One of South Africa’s most popular routes to an EU passport may be coming to an end
Business Tech | 16 Nov 2022
The days of citizenship-by-investment schemes in Europe may be coming to an end, warns immigration specialist, Sable International.
Citing statements from Portugal’s Prime minister, António Costa, earlier in November, the group warned that these types of investment plans’ days may be numbered after he revealed that his administration is re-evaluating its Golden Visa Programme.
Costa said that the programme has likely served its purpose and is no longer justified at this time. Evaluations on the programme are ongoing.
“When you are making an evaluation, you consider all the possibilities. And after the evaluation is completed, decisions are made, and possibilities become decisions. We are currently evaluating whether the golden visas make sense,” he said.
According to Sable, the reason for the introduction of the Golden Visa in 2012 was to support the recovery of the Portuguese economy, especially the real estate sector, following the financial and debt crisis that started in 2007.
“Under this Golden Visa Portugal programme, investors from non-EU countries can obtain Portuguese residency in exchange for a capital investment. Over the last ten years, Portugal has granted 11,180 residence permits to wealthy foreign citizens in exchange for investments totalling approximately EUR 6.5 billion,” it said.
The majority of the funds – primarily from South Africa, Brazil, and China – were invested in real estate.
“Part of the programme’s success lies in the fact that foreigners can invest the entire amount – there is no government contribution – and can obtain residency in an EU country by absence, with only 35 days spent in Portugal over five years. It is also one of the more affordable EU programmes, with qualifying property investment starting at only EUR 280,000,” Sable said.
While the prime minister’s comments have sparked concern among investors, Sable said that even if the Portuguese government cancels the programme, no new legislation can be applied retroactively, and all investors and applicants already registered for the programme and in the middle of the process are therefore protected from the termination of the programme.
“If you are still in the process of finalising your investment, you can be confident that no official end date has been announced and that you can still submit your Golden Visa application to the Portuguese authorities.
“However, we advise you to start the process sooner rather than later, before the programme terminates,” it said.
The group also warned that the move by Portugal may be part of a wider move away from Golden Visas in the European Union.
“The news comes after the EU Commission and Parliament voted in favour of proposed changes imposing restrictions on Golden visas in March 2022,” it said.
These changes include:
- A gradual phase-out of citizenship-by-investment programs for the entire Union by 2025
- Regulatory framework for all EU residency-by-investment schemes
- A new category of the Union’s resources, consisting of a residency- and citizenship-by-investment adjustment mechanism
- Revision of anti-money laundering laws to combat money laundering and terrorism financing
- A targeted revision of the Long-Term Residence Directive
- Preventing harmful residency- and citizenship-by-investment schemes administered by third countries
Sable said the proposed changes are important because they are focused on preventing people that are involved in money laundering, tax evasion, and other crimes, from benefiting from such visas.
“Since its launch in 2012, the Portuguese Golden Visa has been one of the world’s most successful residence-by-investment initiatives, largely due to its minimal residency requirements and flexible pathway to citizenship.
“This is one of the main reasons why the EU Parliament has long criticised the Golden Visa and passport schemes, claiming that they are a shortcut to EU citizenship based solely on financial considerations,” the group said.
While the Prime Minister’s comments may be taken as an indication that the Golden Visa’s days are numbered, no legislative decree to this effect has been issued, nor has the formal termination of the programme been announced.
“If you were considering investing in the programme, there is still time to ensure you don’t miss out,” said Sable.