Last Updated on 27th December 2024
Portugal is one of many high-demand destinations that has long been enormously popular with expat retirees, professionals and families. It is also one of several countries that has reformed its residency by investment visa scheme following controversy around the impact on housing shortages, and the potential for these programs to be exploited.
Now, the Portuguese scheme remains open to new applicants, albeit with revised eligibility criteria and without the option of purchasing a home in the country to qualify for permanent residency—and potentially onward citizenship.
Here we’ll summarise how the visa works, the investment routes available, and the alternatives that expats keen to settle down in Portugal or work towards citizenship status may wish to explore.
Obtaining Portuguese Citizenship Through the Residency by Investment Program
Often referred to as the ‘golden visa’ the residency by investment scheme is officially called the Portugal Golden Residence Permit Program. It offers non-EU nationals the option of investing in the economy in return for a five-year residency permit.
Permit holders have the right to study, live, and work in Portugal and to use their status as EU residents to take advantage of freedom of movement entitlements throughout Europe. The average minimum stay requirement within Portugal is just seven days per 12 months.
Following reforms to the program, as mentioned, foreign nationals cannot now qualify by purchasing a home, but alternatives include investing at least €500,000 in one of the following:
- Venture capital fund units or other investment funds where at least 60% of the fund is invested in Portuguese-registered companies.
- Approved investments in national scientific or technological research activities.
- The formation of a new Portuguese-registered company that creates five permanent jobs for at least three years.
Investors can also contribute €250,000 to initiatives involved in the maintenance or recovery of the natural cultural heritage, with a lower threshold for schemes or projects within lower-population regions of Portugal.
Transitioning From Permanent Residency to Portuguese Citizenship
Provided investors comply with the visa terms and maintain their investments for the requisite period, they may become eligible to apply for full citizenship after five years.
Additional criteria apply, but this route is potentially beneficial to non-EU citizens who cannot pursue an alternative application route, such as applying for citizenship by marriage or civil union or because they have parents or grandparents of Portuguese nationality.
Residents living in Portugal, having secured residency through the investment scheme or elsewhere, must meet these requirements:
- Being at least 18
- Having been a Portuguese resident for at least five years
- Obtaining A2 level Portuguese language proficiency
- Providing evidence of a clean criminal record
Citizenship is not guaranteed, but applicants who have strong ties with their community, such as living, working, or studying in Portugal, purchasing a permanent home, or establishing a business in the country, are more likely to be approved.
Note that dual citizenship is permitted, which means applicants who secure a Portuguese passport are not expected or obliged to give up their existing citizenship status and can legally hold two passports.
Alternatives to the Portuguese Residency by Investment Scheme for Prospective Citizens
Like most EU countries, there are varied visa routes and permits non-EU nationals can look at that provide a way to become a legal resident – although much may depend on their finances, wealth, age and circumstances.
The D7 visa is one of the most-used ways to secure residency outside of the investment visa, with comparable benefits in terms of visa-free travel rights. However, this visa is most suited to retirees or affluent applicants who can demonstrate they have a passive income to cover their living costs.
Passive income sources can also include pension benefits, rental incomes from investment property portfolios, dividend payments and other types of returns. Applicants are also required to show proof of comprehensive health insurance coverage and a clear criminal record check.
Physical Stay Requirements for D7 Visa Holders
An advantage of the D7 visa is that no upfront or direct investment is required, although there are stricter physical stay rules. Applicants must intend to live in Portugal permanently or at least initially for the majority of the time. The rules vary for those with temporary and permanent residency:
- Temporary residents must not travel outside of Portugal for six consecutive months, or eight months in total, over the duration of their residency period.
- Permanent residence permit holders must not be away from Portugal for 24 consecutive months, or 30 months in total, over a three-year period.
Longer visits abroad that breach these requirements are rarely allowed, and the residency permit will often be rescinded unless there is evidence of justifiable special circumstances.
While purchasing or renting a home is not specifically a condition of the visa, applicants must provide documentation showing that they have made long-term accommodation arrangements, such as a rental contract or a title deed.
The primary criteria, though, is to demonstrate that the applicant and all family members included have sufficient income. This income must be worth at least €9,840 per year plus an additional 50% for a spouse or partner and a further 30% for each dependent child.
Provided residents comply with the terms, they may then become eligible to apply for citizenship after the minimum five-year period, as before.
The Benefits of Acquiring Citizenship in Portugal
Obtaining dual nationality status is often desirable for those keen to travel around the Schengen Area and either live in Portugal, work in Europe or otherwise establish themselves and their family as EU citizens.
The process can be lengthy, without an option to apply directly for citizenship for those without Portuguese family or marital ties, but a benefit is that British nationals and other non-EU citizens can retain their existing citizenships.
Once a resident becomes a citizen, they can travel under their Portuguese passport as any other European citizen, live and work anywhere in the region they wish, and enrol children in EU schools, colleges and universities, or opt to retire and live in the warm Mediterranean climate as part of the retirement lifestyle they aspire to.
The right options may, of course, depend on your priorities and expectations, but having clarity about the varied ways to become a Portuguese citizen, the minimum investment or income streams required, and the timescales is important to ensuring your planning is thorough.
For more information about becoming a Portuguese resident, the implications for your wealth, investments and cross-border assets, or understanding the process of applying for residency through investment, you are welcome to contact the Chase Buchanan team in Portugal to arrange a convenient time to talk.
*Information correct as at December 2024