SEF, Portugal’s Foreigners and Borders Service, the Government agency that processes the applications for the residency-by-investment permit known as the “Golden Visa”, has adopted new procedures, the main impact of which will be felt in the initial application of a real estate investor.
The Good News: Faster Processing of the Applications
The good news is that the new rule book, which was released internally on January 9th 2017, is expected to streamline the processing of applications and thereby reduce the processing time frame to within the maximum limits allowed for under applicable law, namely 90 days for the initial application and 60 for the renewal applications. Such limits have been systematically disrespected since the beginning of 2015, in the aftermath of the corruption scandal that involved the head of SEF in November of the previous year, and due to several ensuing changes, many of which aimed at preventing new occurrences of similar cases.
The Bad News: No Longer Possible to Buy a Property and File the Application During a Single Trip
The bad news is that, under the new rules, Golden Visa applications may only be filed together with all the required paperwork, including the documentary evidence that the minimum required investment has been made. Now, whilst this does not raise any special difficulty in the case of an investment in financial assets, it may do so in case the applicant chooses to invest in real estate. This is because it ceases to be possible to deal with the initial application during a single short trip to Portugal, as it used to be the case. In fact, given the need for the physical presence of the main applicant to initiate the procedure, it is simply not feasible to view properties, choose and purchase one, and have the required purchase and registration paperwork ready for submission in less than at least 5 weeks.
Solutions: Take 2 Trips, Buy Without Viewing or Invest in Financial Assets
The obvious solution is for the main applicant (or a trusted relative or friend) to initially travel to Portugal for viewing properties and make a choice. The property can then be purchased by the applicant’s lawyer on his/her behalf, and once all the paperwork is in order the main applicant can then travel to Portugal to initiate the application procedure. His family members may accompany him and attend the biometrics-taking session at SEF, or else they may do this once the application gets approved and before the residence permit cards can be issued.
A second solution is for the property to be chosen without a prior viewing, in which case the investor may want to previously order an independent valuation by an accredited surveyor.
The third alternative consists of a 2-phase investment. The investor starts by transferring 1 million euros to Portugal and then, once the initial Golden Visa application gets approved, the investment gets switched to real estate and the balance of the funds can be repatriated.
Further solutions involve setting up a Portuguese company and Belion Partners will be happy to discuss them with you.