It is one of the oldest countries in Europe, with a capital that is four centuries older than Rome. Its language, heavily influenced by Arabic, is spoken by more than 236 million people in nine countries. This is Portugal, a beautiful land steeped in culture, where you will find the latest in technology seamlessly coexist with the oldest in history; where almost every Portuguese person speaks fluent English. Add to that, it is the third-safest country in the world, according to the 2020 Global Peace Index.
Predictably, Portugal has flourished not only as a tourist destination but also as a country worth investing in or even relocating to. Investing in a European country may sound odd in the time of the pandemic, especially given that Europe is one of the most affected regions. However, it remains a powerhouse of global trade, finance, tourism and culture. Moreover, Portugal has fared much better on the Covid front — as of November 11, the country had reported 187,000 Covid cases, with 3,021 deaths. Compare that to neighbouring Spain’s almost one million cases and more than 42,000 deaths.
Besides, there is general consensus that Portugal will bounce out of the Covid crisis faster and stronger than many other advanced economies. One of the reasons for this optimism is that Portugal has nurtured the twin engines that make it an enticing investment migration hotspot — the Golden Visa (GV) and the Non-Habitual Residence (NHR) programmes. GV is targeted at non-EU residents and citizens, while NHR has been designed for those earning retirement or passive incomes.
The Golden Visa programme provides the simplest and most economical route to citizenship in the European Union (EU).
“The Golden Visa programme provides the simplest and most economical route to citizenship in the European Union (EU),” says Jeremy Savory, CEO and Founder of Savory & Partners, a multiple government-approved agency, specialising in second citizenship and residency by investment.
Unlike other European Union citizenship options — for example, Malta or now closed Cyprus, which necessitates an expenditure of €1 million-2.5 million — Portugal’s GV programme can be accessed by investing €500,000 (Dh2.1 billion) in its mature real estate market, or €350,000 if the property is over 30 years old and renovated. Additionally, according to estate planning lawyers a 20 per cent reduction is granted if the property is in low-density areas, bringing the cost down to just €280,000.
Moreover, the Portugal government recently allowed birthright citizenship to children born to parents who have held the Golden Visa for at least a year, increasing its appeal to people looking for second citizenship. Similarly, NHR is designed to attract high-net-worth individuals who are seeking a safe, tax-friendly country to relocate to in Europe, and Portugal offers just that. When such individuals arrive in a country, they inevitably lift property prices and stimulate the economy, as they come with capital and expertise in tow. “We have seen first-hand the growth trajectory and all our clients are falling in love with the country,” says Savory.
Savory & Partners has been operating in Portugal for several years, assisting a diverse clientele including members of ruling families, vice presidents of FTSE 100 companies and ultra-high-net-worth individuals. It has successfully processed more than 1,100 approved families and individuals and continues to leverage its extensive experience to guide potential clients in obtaining their dual citizenship and becoming global citizens. “We believe in providing a customer-centric approach to our clients, which focuses on creating positive experiences for the customer by delivering on expected results and building meaningful relationships,” adds Savory.
The firm has a branch office in the prestigious Chiado district of central Lisbon, which enables it to better support its Golden Visa clients, all the way through their citizenship application submission.
Window of opportunity
However, potential investors may have a limited window of opportunity and need to act fast. Savory explains that, in general, citizenship by investment (CBI) and residency by investment (RBI) programmes regularly evolve and regulations, economic needs, public sentiments all influence the availability of such programmes. His firm has been proactively encouraging investors to submit their applications soon to avail of the best opportunities, with vaccine optimism kickstarting pent-up demand for Golden Visa properties again.
Jose Covas, the President of the Portugal chapter of the Royal Institute of Chartered Surveyors (RICS) — which is the globally recognised body for international standards in real estate valuation — agrees that in residential real estate, currently there exists great opportunities due to distressed sales and the inherent growth of the rental market. It is also expected that the European Union funds received by Portugal will, in part, be channelled towards improving the infrastructure and public transport networks. “The latter will accelerate the residential market in some areas close to major cities, in particular Lisbon,” explains Covas, noting that yields in Portugal, especially in Lisbon, are above other European capitals.
“The lower tickets of €280,000 can also offer interesting returns to investors in areas with tourist potential,” he says. As the US dollar weakens, it would be a prudent step to diversify into one of the other main currencies, like the euro. Even more so if your core business currency is pegged to the US dollar.
The Covid-19 pandemic has highlighted the importance of having a plan B country as a second residency or citizenship by investment. And Portugal, especially Lisbon, is likely to be on top of the list of those options. Recent analysis by property specialists Knight Frank identified Lisbon as one of the only four major prime residential markets expected to see growth in 2020. Forbes too recently listed Portugal as one of the top three countries to live in after the pandemic. The magazine noted that with a stable political and social environment, a secure society, a highly skilled and English-fluent labour force and an excellent quality of life, ‘Portugal is Europe’s best-kept secret’.