Portugal's Golden Residence Permit Programme (GRPP) was introduced in 2012 in the context of serious economic travails.
Portugal’s Golden Residence Permit Programme (GRPP) was introduced in 2012 in the context of serious economic travails.
In the 2009-16 period, Portugal’s declining GDP was compounded by high unemployment, soaring government debt, and high bond yields. As the credit crunch took its toll on the economy, compounded by the strict fiscal conditions of EU membership, Portugal’s national debt rose above the 60% limit that Maastricht criteria stipulated.
In 1998, government debt per capita was EUR5,443 per capital, but by 2010 it had tripled to EUR15,115.€¨With PM Pedro Passos Coelho in desperation urging the unemployed to consider emigration to Brazil or Angola, where at least language was no barrier, things were looking bad for the Portuguese economy.
Today, by S&P Ratings’ yardstick, Portugal has escaped five years of “junk” sovereign borrower status, having successfully managed a EUR78 billion international bailout programme. The government continues to pursue an effective belt-tightening program to shrink the once-bloated 130% debt-to-GDP ratio.
As a result, Lisbon is no longer on the EU’s excessive deficit procedure (EDP) list of member states consistently breaching community budget rules. The local economy is demonstrably in recovery mode, having returned to growth. For 2017, GDP rose 2.7%, trouncing 2016’s 1.5% with its best performance in 17 years.€¨The OECD forecasts growth remaining above 2% this year and the next.
…and some economic alchemy.
In 2012 the government introduced GRPP, an investment incentive scheme of wider stripe, known colloquially as the “Golden Visa.” Billed more as a lifestyle choice, it offers a long-term ‘plan B’ for investors and their families in an unstable world. It applies to all investments made after October 8 2012.
What’s to be had?
In short, a Golden Visa immediately provides investors free access to the vast economy of the Schengen area, including unlimited travel. It also provides the potential for a life change to those shelling out EUR500,000 on a property with the prospect of permanent residence after five years and citizenship after six. While most investors to date seem to have taken the property route, the scheme is far more comprehensive in scope. A golden visa awaits those who commit EUR1.0 million in capital, or create 10 jobs in Portugal.
In fact, the scope of the Golden Visa program has been strategically expanded to feature additional investment options. Thus, aside from property purchases of over EUR500,000, those exceeding EUR350,000 are valid where properties are more than 30 years old, or located in urban renovation zones. The goal here is to expedite urban renewal.
As for targeting investment diversification, other qualifying steps are general fund transfers of above EUR1,000,000, of above EUR350,000 for R&D projects, above EUR250,000 for artistic or cultural activities, and over EUR500,000 for the capitalization of SMEs.
Data from 2014 reveals that since inception the government had issued 734 Golden Visa, generating over EUR440 million. Notably, 578 had come from China. These investors are also reportedly buying into farms and vineyards.
Upon receipt, the Golden Visa is initially valid for one year, and renewed for subsequent periods of two Validity is contingent upon that the holder spending on average seven days in Portugal per year for five years.€¨
Finally, as officials note, Portugal scores well in terms of safety, political stability, and human and property rights. Time to crack the port open?