Portugal still ‘top of the pops’ for Golden Visa despite rule changes – Andrew Rissik

The Portugal Golden Visa has long been a sought-after option for non-EU citizens, including South Africans, looking for residency abroad. Launched in 2012 by the Portuguese government, the program aimed to attract foreign investment. However, concerns about escalating property prices led to changes in the Golden Visa’s rules. In an interview with Biznews Andrew Rissik from Sable International explained that despite fears that the program would be completely abolished, it remains available as a ‘Plan B’ or secondary residency option. Rissik clarified that while real estate investment is off the table, residency can still be achieved through private equity fund investments. In comparison with golden visas for other Western destinations, Portugal, he said, remains “top of the pops.” The immigration specialist will hold roadshows in Cape Town on February 21, Johannesburg from January 27 and 28, and in Durban on January 29. South Africans have the opportunity to engage in one-on-one discussions with Sable International experts to explore the investment options and golden visas available. – Linda van Tilburg


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Highlights from the interview

Most South Africans who gain residency in Portugal, don’t actually move there

Last year was quite tumultuous for Portugal. On February 16th, the Portuguese government announced they were ending the Golden Visa program. This program, often blamed for rising house prices, had stimulated the real estate sector significantly. However, it’s important to note that most people who obtained the Golden Visa didn’t actually move to Portugal, contributing positively to the housing stock.

Throughout the year, real estate developers rushed to sell their properties. By the end of the year, it became clear that the Golden Visa program would continue, albeit in a different form. This was a relief, as there was a real concern that the program would be completely shut down. The good news is that it remains an option for those seeking a Plan B or a second residency.

The key change is that real estate investment is no longer an option anywhere in Portugal or its islands. Instead, the focus has shifted to private equity fund investments. This aligns with the government’s original strategy of attracting foreign investment. Initially, the Golden Visa was introduced to stimulate the real estate market following the 2008 crash and the 2012 bailout. This strategy was successful, and now the aim is to bring investment into Portuguese businesses through private equity funds.

Minimum investment amount in Portugal is €500,000

The other fundamental change is that the minimum investment amount is now €500,000. This was the initial amount when the program was launched in 2012. Over time, lower thresholds or cheaper hurdles were introduced to stimulate investment into outlying and regenerating areas. The market had become accustomed to €300,000 entry level, but we’re now back at €500,000 for private equity.

The challenge with the private equity funds is that you’re not buying brick and mortar where you can go and have a look at an apartment and buy it. You’re now investing into a fund, which introduces a different set of risks. Investors need to be extremely cautious at this stage, because private equity was not a popular concept in Portugal before the Golden Visa. It’s important to understand that these private equity funds are being created specifically for Golden Visa investors. As always, there will be players who may take advantage of the situation and create investments that are not necessarily that good. I’ve spent the last three months conducting due diligence on various funds and we have two or three good options ready for marketing.

South African community in Portugal is growing, Sable International deepened commitment 

I would say that the Golden Visa is an excellent Plan B for residency and a pathway to citizenship.That is proven. We have several clients who have obtained their Portuguese nationality and are now carrying Portuguese passports through the Golden Visa process. There were questions on whether it is real; it is. It’s the only residency program that leads to Portuguese or European citizenship without relocating. It is still a great solution. Realistically, it never takes five years, I always say to people, realistically allow for about eight years from investment to citizenship.

We’ve set up an office in Monte Estoril, just outside Lisbon, near a town called Cascais which most South Africans will know. The South African community in Portugal is growing, and we’re seeing many South Africans finding themselves there through different avenues. We are seeing   a lot of  South Africans retiring to Portugal, where they may have children and grandchildren living in the UK or elsewhere in Europe. Portugal offers a good lifestyle, security, and a very attractive cost of living by European standards.

Spanish and Greek alternatives for golden visa 

Spain is a popular destination that people have traveled to much more than Portugal but the likelihood of the Golden Visa leading to Spanish citizenship is very low. We know that our clients ultimately want a second passport, and in this respect, Portugal has the advantage. In Spain, one would have to live there permanently for at least 10 years to become a citizen. This is a significant drawback unless you plan to retire or have a business opportunity that requires you to live in Spain.

There are other options. Currently, we’re seeing a lot of demand for Greece, which offers a lower price point. However, an investment in real estate in Greece only leads to permanent residency, not citizenship. Another limitation of the Greek Golden Visa is that you can’t work in Greece. On the other hand, if you have a Portuguese Golden Visa, and your children are included, they can live and work in Portugal once they become independent. The main applicant, the Golden Visa holder, can also work in Portugal. This makes the Portuguese Golden Visa a more flexible option.

We held a large expo towards the end of last year and in a meeting with our team, we were comparing the numbers to the previous year in terms of registrations, attendance, and so on. The year before, we were quite close to the riots in Durban. We saw a significant drop off in Durban and the rest of the country was slightly quieter towards the end of last year. We think it was because we’d won the World Cup. There was a kind of euphoric feeling in South Africa. There was no load shedding, if you remember, right throughout the rugby World Cup campaign. South Africans are interesting creatures. We forget things very quickly because I think we’re generally very positive and resilient people. But what we’re seeing now is that we’re starting to see inquiries ticking up again.

Sable International has a very strong stance on whether you should leave South Africa. If you don’t have a lot of wealth and you’re not young and skilled, we generally advise people to think twice before leaving. It’s very expensive to leave South Africa and go and set up in a first-world country. So there are other things that we can do to mitigate risk. But for people who are either quite wealthy or young, we’re seeing quite a constant demand. The UK is very popular again. There was a period post-Brexit where I think everyone was a little bit skittish, but the country is English speaking, it’s culturally similar to South Africa. So, we’re still seeing a big demand for the UK.

But I think if you look at things relatively, and to address the  question about the UK, the unemployment rate in the UK is much lower than here. The UK is definitely facing challenges, as is the whole world economy at the moment. However, what we’re observing in all of our offices around the world is that it’s very difficult to find good skilled people. So, I believe if you’re educated and skilled, you’re likely to be quite employable.

How much of your wealth should be overseas?  

We were chatting with our Managing Director of Sable Wealth the other day, and he mentioned that a client had asked him, ‘What percentage of my wealth should I have in South Africa and what percentage should I have offshore?’ He responded, ‘Well, 0.8% of the global market is in South Africa, so you should have 0.8% of your wealth in South Africa.’

On the other hand, I’ve heard others suggest that if you spend half your time abroad, maybe you should have half your wealth in and half out. There’s no definitive answer.

Portugal is still top of the pops for overseas residency

I believe that if you’re considering a Plan B and have no current intention of relocating, Portugal is top of the pops. This is due to the benefits you’ll ultimately receive with citizenship. Once you’ve obtained that foreign passport, you can breathe a sigh of relief. As I mentioned, for lifestyle, retirement, and remote working, it’s a very compelling destination and is very close to the rest of Europe. For instance, a flight from Lisbon to London is only two and a half hours. So, living in Portugal is very similar to living in Cape Town and commuting up to Joburg. You can fly up to Amsterdam or London for the day. It’s very interesting.

Portugal is also part of the Schengen Area. So, when you have a Portuguese residence card, whether it’s under the retirement visa or golden visa, that card gives you free access to travel in and out of any Schengen state for leisure or business. That is a definite bonus unlike British residency which does not give you access to the European Union after Brexit.  

Younger South Africans can also benefit from ‘retirement’ visa

In Portugal, the retirement visa is classified as a D7, which is technically a passive income visa. This means that even if you’re a younger person and still working, you can apply for this visa. The only requirement is that you must demonstrate a passive income of more than around €1000 a month, which is not a significant amount of money. You can then apply for a D7 visa. 

The fundamental difference between the D7 and the Golden Visa is that if you’re granted the D7, you actually have to relocate to Portugal. You’re required to spend a minimum of eight months a year in Portugal and become a tax resident. This changes the conversation significantly, especially for South Africans. As you may know, when you leave South Africa as a tax jurisdiction, an exit tax is payable. Lots of tax planning and investment planning is required before you make the move. Sable International has advisors to take this step. 

I personally spend seven months a year in Portugal and I spend the rest between South Africa and the United Kingdom and it took me two to three years to get my planning in place to make the move. It is a safe option and good for children as it gives them access to Europe for study purposes 

Investment options in Portugal 

Anecdotally, many people have mentioned to me that they believe Portugal has closed their programme. But, they haven’t closed it. The program has fundamentally changed, but it’s still worth considering, and we’re still seeing people entering the programme. So, before you accept hearsay at a dinner party, please consult a specialist.

Investing in a private equity fund is a completely different discussion compared to investing in an apartment in a nice resort in the Algarve. One needs to be a sophisticated investor. You need to understand that you’re investing in a collective investment scheme. And, like any investment, there’s risk. However, we’ve done some homework and found some nice investment options. Some are probably a bit riskier, while others are very conservative investments. So yes, we’re very happy to share that information if anyone’s interested.

Sable International South African Roadshow

We will be meeting clients in Cape Town on 21 February on a one-to-one basis to run through some investment options that we have on offer. We will be in Johannesburg from 27-28 February and in Durban on 29 February.

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