Will Portugal benefit from the end of Spain’s Golden Visa?

Spain has scrapped its Golden Visa property option programme as of Wednesday April 2 after launching the FDI attraction vehicle in 2014.

Portugal had already scrapped the property investment path of residency through investment in 2023 because the then Socialist government under António Costa said it had contributed to fuelling Portugal’s property crisis and lack of housing in cities such as Lisbon, Porto and parts of the Algarve.

In Spain, this mechanism was included in the law supporting entrepreneurship approved by the PP government in 2013 and came into force the following year.

Since 2014 it has brought in around €10Bn of investment, most of it property investment to the Spanish government and the different municipal councils throughout Spain which processed the programme applications.

Residency for non-EU foreigners was granted in return for an investment of at least €500,000 on a property in Spain, excluding mortgages.

It was also granted to non-EU investors who invested at least €2000 or more in Spanish sovereign bonds or €1 million in shares, or a share in a Spain-based company in the real economy.

Also eligible were investments made in investment funds, closed investment funds, or venture capital funds established in Spain.

The current Socialist government believes that the Golden Visa’s property option was contributing to a housing crisis in some of Spain’s regions.

“The end of the real estate Golden Visa will provide opportunities for those who are currently struggling to find homes in specific locations, where upward price pressure on houses and lack of offer are a challenge” says Spain’s minister of Housing, Isabel Rodriguez in an interview with Spanish news source El Pais.

According to the newspaper, Spain had granted 22,430 Golden Visas to the end of 2023 using data from Spain’s immigration observatory.

Now, the question is if Golden Visa applicants will transfer their interest to Portugal where the necessary investment criteria are much cheaper than in Spain, with a minimum contribution of €250,000 but typically requires a €500,000 investment in private equity funds, €500,000 in donations to research activity, €250,000 in donations to support artistic production or the preservation of national cultural heritage, or €500,000 to establish a commercial company in Portugal, creating five permanent jobs.