What's going on with the Golden Visa in Portugal ?
First, what is the Golden Visa in Portugal?
The Golden Visa, or residency by investment program, is an investment program where you invest 500,000 in a Portuguese fund and get residency. You don't need to move to Portugal and only need to be in the country on average 7 days a year. It gives you all the rights of a resident, including access to healthcare, higher education and free movement within the EU.
It also give you the right to apply for citizenship within 5 years. Or at least it has until now.
So what's going on?
Two things are happening - two things, unrelated to each other - general immigration issues and specific golden visa issues.
First, general immigration issues - in Portugal, like many other countries, there is an immigration problem. The immigration population increased rapidly in the last few years and this led, like in other countries, to demands by the population to control immigration. The far right party Chega has been rising and the moderate right government is trying to respond.
One of the main issues that come up is citizenship. The government believes that 5 years to nationality is attracting unskilled labour to the country only to receive passports and then leave.
It is very important to understand that when the government and the population talk about immigration, they are NOT talking about Americans, or British people, or people from the EU. These are a tiny fraction in absolute numbers and are generally seen as positive by this administration. There are people in Portugal who are worried about the side effects of "rich" immigration and accuse expats, for example, for rising prices, but that is NOT what this government believes or what is driving these changes. These changes are about addressing low-skilled immigration, with the wealthier group being more of a collateral damage that hasn't been fully thought through.
The second issue is specific to Golden Visa - this program used to be fast and efficient but starting in the pandemic times, it was managed very poorly and led to unreasonable and honestly unacceptable delays. So people who applied for Portuguese Golden Visa are pretty upset already and now with the nationality changes, they are shouting that it isn't fair, and they are correct.
What are the proposed changes?
The law as it has been passed in parliament is changing the citizenship period from 5 to 10 years and the beginning of the count from first application to residency card. The ruling coalition offered no protection to people who already applied for residency, arguing that residency and citizenship are two isolated and unrelated issues.
Constitutional challenge
After a law passes in Parliament, it is normally for the president to either sign the law, reject it or send it to the constitutional court for constitutional review. However, in this case, the main opposition party, which is the socialist party, applied a rarely used mechanism and informed that they will send the law to a constitutional review. The first press releases about this suggested that they did not highlight the absence of grandfathering in their court referral but in a press conference yesterday it has been confirmed that the court referral today DOES require that the court considers the absence of the transitional regime, the method of counting and other issues.
What happens next?
Now, the court has until the middle of December to issue its opinion. If the court finds the law to be constitutional, that's the end of the game.
If the court finds it unconstitutional, it goes back to Parliament. Parliament can overcome constitutional challenges with a strong 2/3 majority, but that's unlikely. The likely outcome is removal of non-constitutional provisions.
I believe that the constitutional argument against this reform is very strong and that the court will knock out the bill. This is of course no guarantee, but this is my view for 3 reasons:
First, the court recently intervened in the foreigners law and knocked out nearly all of it, for similar reasons.
Second, the change of count to counting from residency card issuance is very unfair. It gives the authorities a de-facto right to slow down access to citizenship by slowing down processing. People should not be punished due to incompetence of the authorities and this touches on many protected fundamental rights in Portugal and the EU.
Third, the authorities say that the residency and citizenship are unrelated laws but the authorities themselves changed the processing time in the past to start from the application for residency to compensate people for the administrative delays, so they already tied the two issues together.
Last chance to get in under the old rules
Portugal is the ONLY country in the EU offering a path to an EU passport without actually moving to Portugal. Until now, this was combined with also the fastest count to citizenship.
It has been the best Golden Visa package in the world and also therefore the most popular one.
We already know that this is ending. After it ends, Portugal will still offer one of the best residency program and still the only one offering a path to citizenship without actual presence, so it will still be very attractive, but not like it is now.
People applying before the law changes will still have a very realistic possibility at obtaining the citizenship in 5 years. It's the absolute last minute to get the absolute best package.
So if you are positively considering Golden Visa, we are strongly recommending that if you are to do it, do it now.
Finally, in the last month, it seems that the processing delays have been resolved and all applicants are now invited to appointments, so not only you may benefit from the old rules, you might have a chance at a rapidly processed GV application.
There will be a link in the bottom for more information about our own Golden Visa services. Please do get in touch for more details.
