Portugal offers golden visa (ARI) based on Capital transfer with a value equal to or above €500,000 Euros, for purchasing shares in investment funds or in venture capital geared to capitalize small and medium companies that, in turn, must present a feasible capitalization plan.
Portugal Golden visa investment funds Deliver Superior Returns Over Real Estate or any other stock market indexes and has several key advantages.
Key Benefits
- Safety – Investment funds are highly regulated by the Portuguese Securities Market Commission (CMVM), ensuring compliance, transparency, and investor protection.
- Management – The management of properties is done by self or through a rental management company. Managing and decision on funds are done by professional fund managers to minimize risk achieve higher returns.
- Risk – Property investments are inherently low risk hedge against inflation. As with funds, higher the risk more the reward, but you also risk losing entire investment.
- Experience – A prior investment experience in trading, is required before investing in a fund. As with real estate, no prior experience needed.
- Diversification – The fund allocation diversified to invest in different sectors to minimize risk. Real estate investments can spread risk by investing in multiple properties, but cannot divest from property market.
- High returns – Depending on the fund, ROI can be easily 8-16% and fund can outperform real estate properties, where the rental income is modest 4-6%
- Fees – Investment funds are not subjected to taxes. Real estate transactions subject to property tax, stamp duty, broker fee and other fees apply to property transactions. Investment funds are subjected to setup fee, custodian fee, management fee, performance and exit fee etc.
- Taxes: Profits from funds are tax exempted. Income and capital gains from funds are tax exempted unless withdrawn.
Conditions for Golden Visa
Portugal requires a Capital transfer of the amount of 500,000 Euros, or higher, for the acquisition of units of Private equity (PE) funds which invest in companies not listed in stock market or venture capital (VC) fund of funds dedicated to the capitalisation of startups companies. The conditions for capital injected under the Portuguese GV legislation, whose maturity, at the moment of the investment, is,
- Investment must be held for at least, of five years and, at least,
- 60% of the investments invested in companies headquartered in Portugal.
- Head office in national territory
- Yields: You should expect returns of 8-16% a year, for example when the fund ends in 5-10 years.
Fund costs
Here are the brief overview of costs you should expect from subscribing to an Portugal investment fund
- Subscription fee – 1%-5%
- Annual Fund management fee – 0.75% to 2.75% of the funds value.
- Performance fee – TBD
- AIMA fee and Legal costs
- Success fee (paid to fund managers) when dissolving the fund.
Read our full guide on
- How to Invest in Portugal investment funds
- Alternative Investment Funds
- How to Apply for Investment funds
Taxation
Portuguese non-residents are generally exempt from paying taxes from dividends and capital gains on the investment fund. If you are a tax resident in Portugal, 10% of withholding tax on distributions apply.
Residence permit – For fund investors, the temporary residence permit for investment purposes is valid for two years from the date of issue of the corresponding title with right to work and family members permitted.
Fund Eligibility
Investment funds (private equity, VC fund) sold for the purpose of GV program must
- Regulated by Portuguese Securities Market Commission (CMVM),
- Must not invest directly or indirectly in real estate market.
- Fund manager is a depository financial institution or Bank of Portugal regulated by central bank.
- Fund adviser is external Fund Management company.
- Audited by Portuguese Tax Authorities complying with tax laws.
- Comply and eligible for Golden Visa regulation.
- Disclose invested sectors, strategy risk and exit strategy.
