EuropePolicy Updates

Portuguese Govt. Yields on Golden Visa Retroactivity and 183-day Presence in Housing Bill’s Final Wording

Hours ago, Portugal’s government published the final wording of the “More Housing” bill, which Parliament will debate in the coming weeks. After two months of uncertainty, the market can breathe a sigh of relief: The final text shows the government has relented on several decisive points.

Following weeks of pressure from industry associations, property developers, constitutional scholars, regional governors, public petitions, and a wide array of other stakeholder groups, the government has concluded by delivering to Parliament a proposal far milder than the draft version of March 30th.

While the bill, if passed, would still terminate the golden visa program, the blow would now be softened in the following ways:

  • No retroactivity
    Originally, the government had proposed a cut-off date for the program starting on February 16th. If adopted, this measure would have voided all applications submitted after this date, of which there are many. Instead, the program will remain open for new applications until new legislation is published. In other words, prospective golden visa applicants will have until the new law is finally promulgated (if, indeed, the bill is enacted) to submit their applications under existing golden visa rules. Indeed, many golden visa applicants who concluded their qualifying investments after February 16th did so only conditionally, including clawback provisions in their sales and purchase agreements.
  • Conversion to D2 visa – but no 183-day requirement
    Initial golden visas that have yet to be issued, as well as existing ones up for renewal, will be converted to D2 (Entrepreneur) visas when they are, respectively, approved or renewed. Crucially, however, holders of these Golden-to-D2 visas will not be subject to the 183-day annual presence requirement that ordinarily applies to the D2 visa class. Instead, the government, in a critically important concession, now proposes to retain the seven-days-a-year regime for these visa holders.
  • Investor visas still available for cultural investments
    In another positive turn, the government is now proposing to allow investment-based residence permits for individuals who invest in support of “artistic production and the recovery or maintenance of cultural heritage.” Such investments will need a stamp of approval from one or more competent authorities, which will serve to verify the adequacy of the investment. These authorities include
    • The Portuguese Agency for Investment and Foreign Trade;
    • The Development Bank;
    • The Agency for Competitiveness and Innovation;
    • The National Innovation Agency;
    • The Office of Cultural Strategy, Planning, and Assessment; and
    • Other authorities deemed appropriate, depending on the subject.

Applicants should proceed “as soon as possible.”

The final text provides that the golden visa program will end on the day the law takes effect. That date, point out Vanessa Rodrigues Lima and Sara Sousa Rebolo of Lisbon-based Prime Legal in a letter to its clients and partners, is likely to be at least 45 days away, in light of what’s known of the Parliamentary agenda.

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Characterizing the bill’s final wording as “a very different approach from the one previously announced,” Lima and Rebolo say it also shows the government’s “receptivity to the pressure and suggestions of the market. In this regard, we believe this proposal brings the necessary security for investors to proceed with their investments and applications, which must be done as soon as possible.”

With the wording of the final proposal now known, they remark, “we believe that investors in a position to proceed should do so immediately to benefit from the regime, as no transitory period was established.”

The bill may still see further dilution during Parliamentary discussions, the two highlighted in their letter, where market pressure may be brought to bear to encourage the adoption of a transition period.

“This is great news,” says Magwind’s Madalena Monteiro in reaction to the bill’s final wording. “The government was sensitive to our claims. We applied so much pressure that they heard us.”

“Circumstances considered, and within what was possible, this is excellent news,” commented Pedro Catão Pinheiro of Next Lawyers Gali Macedo & Associados. “Now I can go to bed and sleep in peace.”

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