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Golden Visa scheme attracts new investors to Portugal

Wednesday 28th February 2018

Written by Mark Burns, Hopwood House

Portugal has been a tourism hotspot for decades, but now thanks to the Golden Visa Scheme it is proving as popular with investors as it is with holidaymakers.
Portugal is currently experiencing a boom in the demand for its property. Sun, sand and sumptuous food all provides a huge draw to the country, not to mention the rich history and vibrant culture. Portugal also boasts a great safety record and some of the best hospitality in the world, and this all goes a long way to bringing in investors from far and wide.
Golden Visa scheme
The Golden Visa Scheme has been set up to offer a residence permit to non-EU citizens investing more than €350,000 into property or Portuguese investment funds. All the investor needs to do is stay in the country for a minimum of just seven days per year. After six years those investors will also be eligible for citizenship.
The scheme has been brought in to help regenerate city centres through attracting foreign property investment. As the Portuguese market completely stagnated for three years, it was felt that something was needed to kick-start it, and so the scheme began in 2012. It appears to have had the desired effect, as it appears to have grown significantly since then.
The Golden Visa was designed to make it easy for investors by providing full support in terms of legal and tax consultancy services and property management services.
There are also other schemes that allow citizens who have not lived in Portugal for the last five years to relocate their tax residence to the country, benefiting from a 10 year worldwide tax exemption and a 20% flat income tax on anything generated in Portugal.
The perfect destination
Tourism is a lynch pin in the Portuguese economy, and the conversion of residential property into holiday lets increases the hosting capacity of this cosmopolitan nation. This growth has taken place through a combination of low taxation on short rentals and the high potential income that tourists bring.
The Golden Visa Scheme hopes to take the strong appeal of the Portuguese real estate market and give it a further boost. Tourism throughout 2017 has grown by 10% year-on-year and the country has won a number of travel awards. While tourism continues to grow, investment will too, and the Golden Visa Scheme should draw in foreign capital that will benefit the country as a whole as well as the investor.
Investment funds
Investment funds in Portugal provide tax optimisation as well as opportunities for small investors to become involved in larger projects that would otherwise be out of reach. With capital gains of 10% and rental yields of 5% per year available in cities such as Lisbon, Portugal provides a great environment in which to invest. This is largely thanks to low interest rates and better managed public debt which makes real estate investment a very profitable option.
Schemes such as the Golden Visa, show that the Portuguese government has a more than accommodating approach to foreign investors who want to benefit from the country’s extensive tourist industry.

*For more information on investing in Portugal property, please contact Hopwood House.

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Editorial Contact Details - Conor Shilling
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