Thursday 8 September 2016

Portugal Golden Visa Program: Ideal for Foreign Investors seeking to invest through Real Estate

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The Portugal Golden Visa program has been an ideal program for foreign investors looking for a fast track procedure to attain a fully valid Portugal Residency Permit. The program came into existence in October 2012 and was established by the Portuguese Authorities. Foreign investors opting for this program will be able to gain residency, as well as visa free travel to majority of European countries within the Schengen Zone. It was designed to specifically target high net worth individuals, paving them a path to citizenship in only 6 years.
The Golden Visa Program has been a hit so far, issuing a total of 3,165 Golden Visa permits till date.  Out of the 3,165 permits, 2,457 Chinese citizens have been the recipients of these permits. According to Portugal’s immigration service, during the period starting from January 2013 till March of this year, a further 4,841 permits have been issued under rulings for family reunification.

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The most promising investment prospect for the users of this program has been property. The breakdown of the 3,615 permit clearly highlights that a staggering number of 2,991 permits were issued on the basis of investment in property, whereas 169 permits were granted with regards to transfer of capital, and only 5 for the purpose of generating business activities which resulted in the creation of 10 or more new jobs.  The aggregate volume of investment being injected into the Portuguese economy is €1.92 billion, out of which €1.73 billion has been generated from investment in property.

Boom in Portuguese Real Estate Market

The disequilibrium occurring from high supply and low demand of construction has created a perfect situation for investment in the Portugal Real Estate industry. There has been a hike in the demand for real estate ever since the Portuguese government launched the Investment Benefits scheme in 2013, as well as due to the exponential growth of tourism in the country.

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The Golden Visa program has been one of the major determinants behind the real estate boom in Portugal. The foreign investments injected into the Portuguese real estate market are pretty secure because there has been no sign of a property bubble according to any existing data. Thus, the real estate sector should be considered as a pretty save investment.
Moreover, the boom of short-term rentals has brought new life to the more historical neighborhoods, where old properties are being reconstructed to rent out to tourists. These kinds of properties are the most suited for Golden Visa holders since they most probably will not invest to reside here. A completely refurbished historical area can produce an income of approximately 8 to 12% annually through a daily rental basis.

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All these factors are generating high yearly capital gains for the property investors and are encouraging foreign investors from around the world to consider the Hungary Golden Visa Program. As a result of the country’s demand and supply disequilibrium, especially in places such as Lisbon and Algarve, returns of up to 15% are being generated by main centers on real estate investments. The Portuguese real estate market is a safe haven for investors, providing a safe environment for their money. Furthermore, the current politically stable economy of Portugal also proves to be an encouraging factor for overseas investors.

About the Golden Visa

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Currently, around 97% of applicants of the Golden Visa Program have opted for this program by making an investment in the Real Estate market of Portugal.By applying for a Golden Visa through the real estate investment option,investors acquire Golden Residence Permits by investing € 350,000 in the acquisition of real estate with construction completed at least 30 years ago or located in an urban rehabilitation area, with execution of rehabilitation work OR €500,000 in real estate in Portugal. Each investment must be held for atleast 6 years and cannot be financed by a third party such a bank.

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The Golden Residence Permit Program was specifically designed by the Portuguese government to attract foreign investment into the country by non EU citizens. This program is very simple and flexible, with straightforward and minimal requirements. Residency cards are delivered to investors if successful investments are made; it is as simple as that.
This program is amongst the most famous ones from around the world for a number of reasons. Firstly, successful applicants can obtain the Schengen Permanent Residence immediately, followed by citizenship after 6 years. Secondly, it also has a special regime for non-habitual residents, aimed at attracting foreign investors through very favorable income tax rates, such as the tax exemption program for foreign senior citizens. Thirdly, applicants will be free to travel, live, study and work anywhere in the Schengen Zone. Fourthly, this program also allows the principal applicant to extend the application to dependent family members, such as spouse, children and parents, without any additional investment requirements. Lastly, the period of physical residency required to maintain the permit is also very minimal, just 7 days in the first year and 14 days in the following two years.
For more information on the Portugal Golden Visa Residency Program, please feel free to visit our website Lalani & Associates.

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