Portugal is to continue with its golden visa program that grants permanent EU residence permits to wealthy foreigners, and is even set to lower the entry requirements, the Portuguese government has said.
The announcement comes in response to calls by Portugal’s opposition to scrap the scheme following allegations of corruption and wrongdoing in the administration of the scheme.
But the government has stayed firm on its stance to continue the program that has brought millions in revenue to a struggling economy. “The golden visa has brought 1.27 billion euros of investments to Portugal in two years. It would be idiotic if we closed shop and other countries earned this money,” Portugal’s Deputy Prime Minister Paulo Portas said in defense of the scheme.
The golden visa program has been particularly popular among Chinese, Angolan, Brazilian and Russian nationals, especially as it entitles them to reside and travel freely in the EU Schengen zone. Of the 1,500 golden visas issued in 2014, the majority were issued to Chinese nationals, followed by Brazilians and Russians.
The scheme requires applicants to invest at least €500,000 in real estate, which is considered a bargain in the Portuguese capital Lisbon. Analysts report that a significant number of luxury apartments in Lisbon have been recently snapped up by Chinese nationals.
The golden visa program has recently been dogged by allegations of corruption and money-laundering. The problems surfaced in November last year with the resignation of Portugal’s interior minister Miguel Macedo and the arrest of 11 civil servants, including the head of the immigration service, following an investigation into alleged corruption linked to the allocation of residence permits.
Additionally, some of the investors with golden visas are alleged to have acquired their wealth through criminal means. In one case, a Chinese golden visa holder is said to be awaiting extradition to China for fraud and other serious crimes.
Portugal’s opposition claims that Portugal’s golden visa scheme is allowing international money launderers and criminal organizations an easy route in to Europe, and is urging the government to shut it down. “We’re issuing visas to people whose sources of income are unknown,” says Joao Semedo of Portugal’s opposition party “Bloco da Esquerda”.
Another criticism of the program has been that it has not sufficiently contributed to the Portuguese economy. According to Sergio Alves, general secretary of the Portuguese-Chinese Chamber of Commerce, most beneficiaries of the golden visa program have only purchased luxury apartments and have not made any significant investment in the economy. “It is being used exclusively to buy real estate. Most of the Chinese who buy don’t even live here on a permanent basis,” he says.
Despite the criticisms, the golden visa scheme has proved to be beneficial for several sectors of the Portuguese economy. The investment in real estate has actually led to a boom in the luxury real estate market. “The golden visa law is the best thing the government has ever done to help Portugal. It is straightforward and has promptly brought investments,” says one real estate agent.
The real estate boom has put Portugal back on the map of wealthy investors, and has also led to the recovery of Portugal’s construction industry. Several Portuguese and Chinese companies have also sprung up to offer complete packages for wealthy clients, assisting with everything from visa applications, real estate purchases, and related personal services.
In light of the lucrative industry growing around the golden visa scheme, Portugal’s government is continuing to back the scheme, and is even set to lower the investment requirement for a golden visa. A new rule might allow an investment of just €350,000 in the refurbishment of old buildings, science projects, or art projects to be sufficient for a golden visa. Additionally, investment in underdeveloped regions would allow for an additional 20% discount on the total investment amount required.
“The competition to win over wealthy foreigners has become tougher,” says deputy PM Portas. “Ultimately, we are competing with 13 other countries.”
And addressing concerns about wrongdoing in the administration of the golden visa scheme, Portas said, “Those who are guilty will bear the full rigor of the law.”
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