Portugal’s golden visa scheme, which once offered a direct route to residency through property investment, has undergone significant changes. With the government’s tightening of regulations in response to housing concerns, the scheme has evolved, presenting new opportunities for investors.

The golden visa program, launched in 2012, initially attracted considerable funds, primarily from China, Brazil, and the United States, totaling €7.3 billion. However, approximately 90% of this investment flowed into real estate, contributing to rising property prices in Portugal and prompting concerns from both local authorities and the European Commission, which cited security risks associated with such programs.

In response, the Portuguese government shifted its focus away from real estate investments in major cities and introduced new regulations. The latest changes have effectively redirected investors towards alternative channels, with investment funds taking center stage.

Now, to be eligible for the golden visa, applicants must transfer €500,000 to one or more qualifying funds. This shift is expected to become the primary avenue for golden visa investments, a change welcomed by sustainable agriculture investment fund Pela Terra, which is already regenerating farmland in the Alentejo region.

The move towards investment funds aligns with the evolving sentiment among investors who seek alignment with their values and ethics, as well as a desire to contribute positively to the community.

While the full impact of these changes is yet to be quantified, industry experts anticipate that investment funds will soon represent 80-90% of all golden visa investments. However, some caution that the elimination of real estate investments may deter overall investment in Portugal, as neighboring countries like Spain still allow property investments through their golden visa programs.

Despite uncertainties regarding the new rules, Portugal’s golden visa scheme continues to attract interest from investors looking for alternative paths to residency. As the landscape evolves, the resilience and adaptability of the program will determine its attractiveness in an ever-changing investment world.