Portugal Golden Visa: Investment Fund Route Explained
Portugal is a lovely country with a temperate temperature, delicious food, and friendly locals. As of 2024, 12,497 families from all around the world were able to enter Europe using the Golden Visa program.
Portugal Golden Visa investing Funds are an investing strategy that has been increasingly popular recently for obtaining residency in Portugal.
The Portugal Golden Visa program was modified by the Portuguese government in late 2023 to only apply to venture capital and private equity funds based in Portugal that are not directly or indirectly involved in real estate.
The €500,000 investment route in venture capital Portugal funds offered by the Portugal residency by investment program will be examined in greater detail in this article.
Portugal Golden Visa Program Guide 2025
A Golden Visa is a type of resident visa that is granted in Portugal in return for a qualified investment. The candidate must be a Swiss or non-EU-EEA national with no criminal history.
In October 2012, the Portuguese government launched the initiative. More than €7.2 billion in foreign direct investment had been brought to the nation as a result of the initiative as of 2023.
What Is Portugal Golden Visa Investment Fund?
On August 28, 2017, Portuguese Law No. 102/2017 was amended to include the investment fund path for the Portugal Golden Visa. The relevant section of the law is as follows:
"A capital transfer of at least €350,000* for the purchase of units of investment funds or venture capital Portugal fund of funds dedicated to the capitalization of companies, whose maturity at the time of the investment is at least five years, and at least 60% of the investments are realized in commercial companies with head office in the national territory (1)."
*Take note that on January 1st, 2022, the sum was increased to €500,000.
Golden Visa Portugal Investment Fund: Who Can Invest?
The candidate must first fulfill the prerequisites for the Portugal Golden Visa program in order to apply through an investment fund. This entails having a spotless criminal record and not being a citizen of the EU, EEA, or Switzerland. Some investment funds and their management firms may have extra standards in addition to these set by the government. These frequently call for the candidate to exhibit knowledge of investments by demonstrating familiarity with financial products, such as stocks, bonds, or other funds. Additionally, applicants might be required to demonstrate that they have enough money and to explicitly state where those monies came from legally.
Can US Citizens Invest in Portuguese Investment Funds?
Yes, a US person can apply for a Portugal Golden Visa by investing in an investment fund.
Foreign financial institutions and some non-financial foreign businesses, however, are required by the IRS to report on the overseas assets that their U.S. account holders own. This implies that any Portuguese bank, fund, or fund manager with an American customer or investment must adhere to strict regulations put in place by the US government.
Because of this, certain banks and Portugal Golden Visa funds are reluctant to cooperate with US-citizen investors. In any case, there are Portuguese funds and banks that take Americans.
How to Exit Your Investment Fund
Minimum Time Spent in Lock-Up: Contractually, the majority of Golden Visa-eligible investment funds will ensure that they do not dissolve within a minimum of six years. In a sense, this guarantees that your investment will remain valid for the duration required to apply for Portuguese citizenship.
One thing to look for in the investment fund for the Golden Visa path is this collaborative approach. However, it doesn't stop there. The following factors should also be evaluated and questioned.
Resale or Transfer of Participation Units: The majority of Portuguese investment funds permit participants to sell or transfer their participation units to one another. However, unless it is at the time of fund formation, it is usually hard to find a demand for a participation unit in a fund that is designed specifically for Golden Visa timeframes.
Because of this, investments in these funds are not very liquid until the fund management dissolves it. By providing a buy-back of their participation units at a specific discount, some funds circumvent this problem.
Extension Periods: Funds frequently have a specific exit target with regard to timing.
It is fixed at six, eight, or 10 years by several Portugal Golden Visa investment funds.
However, most of the funds contain optional extension periods that can be activated at the fund's maturity date. The fund managers, not the investors, make the decisions about optionality. This implies that you can be detained for longer than is necessary to submit an application for Portuguese citizenship. Checking with the fund is the best option.
Exiting the Market
The majority of Portuguese Golden Visa funds ultimately aim to sell the portfolio at a profit in order to quit it. With a performance fee based on a proportion of the value growth, the majority of fund managers have strong incentives. This is advantageous since it indicates that their motivation is in line with the investors'.
But keep in mind that they are dividing your profit—not your possible loss. Therefore, you bear all the risk of the downside.
