Chinese love Portugal’s “golden visa”

With the golden visa, Portugal wanted to take urgently needed money. It works.

D he was the first recipient of a Portuguese “golden visa”, the Indian businessman Muthu Nesamanimaram. The then Foreign Minister and current Deputy Prime Minister Paolo Portas brought him the paper, which rewards investment in Portugal with a residence permit, in March of last year even to New Delhi by hand. Portas and his head of government, Pedro Passos Coelho, had come up with the idea of ​​bringing fresh foreign money to the European crisis country. So far, according to figures released by the Ministry of Foreign Trade, Portugal has already raised 817 million euros, mainly from Chinese sources.

This surpasses even the predictions of professional optimist Porta, who had expected about 500 million this year. This sum was received in the first seven months alone. In the first year, it was 306 million. If things continue, one billion marks could be exceeded by the end of 2014.

The portugual visa has thus become one of the most important sources of foreign direct investment in Portugal. Interested parties from countries outside the European Union, who also purchase unhindered access to all “Schengen” countries by acquiring a residence permit – despite occasional frowns in Brussels – have three options: Either they buy a property for the price of at least one half a million euros; or invest at least one million in a Portuguese company; or they create at least 10 jobs. A real estate agent in Portugal depends on its offers: Last year alone, a price increase of 53 percent in the real estate market

A real estate agent in Portugal depends on its offers: Last year alone, a price increase of 53 percent in the real estate market.

For this, they first get a one-year residence permit, which can then be extended by two years. They do not have to spend a long time in Portugal. Seven days a year are enough. 

This is apparently also enough for many investors who then look for their possessions on a trip to the Tagus. Other benefits include additional visas for family reunification. 

This can give daughters and sons access to European universities.

Portugal “Golden Visas” are discredited

For six years, rich Chinese, Russians or even Indians in Portugal can acquire a residence permit when they invest in return. An opposition party is now calling for an end to this lucrative business model. Portuguese officials and politicians may have been taking part.

Joao Batalha stands in the office of the anti-corruption agency “Transparencia e Integridade” in Lisbon and puts small objects in an envelope: a poster, a postcard and a USB stick with important information about the so-called “Golden Visas”. Batalha plans to distribute the envelopes in Parliament this Wednesday, drawing attention to a topic he believes should be at the center of the political debate:

“The ‘Golden Visa’ program was created in Portugal at the time of the financial crisis when the country urgently needed foreign investment. It was designed quickly and thoughtlessly, with no mechanisms to counter potential risks: crime such as money laundering or the granting of residence permits to criminals sought abroad. There has been a shadow on this program from the beginning and this has led, among other things, to a major corruption case against senior officials and the ex-Minister of the Interior. “

Awarded 6500 “Golden Visas”

Since its introduction six years ago, the Portuguese authorities have issued around 6,500 gold visas. Anyone who either buys a property worth over 500,000 euros, makes a direct capital investment or creates ten jobs when starting a business has the right to a residence permit. More than 90 percent of non-EU citizens decided to purchase a second home, especially in Lisbon, and thus contributed to a sharp increase in house prices.

Nevertheless, the program is very important for the Portuguese economy, says Tiago Caiado Guerreiro. He manages a large law firm in Lisbon that specializes in assisting foreign clients with visa applications. About 60 percent come from China, so Guerreiro now has seven employees under contract who speak Mandarin. The lawyer points out that the positive impact of the program on the economy is not always immediately apparent:

“Portugal has very high public debt, and foreign money helps us reduce debt. The people who come with the visa first get to know the country and then maybe bring their companies here, their own staff, they import from their countries and export Portuguese goods. The real estate market is benefiting, new private hospitals are being built, and they are commissioning Portuguese service providers, be it in IT, commercial cleaning or tax matters. “

So far, these arguments seem to convince political leaders in Portugal. 

Political conflicts of interest

The Left Party “Bloco Esquerd” now wants to put an end to the “Golden Visa” in Portugal. But this is met with resistance from the major parties: a parliamentary committee has reviewed the Left Party bill and clearly opposed the end of visa policy. However, there is a catch: the opinion was drafted by a Member of Parliament who works for the law firm Caiado Guerreiro as a legal advisor.

For the anti-corruption fighter Joao Batalha, this is a sign that under these conditions it will be difficult to take a more critical look at the pros and cons of visa policy:

“Unfortunately, this is part of everyday life in Portugal: in almost all economic issues, we find Members who personally benefit from a particular legal situation. And that, of course, disturbs an open debate as now with the “golden visas”. MEPs in Portugal are much too influenced by strong economic interests. “