Five hundred thousand euros for a residence permit in the Schengen area: this has been the offer of the Portuguese government to wealthy foreigners since 2012. It was used by about 12,000 investors who gave themselves and their family members a ticket to Europe. Now – also due to EU pressure – Portugal the Golden Visa Program should be terminated. Prime Minister Antonio Costa announced that it will expire on March 16.

“It’s good that the golden visa has finally been abolished, but it shouldn’t have been introduced,” says Ana Gomes, a former Socialist MEP who has opposed the scheme in the first place. “It was an invitation to money laundering and allowed criminal and terrorist organizations to legally enter the Schengen area.”

More than half of the applicants came from countries where the risk of money laundering was particularly high, and Portugal never investigates the origin of these funds.

“Gold Jobs for Brokers”

What was announced as a stimulus program for the Portuguese economy turned out to be mostly business for the real estate industry: instead of creating new companies and jobs, real estate in and around Lisbon is bought mainly by wealthy Chinese, followed by Brazilians, Turks, South Africans and Russians. Nearly 90 percent of the approximately seven billion euros raised in total went to the housing market. According to the Aliens Police SEF, only 22 golden visas were issued to create jobs. The result: a meager 280 new jobs in at least ten years.

However, Hugo Santos Ferreira, president of the Portuguese Real Estate Association, seems to be disappointed with the imminent end of the golden visa: “This is an attack on all foreign investors who want to invest their money in Portugal. Its credibility and good reputation as an investment-friendly country are suffering.” However, Portugal needs international investors to boost its economy, it cannot ignore an important tool that brings in more than 600 million euros per year. “In addition, the program has created thousands of jobs in construction and real estate,” says Santos Ferreira.

Housing crisis and money laundering

But there is another side to the matter: in recent years, property prices in Portugal, especially in the two largest cities of Lisbon and Porto, have risen sharply. Also because of the Golden Visa program and because more and more EU citizens are buying houses and apartments in Portugal. At prices that the Portuguese can no longer afford. “The Golden Visa has led to a sharp increase in property prices, especially in the high-end market segment,” says former MEP Ana Gomez.

Another reason to stop submitting proposals to foreigners is the often dubious origin of applicants. After the start of the war in Ukraine, Russian citizens were banned from investing in Portugal. They are excluded from the golden visa. However, according to Gomez, countries like China or Vietnam are not transparent either. Santos Ferreira, president of the Portuguese Real Estate Association, believes that all transactions in Portugal are strictly controlled. There are black sheep everywhere, but this does not mean that there is no reason to cancel the golden visa: “No one wants to close banks, although it is known that money laundering can take place there.”

While Santos Ferreira still hopes the government will withdraw the amendment at the last minute, it appears that the €500,000 entry tickets to the Schengen area via Portugal have run out. “It was just opaque and dangerous,” says Ana Gomez. What will happen to the golden visa holders is still unknown. It is said that their residence permit should only be renewed if they actually live permanently in Portugal.

Source: Deutsche Welle.