Golden visa: Portugal’s new €350k residency category and the lure of Porto

JOHANNESBURG — Portugal is slowly getting back on track after having to endure an EU bailout in 2012. As part of its bailout deal, the country has been offering a ‘golden’ visa programme, which involves foreigners investing in the country and in return receiving residency and ultimately citizenship. This could be a perfect option for many South Africans and the cost of the programme has been cut recently with a new category that requires investments into older buildings. It’s a fascinating concept and may be appealing to many a South African currently. Andrew Rissik of Sable International tells us more. – Gareth van Zyl

This podcast is brought to you by Sable International. Andrew Rissik, who is the Managing Director of Forex and International Projects at Sable International is on the line with me from Cape Town.

Andrew, a lot of South Africans may be looking at the option of obtaining EU citizenship right now, and one of the ways in which they can do this is through Portugal’s Golden Visa Programme. Now, for our listeners and readers out there who may not have heard about this programme before, can you give us a brief overview of what it involves exactly?

Gareth, thanks very much. In a nutshell, Portugal’s Golden Visa Programme is a residency-by-investment programme. It was launched by the Portuguese government in October 2012, which was just post the bailout. I don’t know if you remember back in 2012, when various European countries — Portugal included — were bailed out after the financial crisis? Well, the Golden Visa was promulgated to attract foreign direct investment, particularly from non-Europeans.

There were three investment categories at that stage. The first being real estate, which has been by far the most popular. There was also an opportunity to invest in a share portfolio on the Portuguese stock market, as well as an opportunity to set up as a Portuguese company employing 10 taxpayers; which, frankly has proven to be quite an unpopular route.

Essentially, you’re getting yourself a right to residency in a European country by virtue of the fact that you’re making a large capital investment in that country.

You’ve mentioned some of the various categories involved in the Golden Visa Programme, but there’s been a third amendment that has been made to the programme recently. Can you unpack that particular amendment for us?

The amendment you’re referring to is in the property investment category. The initial property investment category required a €500,000 minimum investment into real estate. Unlike many residency and citizenship programmes around the world, you didn’t have to invest in any specific government recognised development. It could be any real estate, whether it’s commercial, residential etc.

The challenge is that obviously, €500,000 is currently around the R8 million mark, which is a substantial investment. Nevertheless, it’s been very successful and now the Portuguese government has launched this new category of €350,000, which is €150,000 more affordable than €500,000 – suddenly making it quite interesting.

This new avenue is slightly more complicated in that it really is focused on trying to stimulate redevelopment of old, dilapidated buildings in what the government refers to as a “regeneration zone”. So, it’s not just a case of simply going and paying €500,000 for any property, taking transfer, and becoming a resident. Here, you need to identify a property in a designated area and then purchase it. You then go through the process of upgrading the property. In total, on completion, the investment must be a minimum of €350,000.

When would you then qualify for EU citizenship? Would it happen as the transaction is made or is it tied to certain requirements i.e. doing up the property properly?

Portuguese passport

What happens is the full investment of €350,000 needs to have been made into Portugal and all the contracts proving you are going to be doing the renovations etc. are all in place. That then gets submitted with all the right contracts with all the other documentation that one needs to put together for this application for residency. Once all those criteria are met, then we can submit the application and wait for the residency to be approved. As soon as the investment has been made, then one has the right to submit the application for residency.

It’s a very interesting way of rolling out this visa programme from Portugal’s side. What is the typical age of these properties that we’re talking about here because when one thinks of these old buildings in Europe, you’re picturing buildings that are potentially hundreds of years old?

Correct, and that’s exactly the kind of area that the government is trying to see the regeneration in. One criteria is that the building must be at least 30 years old. So, anything newer than that obviously wouldn’t qualify. There are lots of buildings that are in a state where I probably wouldn’t really want to go and get involved on this basis.

What we look for and steer our clients towards is buildings for which we have a project management and contracting team that are qualified and successful and they have a proven track record in actually taking buildings like this and bringing them up to the modern standard.

What happens in Portugal, especially in the historic downtown areas in some of the cities, is that you’re not allowed to get rid of the façade of the building. In essence, what will happen is that you will go for a project where you can actually gut the building and it becomes almost like a redeveloped building.

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I wouldn’t be advising clients to go and pick up something and just start doing a patchwork job on it, because then you’re going to be getting all those typical problems of ownership of an older building down the line, which you don’t really want when you’re sitting 10 000 km away.

So, preferably you probably want to find a building that’s 31 or 40 years old rather than go for the much older buildings?

Yes, you could take that approach. I think there are some buildings that are older but it depends on what the redevelopment plan is, and there are some fantastic buildings that are a lot older that need certain work done on them. Then it’s a case of putting the investor together with somebody who can manage that process on their behalf in Portugal.

Surely this is going to be quite a capital incentive option as well? Even though you only pay €350,000 up front you’d have to fork out a lot of money over the years to maintain it and keep it going? Does the Portuguese government also step in and monitor over the years how the properties are doing?

No, not once the investment is made. The Portuguese government, from an immigration and residency point of view, are not really interested in the ongoing management of the building. I think that it really comes down to the partners that we connect our investors with in Portugal.

We certainly wouldn’t be advising clients to get into a project where there’s going to be substantial ongoing capital commitment. The idea is that, really, you want to make sure that by the time you get to the final €350,000 number that you’ve actually now got a property that is in a really good condition for the foreseeable future. You want to make sure that it can obviously house a tenant or that it’s suitable for personal use without the need to spend further capital.

Now, you can basically make this investment in any Portuguese city or town, right?


One city that is looking particularly interesting is that of Porto. Can you tell me a little bit more about Porto and why it looks like such an attractive option for South Africans who are looking to take part in the Golden Visa Programme? How does it compare to the likes of Lisbon, for example?

Lisbon has been the fairytale story of the Portugal property resurgence over the last few years. Since 2012 until now, Lisbon has transformed. There’s been massive investment in Lisbon, not only through the Golden Visa Programme but through all sorts of other initiatives that have driven investment into Lisbon.

Meanwhile, I think Porto has been somewhat overlooked because the €500,000 category that was introduced in 2012, as you correctly said, applied to any property anywhere in Portugal. But Lisbon has a brand. It’s the capital city and it’s seen as a safe investment. But 300kms to the North, on the Douro River, sits the city of Porto, which in Portugal they refer to as the ‘second city’.

Coastal city of Porto

Porto has got a fantastic history. It’s a beautiful, historic town. That northern part of Portugal is very commercial and industrial. So, if you look at Porto and the fundamentals of the Porto property market – I would say in terms of the regeneration process, it’s probably two to three years behind Lisbon and we’re starting to see a lot of property developers moving in and investing there.

The government is also investing in all the common areas in the cities, fixing up the parks and pavements and they really are following through on that. There’s been a fantastic regeneration, both in downtown historic Lisbon and now in Porto as well. So, with Porto, from a capital investment point of view, you’re going to get more bang for your Euros.

Your costs per square metre are certainly a lot more competitive than what you’re going to find in Lisbon right now, and Porto also has a very strong tourism market. In terms of the short-term rental market, there’s a shortage of good short-term rental stock in Porto, so from that perspective there are some very interesting investment opportunities in terms of potential return. Also, I think that there’ll be a good capital growth opportunity in Porto as well just because it’s only really starting to get off the starting block now.

You’ve mentioned rentals as well. So, obviously as part of this Golden Visa Programme you don’t have to live in the property that you’re investing in? You can rent it out and live elsewhere?

Absolutely. Look, when it comes to living, in terms of the Golden Visa requirements, one doesn’t actually have to physically relocate to Portugal. I think that’s one of the reasons that this programme is so popular, because there are many South Africans and people from all over the world where there’s political and economic instability.

They’ll be looking to these kinds of programmes where they can create a plan B. They also get the visa, which gives them the ease of travel but they don’t have to physically go and live there. With the Golden Visa, an investor and his dependents only need to spend, on average, seven days a year in Portugal for the five-year period. So, you wouldn’t be living in the property necessarily anyway.

Pedro IV Square, Lisbon, Portugal


We have some clients who’ve invested in properties where they’ll get a usage right in a short-term rental environment for two weeks where they can go and spend their one or two weeks a year in their own apartment. What we find is most clients will just rent the apartments out, give them to a rental agent to manage them. Then, when they go to Portugal to go and do their time, they end up staying in hotels and traveling around getting to know the country.

Andrew, what benefit does Portugal ultimately derive from this? I know that you mentioned that they rolled out this programme as part of the bailout agreement back in 2012, but what kind of benefit do they get out of South Africans and other nationalities coming in and investing in their property sector?

Well, I think it’s the whole trigger effect. It was really designed to attract foreign direct investment, or capital investment, but there are now add-on benefits. In the early days, our clients used to fly over, very unemotionally, make an investment, and fly back out of Portugal. What has happened is it’s kind of opened a window to Portugal, not only to SA investors but there’s been a lot of Chinese investors and a lot of Russians. There are also lots of other Europeans who are also looking to move to Portugal for interesting tax benefits.

As clients spend more and more time in Portugal, they may think of possibly investing or setting up a business there. Some of our clients, who were very unsure about Portugal as an investment destination, are today even talking about possibly retiring there. I think if you take a long-term and a broad view, these kinds of programmes are very beneficial to a country. Outside of just stimulating directly the real estate market.

Are you finding that more South Africans are starting to look at the options that Portugal is putting on the table, especially with the local, political, and economic challenges?

Absolutely, I mean in 2012, when we first started to promote the programme in SA, we had a lot of early adopters but people were very cautious. I think South Africans are very risk averse when it comes to making offshore investments and a lot of people had burnt their fingers in the past with investing offshore. So, there’s that whole kind of mindset. I think we’re also coming from a relatively weak currency zone although a lot of the investors are fairly wealthy in SA terms.

Still, the real estate is not cheap, so it was a slow start and with what we’ve seen now obviously, with the market getting to know about the programme and a lot of people who are in the programme talking about it – certainly there’s a lot of interest. Last year was a relatively quiet year but what we’ve found is that since about April/May of this year — and it’s probably coincidental in the firing of Pravin Gordhan and Mcebisi Jonas — that there’s definitely been a renewed interest.

We’re actually quite busy again at the moment. I would say we’ve probably got 4 to 5 clients or families per month that are entering the programme, currently, through our business.

Andrew, for South Africans who are keen to get this process started. What kind of advice would you give them?

The first thing I would do is consult with somebody who understands the immigration and the nationality side of the business. Somebody who’s got a strong grip on what’s going on in Portugal economically, specifically around the property market. Then I would really encourage them to get over there and see it for themselves. My advice is get over there; go and understand the requirements.

We have a really good team of legal experts in Portugal that we can introduce clients to. Go and chat to the lawyers directly. Find out exactly what the implications are and what the requirements are. What do they need to do to ultimately become permanent residents.

Because at the end of this five-year residency program there’s the right to become permanent residents and a year later, ultimately apply for Portuguese citizenship. With that comes certain requirements that you have to meet.

It’s going over there. Getting a feel for the country and really understanding what they have to put in to travel this journey. It’s a long journey of six years but the end goal is a very attractive one. But the client really needs to know what they’re getting themselves into, both from an investment and immigration point of view.

Andrew Rissik, Sable International.
Andrew Rissik, Sable International.

Andrew, with Sable International, you guys hold your client’s hands and aid them through the whole process from beginning to end.

Yes, we do. We help them right from the initial consultation to have a look and see what their family structure is. We’ll actually then understand what their investment requirements are. We’ll set up the appointments for all the property viewings, in partnership with the property companies that we deal with.

We actually have staff based in Lisbon. Our staff over there will meet the client, take them to the banks, open up the bank accounts, help them get set up with a local Portuguese tax representative and all the legal requirements around the residency. What we do on that initial ‘investment trip’ is to make sure that when the client walks away after four or five days in Portugal that they are very informed to make the right decision about whether this programme is in fact, for them.

Once they’ve made the decision to go ahead with it, we then help them collate all the information, and tick all the boxes for the initial application which we need to then submit to the Portuguese authorities. We take them right through all the renewals of the residency, through the various points in the programme up to their six years, when we will help them with the application for citizenship.

Andrew Rissik, it’s been a pleasure chatting to you today.

Gareth, thanks very much.

Thanks. This podcast was brought to you by Sable International.

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