Portugal Will No Longer Issue ‘Golden’ EU Visas

Portugal will end golden visas for non-EU citizens. Officially, it’s a response to limited housing. But the EU has long urged Portugal to stop issuing the visas, with officials saying they facilitate money laundering.

Five hundred thousand euros ($530,000) for a residence permit in a Schengen zone EU country: That’s the deal the Portuguese government has been offering rich foreigners since 2012. About 12,000 investors have taken advantage of it to date, effectively purchasing an entry ticket to the European Union for themselves and their families.

Now Portugal is calling time on its golden visa program, partly in response to pressure from the European Union. Prime Minister Antonio Costa has announced that the program will expire on March 16.

“It’s good that the golden visa is finally being abolished — they should never really have introduced it,” said Ana Gomes, a former Socialist Party member of the European Parliament who has opposed the program since its introduction. “They were an invitation for money laundering, and they made it possible for criminal and terrorist organizations legally to infiltrate the Schengen zone.”

Gomes said more than half of the people who applied for golden visas were from countries where money laundering is particularly prevalent and added that Portugal never investigated where their funds came from.

Portugal Has a ‘Reputation’ as ‘An Investment-Friendly Country’

Originally billed as a program to boost Portugal’s economy, which was at rock bottom a decade ago, the golden visas have above all proved a source of income for the property sector. Instead of creating new companies and jobs, rich foreigners simply purchased luxury apartments in Lisbon and the surrounding area. The majority of these investors were Chinese, followed by Brazilians, Turks, South Africans, and Russians.

The program brought in about €‎7 billion for the country, almost 90% of which came from the purchase of the property. According to statistics from the Portuguese Immigration and Border Service, only 22 visas were issued for job creation, resulting in a mere 280 new jobs in over 10 years.

Hugo Santos Ferreira, the president of the Portuguese Association of Real Estate Developers and Investors, is not at all happy about the proposal to end the golden residence permits. “It’s an attack on all foreign investors who want to invest their money in Portugal,” he said. “Portugal will lose its credibility and its good reputation as an investment-friendly country.”

Santos Ferreira said Portugal needed international investors to strengthen its economy and couldn’t afford to do without an important instrument that brings in over €600 million per year. “On top of that, the program has created thousands of jobs in the construction and property sector,” he said.

Housing Prices, EU Criticism Shine Spotlight on Visas

In recent years, the price of real estate in Portugal has skyrocketed, particularly in its two biggest cities, Lisbon and Porto. Critics have said the golden visa program is partly responsible, as well as the fact that more and more EU citizens are buying houses and apartments in Portugal — at prices Portuguese people can no longer afford.

“The golden visas have prompted considerable price increases, especially at the top end of the market,” Gomes said. And this is the argument that the government has now adopted to justify shutting down the golden visa program. Gomes said the official line was just a pretext, and it was increasingly harsh criticism from the European Union that was ultimately responsible for the program’s imminent end.

The criticism primarily concerned the often dubious origins of the visa applicants. Since the start of the war in Ukraine, Russians have been banned from investing in Portugal and excluded from the golden visa program. But, Gomes said, countries such as China and Vietnam, whose wealthy citizens are eligible for golden visas, are not exactly models of transparency either.

Santos Ferreira said all transactions in Portugal were strictly controlled. He acknowledged that there are bad actors everywhere, but he doesn’t consider that a reason to abolish the golden visas. “No one’s talking about closing down the banks,” he said, “although it’s well known that money can be laundered there, too.”

He said he hoped that the government would back down at the last minute and that the golden visas might continue in some other form, but it looks as if this is the end of the road for Portugal’s €500,000 Schengen entrance card.

“It was simply too untransparent and dangerous,” Gomes said.

It remains to be seen what will happen to holders of existing golden visas. According to some reports, their residence permits will only be renewed if they are actually living permanently in Portugal.