Portugal’s golden visa program, especially its investment fund option, may see renewed interest as Greece considers a hike in its minimum investment.
Portugal’s decision to remove real estate investment as an eligible investment option for its golden visa program was a huge surprise for investors.
However, there has been no drastic fall in demand for the program, and this may be attributed to American demand for Portugal’s golden visa and their preference for the investment fund route.
The €500,000 investment fund option was always available, but a significant majority of the investors chose to invest in real estate to qualify for the golden visa.
The investment fund route has seen a steady increase in demand that coincided with increased interest in Portugal’s golden visa among American investors.
The American Factor
In 2021 there was a 25 per cent jump in number of American nationals applying for the golden visa. The number of applications under the investment fund category jumped by more than 130 per cent in the same year, from 4.06 per cent in 2020 to 9.35 per cent in 2021.
That more and more Americans were choosing the fund investment route was further confirmed when both applications from American nationals and under the investment fund category doubled in 2022.
Wealthy Americans are familiar with fund investments as compared to investors from Europe and Asia. So, it was only natural for these investors to explore fund investments to qualify for fast-track permanent residence in the EU.
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With the real estate option permanently closed, more and more investors will shift to the investment fund route.
This means investment fund managers will have to cater to two different categories of investors. The first category will include those who are familiar with investment funds and have the confidence to explore complex options that cover multiple investment strategies and philosophies.
The other group will consist of real estate investors new to the route. They are likely to be conservative and prefer traditional and time-tested options that provide greater protection even with lower returns.
This means the investment fund landscape will witness a churn as fund managers come up with different types of options for all types of golden visa investors.
Fund managers are likely to skip the one-size-fits-all approach and come up with different types of offerings based on the investors’ risk profile, investment goals, as well as their preferred niches.
So, experienced American investors may choose funds that focus on distressed assets and other high-risk options while those forced to avoid real estate may choose more traditional offerings.
The biggest advantage with fund investments is that it offers far greater flexibility as compared to the real estate route.
This means even unorthodox options like funds that invest in luxury vintage automobiles or fine art may now become an easy route for HNIs to qualify for permanent residence in Portugal.