By Len Port, Contributor(*)
Portugal’s burgeoning ‘Golden Visa’ program could see a huge upsurge in applications, particularly from wealthy Chinese, as a result of the recent scrapping of a controversial investor scheme in Canada.
News of this comes as new measures are about to be introduced to stop alleged abuse of the program from within immigration services as well as among estate agents and illegal intermediaries.
The Canadian scheme allowed foreigners with a net worth of more than a million euros (C$1.6 million) to gain residency and perhaps citizenship by lending the government C$800,000 (€526,000 or US$723,000) that would be paid back in about five years without interest.
Many Canadians criticized the scheme as a way for rich foreigners to buy citizenship and live abroad without creating jobs or economic growth in Canada.
The scheme was brought to a close in Canada’s budget this month because it was viewed as “a flawed, inefficient way to lure wealthy entrepreneurs who could benefit the economy,” according to the Toronto-based The Globe and Mail. It meant that “tens of thousands of those who have applied to the program and are currently on the waiting list will have their fees refunded – but will not have their applications processed,” reported the newspaper.
The number of would-be investors is believed to be as many as 65,000, with 70% of them Chinese.
“Disappointed would-be Canadian investor migrants would do well to look to Europe, and more precisely to Portugal,” says Rosemary de Rougemont, senior partner with the Lisbon-based legal firm NDR.
“It is an opportunity for Portugal to solidify its Golden Visa program, which was launched last year and which we have been involved with from the outset.”
Less than 1,000 residence visas have been issued in Portugal so far. While other countries within the EU have competing schemes, “the Portuguese program is fast establishing itself as the European migration scheme of choice,” says Rosemary de Rougemont.
“This is because it has achieved a sensible balance between formality and attracting investment,” she adds.
A minimum investment of €500,000 (US$691,000 or C$765,000) in property can secure a Golden Visa residence permit to citizens of non-EU countries. It may lead to the granting of a permanent residence permit and Portuguese nationality. It also opens the door to unrestricted movement within the 26 countries of the Schengen area and quashes any need to pay tax on foreign earnings for five years.
Portugal is seen as an attractive proposition for rich foreigners seeking more convenience and security than they feel is available in their own countries.
The potential benefit for Portugal is that significant help in turning around the country’s deeply depressed property market could give a critical lift to the economy as a whole, say advocates of the scheme.
The other ways foreign investors can become eligible is to transfer capital of at least a million euros or create at least 10 jobs in Portugal. Whatever the type of investment chosen, applicants must maintain it for a minimum of five years. There are other conditions, including precautions against money laundering, but for honest applicants these are not onerous.
Many of the Chinese investors have been attracted to the scheme because of concerns about their children’s education and health in their much polluted homeland, or because of speculation that China may be following in Europe’s footsteps and heading for an economic collapse of its own.
Applications have also been coming in from countries as diverse as Russia, Angola, Brazil and South Africa. A growing number are emerging from Arab countries. A Portuguese trade delegation has been visiting Oman this week to familiarize investors there with the program.
The Association of Professionals and Real Estate Enterprises of Portugal (APEMIP) will soon sign agreements in China aimed at curbing abuses related to the Golden Visa scheme, such as phony property price inflations and greedy ‘introducers’ cashing in.
The agreements, drawn up in collaboration with Portugal’s Ministry of Justice, will be signed during the Portugal-China Property and Investment Road Show in Shanghai between March 14 and 17.
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(*) Len Port is a journalist and author. Born in Northern Ireland, his first written pieces were published while he was working in the Natural History Museum, London. Since then he has worked as a news reporter, mainly in Hong Kong, Northern Ireland, South Africa and Portugal. In addition to reporting hard news for some of the world’s leading news organizations, he has produced countless feature articles on all sorts of subjects for a range of publications. Now living in southern Portugal, his books include travel guides and children’s stories. His ebooks – People in a Place Apart and The Fátima Phenomenon – Divine Grace, Delusion or Pious Fraud? are available from amazon.com and amazon.co.uk. His blog posts can be viewed at algarvenewswatch.blogspot.com