 7 48 81
% 0.56% 4.06% 9.36%

Regarding the numbers, these are final approvals, not applications. So keep in mind that it typically takes 6-9 months from applying to receiving the residency card. Due to the backlog with biometrics appointments primarily caused by Covid-19, the applicants in 2021 might even have to wait 9-18 months. Hopefully, the waiting times will soon get shorter again.

Therefore, the statistics don’t accurately reflect the present demand. The application numbers with fund investments in 2021 were definitely much higher, especially considering that the minimum required amount was €350,000 until the beginning of 2022. Based on the feedback of our readers and industry experts, I’m guessing the split between funds and real estate applications might have been even around 50/50. Also, I’m pretty confident that the overall application numbers were higher than in previous years. But since SEF (Foreigners and Borders Service) doesn’t publish information about the numbers of applications submitted, we’ll have to wait at least a year to see this in the official statistics.

Understanding Portugal Golden Visa investment funds

In general, investments funds are defined as a way of investing money alongside other investors that have three main advantages:

  • being able to use professional investment managers aiming to get better returns and more accurate risk management;

  • benefit from economies of scale, i.e., lower costs;

  • increased asset diversification.

In Portuguese, an investment fund in general is called a fundo investimento.

CMVM (Portuguese Securities Market Commission)

The Portuguese Securities Market Commission (CMVM) was established in 1991. Its role is to supervise and regulate the financial instruments market as well as the agents that operate in them and promote investor protection. It’s part of the European System of Financial Supervisors (ESFS). In the US, the Securities and Exchange Commission (SEC) is performing a similar function.

Picture of CMVM building in Lisbon
Photo: Lucian Daniliuc

What is a fundo de capital de risco (FCR)?

The vast majority of funds eligible for Golden Visa investment are classified as fundo de capital de risco (FCR). In English, both venture capital and private equity funds would fall under this classification. It does not refer to risk capital/hedge funds, even though the name sounds similar. You can see all of the FCRs approved by CMVM here. Most of these, however, aren’t eligible, don’t accept Golden Visa investors, or are simply closed for new investors.

How are the FCRs regulated in Portugal?

The FCRs are governed by Law 18/2015, of March 4 (the full English version can be found here) and their management regulations document.

According to law, FCRs must have a minimum committed capital of €1 million to become active. However, a fund can choose to raise the amount of the first close higher if they wish. Once the fund has reached its first close, the status on the CMVM website will be changed from “authorized” to “active”, and the activation date is added (see below). The overall targeted capital by funds usually falls between €20-50 million (with a few exceptions being around €100 million).

Funds activated on CMVM website

A fund is managed in accordance with the rules dictated by its management regulations. It’s a document detailing the investment strategy, fund term, subscription period, unit amounts and prices, arrangements applying in the event of incomplete subscription, complete fees, distribution policy, etc. It will also state the management entity, depository bank, and fund auditor.

It’s usually 20-30 pages long, and all potential investors can request this document to read before subscribing to a fund.

Fund manager vs fund advisor

When researching funds you may come across entities described as variations of fund managers and advisors.

A fund manager is a financial institution registered with the CMVM, whose main objective is to oversee the fund’s investment strategy and activity and make sure everything is compliant with regulations.

The management entities have to perform their activities to protect the legitimate interest of investors and treat them fairly. They are also responsible for drawing up the management regulations.

Having a fund manager is a must to get approval for the fund, but many funds also have a fund advisor.

A fund advisor usually brings expertise in a specific area (real estate, technology startups, etc.). In many cases, they are originators of the idea and overall fund strategy and are in charge of finding the specific investment opportunities. Each investment nonetheless needs final approval from the fund manager.

Types of Portugal Golden Visa funds

Investment funds, in general, can be grouped in various ways (by asset type, investment sector, risk profile, etc.). We decided it makes sense to categorize Golden Visa eligible funds into three groups:

  1. funds focused on real estate,
  2. private equity or venture capital, and
  3. mutual funds.

However, the lines can sometimes be blurry. For example, there are some funds that add a smaller percentage of financial market instruments into their real estate portfolio (e.g., Monarque Portugal L2 and Portugal Strategic Growth fund). Or some real estate focused funds invest a fraction of their capital into companies in other sectors (e.g., Portugal Yield Fund II and EQTY Fund).

Funds investing in real estate projects

The majority of Golden Visa eligible funds invest in the real estate sector. These are not typical REIT funds that own properties directly, instead they invest in companies called SPVs (special purpose vehicles) that acquire and manage real estate. The properties can be residential or commercial or, in many cases, a combination of both. While most funds invest only in Portugal, technically, they are allowed to make up to 40% of investments outside. For example, NEXT, Prima Europe, and Iberian Student Living Fund have some developments in other Mediterranean countries, and CGA Portugal makes part of their investments in the US.

These funds have an average term of 7 years, which is best for Golden Visa investors, as getting PR or citizenship typically takes 6-7 years. Generally, the risk profile is low to medium, focusing more on capital preservation than maximizing possible yield. Most of these funds have also targeted annual distributions to investors averaging around 3%-4%.

There are two main strategies this type of funds apply: focusing on capital gains through developing properties or maximizing rental yields. Many funds also mix these two approaches.

Highlights:

  • Easier to understand for many investors
  • Indirectly own tangible assets
  • A popular alternative to direct real estate investment due to ease of investing remotely and more diversification
  • Typically reasonable downside assuming low leverage (debt financing) in the fund

Things to note:

  • Often the track record of the advisors are more relevant to consider than that of the fund manager, which often means less available objective data
  • It’s important to check the amount of leverage (debt), as a lot of leverage could make the fund much more risky than it seems at first glance

Traditional private equity funds and venture capital funds

Private equity funds invest in companies that are not listed on the stock market. Common sectors are healthcare, industrial, and IT. Their typical strategy is to take a controlling interest in an operating business and increase the value by being involved in a company’s management. It requires a more long-term approach, usually with an 8-10-year term. Typically, these funds have a medium to high-risk profile with a similar expected yield.

Venture capital funds are a subclass of private equity, but they focus on early-stage startups with global potential before these companies become profitable. Therefore, venture capital is riskier but also has a higher expected return. The most typical sectors are tech, life sciences, clean energy, etc. Most of the VC funds in our list are also ESG funds, meaning that they consider environmental, social, and governance factors when choosing their investments (marked with a 🌳emoji).

These funds typically don’t pay out annual dividends; instead, they focus on maximizing return at the exit.

Highlights:

  • Higher potential upside than other fund types
  • Objective track records may be publicly available

Things to note:

  • Typically more downside than other fund types
  • Your investment is typically locked in for longer compared with other fund types
  • Can be difficult to evaluate the funds without industry expertise

Mutual funds

Unlike private equity, mutual funds invest in companies traded on the stock market. The main goal is to beat the PSI-20 index that tracks the performance of the 20 largest national companies by market capitalization (the Portuguese equivalent of S&P 500 index). Since mutual funds invest primarily in the same companies as PSI-20 (with varying percentages), the overall return usually doesn’t drastically deviate from the index.

Mutual funds don’t have a predefined fund term, which means that investors can exit at any time. There’s currently a very small amount of mutual funds that accept Golden Visa investors.

Highlights:

  • More flexible process for entering and exiting the fund (since it’s traded on an exchange)

Things to note:

  • Very few funds to select from
  • Mostly invested in energy and utility companies, telcos, financial services, and former monopolies such as the Portuguese postal services (CTT)
  • Performance of publicly traded companies have historically been weak in Portugal

Portugal Golden Visa investment funds’ fees

Typically, there are fees involved with all three steps: setup, management, and investment exit. However, a few funds have 0% for one of these fees, which could sometimes mean that the others are relatively higher. So, it’s always important to consider the combination of all three.

It’s important to note that—unlike the case for a real estate investment—most if not all fees are not charged on top of your investment, but charged to the fund. This means the fees still reduce your overall return on investment, but they are already baked into the fund’s forecasted returns and won’t necessitate any additional outlays by the investors.

Subscription/setup fee

This is a one-time fee paid together with the investment made into funds. It can be charged as a percentage of the capital invested (usually 1%-5%) or a fixed amount. It covers the fund setup costs and fundraising (marketing, administration, etc.), compliance, KYC, and more. Setup fee is the only fee that can be charged as an extra on top of the €500k investment amount—it depends on the fund. Therefore, it’s worth clarifying in each individual case how the fund representatives charge this fee.

Management fee

The management fee is an annual fee paid by the fund to the management entity, usually calculated monthly or quarterly from the fund resources. Typically, it’s between 1%-2.5%. It covers the overhead costs of daily operations, including salaries for management company personnel, regulatory compliance, and monitoring of the existing investments.

Some funds have a minimum fixed management cost per year, which makes the percentage higher if the fund doesn’t reach its capital target. It’s important to check with the fund representatives how much money they need to raise to achieve the advertised management fee. It’s also not uncommon to initially have a higher management fee while acquiring assets, and it drops during the investment management years.

Performance fee

Fund return is usually the most exciting aspect both for fund managers/advisors and investors. The performance fee is the cut of investment returns that the fund does not distribute to investors. Performance fees vary widely depending on strategy, asset type, and whether the fund distributes annual dividends.

Performance fee often has a hurdle rate, under which 100% of the profits belong to investors. The average hurdle rate for funds in our list is between 3-5% per annum, but it can also be less or more.

The hurdle can be with a catch-up or without. The catch-up means that once the fund return reaches the hurdle rate, all the profits will go to fund representatives until they have received their performance percentage of overall return. After that, the profits are split with investors.

Since it might be difficult to grasp, I’ll give an example. Fund X reached maturity with a 15% total annual return, and they didn’t distribute any dividends. The fund has a 20% performance fee with a 5% hurdle with the catch-up. The distributions at the fund maturity will be paid in the order of the below steps:

1. Return of investors’ capital
100% of investors’ original investments are paid back.

2. Hurdle/preferred return
100% of profits up to 5% IRR (hurdle rate) are distributed to investors.

3. Catch-up
100% distributions go to the fund’s general partners until they’re “caught up” to 20% going back to the first euro of the profits.

4. Remaining distributions/carried interest
The remaining 10% will be distributed 80/20 in favor of the investors.

If a fund has a hurdle rate but doesn’t have a catch-up mechanism, they would skip step 3.

We can also look at how the profits would be distributed at varying levels of return for the same fictional fund:

  Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5
Fund annual return -5% 0% 5% 6% 10%
Investor annual return -5% 0% 5% 5% 8%
Manager* annual return 0% 0% 0% 1% 2%

If the fund didn’t use a catch-up mechanism the results would have looked like this:

  Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5
Fund annual return -5% 0% 5% 6% 10%
Investor annual return -5% 0% 5% 5.8% 9%
Manager* annual return 0% 0% 0% 0.2% 1%

*Manager may here also refer to fund advisor—this varies per fund.

Typical fees for different types of Golden Visa funds

Many private equity/venture capital funds use a typical 2/20 fee structure, which means a 2% management fee and 20% performance fee with or without a hurdle.

Mutual funds’ annual management fees are on average 1.5%-2%. They have a small or no setup fee and generally no performance fee.

Golden Visa eligible funds investing in real estate use a wide range of fee structures.

Questions to ask yourself when choosing a fund

When considering different funds, the first step is to understand what you are looking for and narrow your focus. The below questions will help you get started with this.

  • Which strategy do I prefer? Is capital preservation or maximizing potential return more important? How much risk am I willing to take?
  • Which sector do I want to invest in (real estate, farmland, healthcare, tech companies, wine industry, etc.)?
  • Is it important that it’s an ESG fund?
  • How long can I keep my capital locked in?
  • Do I want to invest only in one fund or further diversify the investment? Some funds require you to make the full €500,000 investment solely into their fund. Others let you acquire units for a smaller amount if you wish, allowing you to split the investment into more than one fund.

Questions to ask fund managers/advisors

Once you have a better idea of what’s important for you, I’d recommend reaching out to request a presentation and set up meetings with funds you’re interested in. I’ve listed some of the questions you might want to ask from the fund representatives.

  • What are the credentials and track records of the fund’s managers and advisors? In case it’s a real estate focused fund, what is the developer track record? Do they have experience with Golden Visa investors?
  • What are the fund’s investment strategy and risk profile?
  • How diversified is the fund (how many companies, real estate projects, etc. does it invest in, and how different are they)?
  • How much leverage do they use for investments?
  • What is the target fund size, and how much have they raised so far? Have they reached their first close? What is their contingency plan if they don’t raise as much funding as expected?
  • How much “skin in the game” do the managers/advisors have (how much have they invested themselves)?
  • What is the expected target return per annum?
  • Does the fund distribute dividends (how often and how much)?
  • What are the fees (subscription fee, management fee, performance fee)? Is the subscription fee additional or included in the investment amount? Does the stated management fee assume a specific fund size (will the percentage be higher with a smaller size)? Does the performance fee have a hurdle?
  • Do they provide annual PFIC information statements (for US investors)?
  • What is the exit strategy for investors? Is it possible to exit before the fund term ends?

Portuguese non-residents are generally exempt from paying taxes from dividends and capital gains in Portugal on fundos de capital de risco funds (unless your fiscal residency is in a country that Portugal considers a tax haven). But, unfortunately, it doesn’t mean that you’re entirely free from taxes as you will have to declare and pay these in the country of your tax residency.

If you decide to become a Portuguese tax resident (with NHR status or without), you’ll have to pay 10% of withholding tax on distributions.

Extra considerations for US investors

US persons are US citizens and other tax residents (either Green Card holders or by Substantial Presence Test). Therefore, they are subject to declaring their income (unless under the minimum threshold) in the US, even if they are primary tax residents somewhere else.

FATCA (Foreign Account Tax Compliance Act)

To work with people with connections to the US, investment funds and banks need to consider FATCA regulations.

FATCA is a US federal law that requires foreign financial institutions to report the assets and identities of US persons to the US Department of the Treasury. It also requires US persons to declare their foreign financial assets annually over a certain amount to the IRS on form 8938.

An important factor to consider is that some FATCA compliant banks will open a regular bank account but won’t offer custodian services to US persons (e.g. Millennium BCP). Currently, we know three banks in Portugal that offer remote account openings and can hold investment fund units for US investors—Bison, BiG, and Atlantico Europa.

Be aware of the PFIC treatment!

The good news is that the majority of Golden Visa eligible investment funds welcome US persons as investors. However, you need to be aware of how so-called PFICs (Passive Foreign Investment Companies) are taxed by the IRS.

A foreign investment fund is considered a PFIC if either income test or asset test is met:

  • Income test—75% or more of the corporation’s gross income is passive income
  • Asset test—50% or more of the corporation’s average assets produce or could produce passive income.

Most foreign investment funds (either private equity, mutual funds, or others) are usually by default classified as PFICs for tax purposes. As a result, these are taxed at the highest federal income tax level, not depending on a person’s overall earnings. At the time of writing, it’s 37%, and both dividends and capital gains from the fund are taxed at that level.

The worst part of PFICs taxation is known as “excess distribution”. It happens when an investor receives a distribution from a PFIC that is significantly greater than usual (more than 125% of the last 3 years average). This is a likely case with a lot of closed-ended funds, as investors receive a share of the profits in the end. IRS will not only apply the usual tax on the “excess”, but will assume this represents unreported distributions in previous years which had not been taxed. Therefore, the IRS adds an interest for late payment on top of tax which can get very costly.

There are two ways to get a more favorable tax rate—a QEF election and the mark-to-market accounting method. Both of these need to be elected on IRS form 8621 starting from the year of acquisition and extending annually. It’s one of the most complicated and time-consuming tax forms, so it’s highly recommended to use an expert for this.

QEF election

The QEF election allows the shareholder to treat the sale of fund units as capital gains rather than ordinary income, taxed at a much lower rate. This is similar to the taxation of US mutual funds, except that dividends are not considered qualified dividends and will be taxed with federal ordinary income rates.

A fund needs to provide an annual PFIC information statement so that investors can make the election. The statement must include the investor’s proportional share of ordinary earnings and net capital gain or enough information to calculate the share for a specific tax year.

Mark-to-market

The mark-to-market accounting method calculates a gain and loss annually to mirror the changes in the value of the fund units. This method is only possible with marketable securities, so only with mutual funds.

The most important things to remember

  • Make sure the Portuguese bank you open an account at is FATCA compliant and that they can provide custodian services to US investors.
  • You need to file IRS form 8621 annually starting from the first year of investment; otherwise, you will likely be subject to high-interest penalties. It’s highly recommended to use a qualified expert for this.
  • It’s best to do the QEF election in the first year and annually after that. (It’s possible to make the election in a subsequent investment year, but it becomes more complicated).
  • Ask if the fund provides a PFIC annual statement—for it to be valid, the statement needs to be issued by the PFIC and signed by the authorized representative. See this article) for more information on what needs to be included in the statement. Thank you to our community member @wkb for sharing this link!

If you’d like to dig deeper into this topic, check out our dedicated forum thread. Also, a Canadian investment firm NEI Investments has provided a good information sheet about PFICs. A shout-out to our community member Larry for highlighting this!

Documents required to apply for the Portuguese Golden Visa via fund investment

General documents required to apply for Golden Visa

  • Passport or other suitable travel documents
  • Evidence of legal entry and stay in Portugal
  • Adequate health insurance (issued at least three months prior)
  • Clean criminal record from the country of residence
  • Document authorizing a criminal records check in Portugal
  • A written statement confirming that the applicant will comply with minimum quantitative requirements and maintain the investment for at least five years
  • A statement from Portuguese tax and social security authorities verifying no debt or confirmation that the applicant is not registered with these authorities

Additional documents required for the investment funds route

  • Statement from a Portuguese financial institution confirming an international transfer equal to or more than €500,000 into a bank account under the name of the main applicant
  • Certificate from a fund manager of the units purchased, free of any liabilities
  • Declaration from the fund manager proving that the fund qualifies for Golden Visa investment (at least five years lifetime, at least 60% invested in Portuguese companies, and a suitable capitalization plan)
  • If the investment is made under a single-member limited company (Sociedade Unipessoal por Quotas), then an excerpt from the commercial registry (Registo Comercial) is needed showing that the investor is the proprietor of the company

What are the advantages and disadvantages of investing in a Portuguese Golden Visa fund?

To evaluate the advantages and disadvantages of fund investments, let’s compare it to the other two main routes to Golden Visa (residential and commercial real estate investments).

Advantages

Diversification

Fund investment offers broader diversification into several companies or real estate projects. There are also rules in the management regulations document limiting the percentage of raised capital in one project. It’s also possible to split the required €500,000 into several funds if someone wants additional diversification.

Choice of industries

Funds invest in various industries, which give a wider choice (real estate, agriculture, early-stage technology startups, healthcare, blockchain, industrial, ESG-focused companies, etc.).

Lower setup costs

Compared to real estate purchases, the funds generally have lower setup charges. For buying real estate, there are costs related to finding a property, legal representation, notary fee, taxes (property transfer tax—IMT and stamp duty). It might be a different case with commercial real estate options, as some developers cover IMT tax themselves, which makes up the majority of the purchase-related costs.

Potentially lower taxes

Fund investment is usually more tax-efficient than a real estate option but it depends on your country’s tax regulations. Portuguese non-residents don’t have to pay taxes on capital gains and dividends from the funds. With real estate, you’ll have to pay various taxes and declare these annually in Portugal.

If you plan to establish a tax home in Portugal the fund route is definitely more tax efficient.

Easier exit

When the fund lifetime is over, there is no need to find a buyer for your investment. It’s the responsibility of the fund manager to successfully divest the assets. Some funds also allow investors an earlier exit if they receive their citizenship/permanent residency before the fund’s end date. Selling real estate takes time and additional spending (agent fees, lawyer fees, capital gains tax, etc.). However, some real estate developers offer a buy-back option to make the exit process easier for investors choosing the commercial real estate route.

Potentially higher return

Many funds target overall returns between 7-10% per annum; typical rental yields from real estate are 3-4%. Of course, we all know that a target is no guarantee, and depending on real estate market prices in the coming years, it may or may not give lower overall returns.

Funds are regulated

CMVM, whose primary responsibility is to protect investors, regulates and approves the funds. They also need to be audited annually by third-party companies. There is no such regulating body for real estate properties, so investors need to rely more on their own due diligence and help of lawyers.

Disadvantages

Potentially higher investment amount

There is no option to invest less than €500,000, like in the case of real estate for renovation projects and/or in low-density areas. If you’re interested in the real estate route, we have created a detailed map and a search tool to check qualifying investment areas.

Lock-in period

The lifetime of some funds is longer than it takes to receive Portuguese citizenship/permanent residency. Therefore, if someone needs to exit the fund as soon as possible, it’s better to choose one with a 6-7-year term than one with a 10-12 year term.

Profit share

In return for having someone else manage the investments, you will have to share the fund’s earnings with its management entities. Having residential real estate will allow you to be solely in charge of the whole process and keep all the profits you make (although you’ll still likely have costs for property management, etc.).

Risk of investment funds not reaching needed capital target

There are currently more than 30 funds that accept Golden Visa investors, and according to some sources, dozens more are in the process of getting approval from CMVM. While it’s good to have a choice, it also poses a risk. Not all of these funds will be able to raise as much capital as they hope from Golden Visa investors—meaning it’ll be hard for the funds to be as profitable as hoped, given that a larger chunk of the investment will be eaten up by management fees. It’s not necessarily a disadvantage in general (at least not for the best funds) but something to be aware of, and it should make one more careful with the due diligence to make sure you invest in a fund that’s raising enough to be profitable.

FAQ

Table of Contents ↺

Which investment funds are eligible for the Portugal Golden Visa?

These are the prerequisites for a Portuguese investment fund to qualify for Golden Visa:

  • it needs to be approved by CMVM (Portuguese Securities Market Commission);
  • 60% of the fund’s capital needs to be invested in companies with headquarters in Portugal.

Here you can see the list of qualifying funds, which we regularly update as new funds get approved, and older ones reach their subscription deadline.

Who can apply for the Golden Visa investment funds option?

Anyone eligible for a Portuguese Golden Visa can also apply for the investment funds category, which means anyone at least 18 years old who is not a citizen of EU/EEA country.

Is it possible to get citizenship in Portugal through an investment fund?

Yes, you can apply for Portuguese citizenship (or permanent residency) five years after you have received your Golden Visa residency permit. To qualify for the citizenship, you have to:

  • keep your invested fund units throughout the 5-year period;
  • spend the minimum required time in Portugal (an average 7 days per year);
  • pass an A2 level Portuguese language test.

How much do I need to invest in a Portugal Golden Visa investment fund?

The minimum investment amount to qualify for the Portugal Golden Visa through fund investment is €500,000.

How did the Portugal Golden Visa changes 2022 affect the investment fund option?

The minimum required investment amount for new Golden Visa applications was raised to €500,000. However, if you applied before the beginning of 2022, the changes do not affect your Golden Visa process.

Should I enlist the help of a financial advisor to choose the Golden Visa fund?

You could if you feel more comfortable that way. Just keep in mind that financial advisors might have a limited list of funds they work with, and typically they receive incentives for referrals, meaning that they may or may not prioritize your best interests. So be careful to make sure the advisor’s incentives align with yours.

Where can I find a lawyer for Portugal Golden Visa?

It’s highly recommended to work with an experienced immigration lawyer to guide you through the initial application and onwards. If you don’t have one yet, here you’ll find some options that our readers have used and recommended for Golden Visa process.

Can I invest in more than one Golden Visa fund?

Yes, it’s possible to split your investment into several funds, and in 2021 there were many successful Golden Visa applications submitted this way. The main benefit is broader diversification, and the downside is more paperwork and potentially a bit higher fees (as some fees may be fixed, not a percentage of the invested amount).

Is it possible to use a company to invest in a Portugal Golden Visa fund?

Yes, but only if it’s a single-member limited company registered in Portugal (Sociedade Unipessoal por Quotas). It can’t be a foreign company, and it can’t have more than one owner.

What happens to my Golden Visa if the fund units’ value drop below the minimum required investment amount?

The fluctuations in the price don’t affect your ongoing Golden Visa application or renewals as long as the number of fund units (which originally cost at least €500,000) remains the same.

Can I change my investment from one fund to another during the required 5-year Golden Visa program period?

I don’t know any specific cases where this has been done, but it’s theoretically possible to move your investment from one fund to another. What matters is that it stays under the same Golden Visa category and that you own the required amount of fund units (as valued by their acquisition cost) at any given time.

What is the best way to transfer money for Golden Visa fund investment?

Our readers have often preferred using Wise or Interactive Brokers over traditional banks for currency exchange and money transfer as these offer faster and more reliable transfers and better rates. If you’d like to research more about different transfer options, check out this forum thread. Even though it’s focused on transferring an investment from the US to Portugal, most of these option are also available in other countries.

Where can I find more information about Portugal Golden Visa investment funds?

You can contact the fund advisors/managers here to receive a presentation about the funds that interest you. If you wish, you can then schedule an introductory call with them.

We also host webinars about Portuguese Golden Visa investment options. You can sign up for the upcoming ones or request a recording for the ones that have already taken place.

Also, feel free to join current and potential future Golden Visa investors in our forum—it’s a good place to get answers to additional questions you might have.

We’d like to say a special thanks to Lucian Daniliuc for taking photos of the CMVM building for us.