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The Portuguese government has recently announced their intention to join a European clampdown on so-called ‘golden visas’, which offer the wealthy an opportunity to gain permanent residence in Europe in return for investing heavily in the region.
The scheme, known as the ‘Golden Visa’, has been in operation in Portugal since 2012, allowing foreign nationals to apply for residency in exchange for a minimum investment of €500,000 (£438,000). Since its launch, the scheme has attracted considerable amounts of money — €3.5bn (£3bn) worth of investment between 2012 and 2017 — with the majority of applicants coming from mainland China and Russia.
However, Portuguese Prime Minister Antonio Costa has now proposed changes to the programme which will significantly reduce the appeal of the Golden Visa. These changes include increased due diligence checks on applicants and their funds, more detailed disclosure requirements on how investments are managed, and a cap on the amount of money a non-EU national is allowed to invest in a property.
The move follows similar clampdowns in other European countries — including the UK, France and Greece — which have sought to deter wealthy individuals from using Golden Visas to gain residency and access to the wider European economic and financial markets. Critics of the scheme have argued that it amounts to ‘economic migration’ and that there is a need to ensure greater transparency in the process.
For their part, the Portuguese government has argued that the changes will ensure that those investing in Portugal are doing so in an authentic and transparent manner, while at the same time preventing potential money laundering and other illegal activities.
Whether the Portuguese government’s proposed changes will succeed in deterring wealthy individuals from seeking residency in Portugal through the Golden Visa scheme remains to be seen. Nevertheless, the move reaffirms the growing commitment within the EU to ensure greater levels of transparency and accountability when it come to the investment of foreign capital.