Portugal will stop issuing ‘Gold’ European visas
Five hundred thousand euros ($530,000) for a residence permit in an EU country in the Schengen zone: that’s the deal the Portuguese government has been offering to wealthy foreigners since 2012. Around 12,000 investors have taken advantage so far, effectively buying a ticket to the European Union for you and your families.
Now, Portugal is ending its golden visa program, partly in response to pressure from the European Union. Prime Minister Antonio Costa announced that the program will end on March 16.
“It’s good that the golden visa is finally being abolished – they should never have introduced it,” said Ana Gomes, a former member of the Socialist Party in the European Parliament who has opposed the program since its introduction. “They were an invitation to money laundering and made it possible for criminal and terrorist organizations to legally infiltrate the Schengen area.”
Gomes said that more than half of the people who applied for gold visas were from countries where money laundering is particularly prevalent and added that Portugal never investigates where its funds came from.
Portugal has a ‘reputation’ as an ‘investment-friendly country’
Originally heralded as a program to boost Portugal’s economy, which had been at rock bottom for a decade, golden visas have proven above all to be a source of revenue for the real estate sector. Instead of creating new businesses and jobs, rich foreigners simply bought luxury apartments in and around Lisbon. Most of these investors were Chinese, followed by Brazilians, Turks, South Africans and Russians.
The program raised around €7 billion for the country, nearly 90% of which came from property purchases. According to statistics from the Foreigners and Borders Service, only 22 visas were issued for job creation, resulting in only 280 new jobs in more than 10 years.
Hugo Santos Ferreira, president of the Portuguese Association of Real Estate Developers and Investors, is not at all happy with the proposal to end golden residence permits. “It’s an attack on all foreign investors who want to invest their money in Portugal,” he said. “Portugal will lose its credibility and good reputation as an investment-friendly country.”
Santos Ferreira said that Portugal needs international investors to strengthen the economy and cannot do without an important instrument that moves more than 600 million euros a year. “In addition, the program has created thousands of construction and real estate jobs,” he said.
Housing prices and EU criticism highlight visas
In recent years, property prices in Portugal have skyrocketed, particularly in its two largest cities, Lisbon and Porto. Critics say the golden visa program is partly to blame, as well as the fact that more and more EU citizens are buying houses and apartments in Portugal – at prices the Portuguese can no longer afford.
“Gold visas provoked considerable price increases, especially at the top of the market,” said Gomes. And that is the argument that the government now uses to justify the closure of the golden visa program. Gomes said the official line was just a pretext, and it was increasingly harsh criticism from the European Union that was responsible for the program’s imminent end.
The criticism mainly concerns the often dubious origins of visa applicants. Since the beginning of the war in Ukraine, Russians have been banned from investing in Portugal and excluded from the golden visa program. But, said Gomes, countries like China and Vietnam, whose wealthy citizens are eligible for golden visas, aren’t exactly models of transparency either.
Santos Ferreira said that all transactions in Portugal are strictly controlled. He acknowledged that there are bad actors everywhere, but he doesn’t see that as a reason to abolish golden visas. “No one is talking about closing the banks,” he said, “although it is well known that money can be laundered there as well.”
He said he hoped the government backed out at the last minute and the gold visas could continue in some other form, but it looks like this is the end of the road for Portugal’s €500,000 Schengen entry card.
“It was simply very opaque and dangerous,” said Gomes.
It remains to be seen what will happen to holders of existing gold visas. According to some reports, their residence permits will only be renewed if they are effectively residing permanently in Portugal.
Source: DW
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.