Portugal’s “Golden Residence Permit” is gaining popularity among the rich investors from China who are seeking to buy property in beautiful locations in Europe. The Chinese are so far the largest buyers of the Portuguese scheme.
The deputy Prime Minister of Portugal Paulo Portas is the architect of the Portuguese visa system. According to him, this scheme had revived the Portuguese property market which had been hit hard by recession. The golden residence permit had so far brought almost €900 million to Portugal as real estate investment in less than two years. This figure is estimated to reach €2 billion by the end of 2015.
Portugal’s attractive property market in Lisbon presents to Chinese investors a convenient location in Europe from where they can also connect with businesses in other Portuguese-speaking countries like Angola and Brazil. “Chinese executives working in Africa can make a home in Portugal where their children can go to school and they can visit,” explains Miguel Frasquilho, head of Aicep, Portugal’s trade and investment agency.
Until recently, it was the US, Canada and Australia which were the first choice of residence for wealthy investors in China. However several cash-strapped European countries like Cyprus, Portugal, Malta, Hungary, Spain and Latvia have come up with residency programs for non-EU citizens who can buy residency permits of these countries by investing in their real estate. The advantage offered by these programs is that by purchasing a house or apartment, an investor can get residency rights of an EU country and can travel without visa to all 26 EU countries in the Schengen zone.
Since the Portuguese scheme was launched in 2012, it has issued 1,360 such visas. About 81% of these have been issued to Chinese nationals.
In Greece, an investor can get residency by buying property worth €250,000, while in Cyprus the requirement is of €300,000. In Spain one needs to buy property worth at least €500,000 for a golden visa. One third of the 134 permits issued in Spain have gone to Chinese investors.
According to several Chinese firms in Portugal, the Chinese investors do not plan to relocate entirely and most of them apply for these visas to have an alternative ready in case of economic or political instability in their home country.
Clean air, good education, religious freedom and a relaxed lifestyle were other factors that appealed to the Chinese investors buying properties in Portugal.
The Boston Consulting Group estimates that China has the second largest millionaire population (about 2.4 million in 2013) in the world, next only to the US. There are now about 152 Chinese billionaires according to report by the Forbes magazine. As such the Chinese migration to Europe has changed from “simple labor immigration to a multi-faceted situation,” says a report by the Chinese Academy of Social Sciences.
Portugal’s Chinese community till recently comprised only of 20,000 people approximately, most of who were running corner shops and restaurants. But this has changed dramatically and now wealthy Chinese can be seen shopping from high-end brands in Lisbon.
It is estimated that 64% China’s millionaires have already left the country or are planning to emigrate.