To curb the rapid rise in property prices in popular areas of Portugal, the Portuguese authorities have introduced new amendments that may exclude major cities such as Lisbon and Porto from the eligible areas for Golden Visa processing. In the future, applicants who purchase properties worth no less than 500,000 euros in these cities will no longer be eligible for the Golden Residence Permit.
1. Venture capital funds will become a popular option
With the policy changes, fund projects may attract more applicants, which is highly beneficial to the Portuguese economy. By creating added value and attracting corporate capital, these funds contribute significantly to job creation and provide strong momentum for economic growth. The demand for Portuguese venture capital funds will increase significantly. However, compared to high-risk funds investing in startups and high-tech sectors, demand will shift more toward funds with relatively better protection, such as those investing in tourism, retail, commercial space development, food, and real estate.
2. Do not choose the job creation route without careful consideration
Generally, job creation and entrepreneur visas are the most complex investment immigration options. This concept is highly attractive to the Portuguese authorities: limiting the number of investment immigrants while maximizing the benefits from each of their investments. However, for applicants, the difficulty is significant; unless the applicant has prior business experience, achieving success is quite challenging.
3. The Golden Visa policy changes have a significant impact on developers
The true purpose of the Portuguese authorities' policy reform is to hope that all Golden Visa channels become more active, such as capital deposits, fund investments, job creation, and donations. In fact, the market had already anticipated the possibility of such changes, though they appeared sooner than expected. However, such policy changes are not good news for property developers, as there is insufficient time to manage the transition, and such drastic, overnight changes will require more effort than the jobs they aim to create.
1) Property developers must adjust prices
In short, since Golden Visa buyers will disappear from the secondary market in Lisbon and Porto, developers will need to re-evaluate the prices of all properties valued at 500,000 euros or more. Of course, this does not mean there will be no more buyers purchasing properties over 500,000 euros in these cities; demand will remain strong among non-Golden Visa investors from the UK, France, and the United States, who account for the majority of foreign buyers. Furthermore, Portugal's tourism industry is still booming and will continue to drive upward trends in yields and capital gains for favored destinations. Nevertheless, many buyers may put their investment activities on hold, which will lead to increased liquidity risk for current Golden Visa investors.
2) Non-premium residential developers need to be prepared
Developers specializing in Golden Visa buyers may face relatively high risks, mainly because their client base is not diversified but concentrated in the property-based immigration market.