Five things to consider when choosing a Portugal Golden Visa Investment Fund
At the beginning of 2022, the golden visa investment fund route returned to its original minimum threshold of €500K. Previously, between 2018 and 2021, the minimum investment fund threshold was just €350K, which significantly boosted its popularity among international investors looking to obtain Portuguese residency.
Alongside being a more affordable route to residency, the investment fund option is particularly appealing for it offers tax efficiency and the possibility of industry diversification. At present, there are over thirty funds that qualify for the Golden Visa program, and applicants can invest the minimum required across two or three funds, subject to their minimum subscription.
- How to choose which fund to invest in?
There is no correct answer. At Global Citizen Solutions, we have seen hundreds of clients making their investment decisions based on numerous factors. Some of our investors are highly skilled and knowledgeable individuals in the private equity/venture capital industry, while others are newcomers investing for the first time in funds.
Irrespective of our client’s diverse backgrounds, some similar factors are underpinning their investment decisions:
2. Previous investments
For example, if investors have experience in real estate, they usually consider other sectors like technology or healthcare funds to diversify their portfolio. Alternatively, investors with expertise in the real estate sector opt to invest in a real estate fund in Portugal. Various real estate investment funds qualify for the Golden Visa, including residential, commercial, hospitality, and agricultural land.
3. How will the investment fund acquire assets and what is the exit strategy?
A key point to consider is how the assets will be acquired and disposed of. Usually, there must be a clear and concise path from the moment the capital is deployed until the point where it’s returned to the respective investor.
4. What are the risks involved with my investment?
There are plenty of options available, ranging from low to high risk. You should always invest in a fund where you feel comfortable with the risk factor. Although investors have their own ways of assessing the risk levels of each fun, there are some common things to look out for, including the respective industry the person wants to invest in, and how much it’ll ultimately cost.
5. How long do you want to keep your investment?
The lifeterm of an investment fund is an important part to consider when deciding what fund to opt for. Given the Golden Visa timeframes (with permanent residence and citizenship being possible after five to six years), some investors may find that €500K is a significant sum of capital. In this case, investors would want a quick exit strategy that coincides with completing the Portugal Golden Visa Program. Meanwhile, for others, such capital merely represents a portion of their investment budget and can afford to maintain their investment for ten years.
Although most private equity/venture capital funds have a ten-year term, there are some golden visa funds that offer a seven-year timespan from subscription to liquidation. Note that those that have a ten-year term may have been raising capital for some time, which means that they have already been operating for two years already and may have a residual term for the newly subscribed investor of seven to eight years out of the ten year period.
The track record of the investment fund partners/advisors
Ultimately, the decision to invest in the Golden Visa also means trusting a qualified investment fund manager to manage your capital. It’s important that you get acquainted with a partner’s background and experience level so that you can get the best possible outcome from your partnership.
Fortunately, most fund managers in Portugal are available to meet our clients and devote time to explain their businesses and fund details, as well as solving any queries our investors might have.
Who we are
We’re Global Citizen Solutions, a boutique investment migration consultancy firm, offering second residency and citizenship by investment solutions for international families looking to enhance their freedoms, invest abroad, and/or relocate. Our team offers a bespoke end-to-end service to guide clients every step of their journey to securing the Portugal Golden Visa. Contact us for more information.
