Capital transfer of the amount of 350 thousand Euros, or higher, for the acquisition of units of investment funds or venture capital fund of funds dedicated to the capitalisation of companies, capital injected under the Portuguese legislation, whose maturity should be at least, of five years and, at least, 60% of the investments is realized in commercial companies with headquarter in Portuguese territory.
The Portuguese Golden Visa Investment Funds
There are a number of benefits to investing in private equity funds to be eligible for the Portuguese Golden Visa.
The Portuguese Golden Visa Investment Funds are professionally managed by experts on each specific sector.
You can obtain Portuguese residency from a minimum investment of 350 thousand Euros into a officially registered investment fund.
Venture capital funds are a tax-efficient vehicle — dividends and capital gains returned to investors may be tax-exempt.
Depending on the Golden Visa Investment Fund, they will offer a minimum return hurdle-rate usually between 1,5% and 6%, were managers will only be compensated if the fund performance is above a certain percentage.
Some Investment funds have the support of the Portuguese Government through subsidies or financed by the IFD (Instituição Financeira de Desenvolvimento).
The Portuguese Golden Visa Investment Funds are regulated and must comply with the rules stipulated by the Portuguese Securities Market Commission (CMVM), which means that fund managers are regularly audited by third parties.
To comply with the Portuguese Golden Visa Investment Funds legal requirements they usually have a maturity of at least 6 years, which means that the investment should stay in the Fund for that time. The Golden Visa Investment Fund is also obliged to invest at least 60% into companies which have their head office in Portugal.
An advantage of the Golden Visa Investment Fund is that compared to real estate you will not pay acquisition tax (around 6%) neither stump duty tax (0,8%) of the property value. By deciding to apply for the Portuguese Golden Visa through the investment fund will save you a lot of time and legal fees compared to real estate acquisitions.
Advantages of the Golden Visa Investment Fund application:
• Possibility to invest directly into the Real Estate development market in Portugal;
• Easiest and quickest way to be eligible for Portuguese Gold Visa, starting at 350 thousand euros;
• All investments will be audited and evaluated by certified and independent companies;
• Lower value that enables solid and good profitability investments in the Portuguese capital;
• Assets diversification - it won’t exceed 1/3 of the portfolio focused on more than one investment;
• Tax exempt on the withdraw for non resident and 10% for residents.
STEPS for the Golden Visa Investment Fund application:
1. The Management company will receive from the investor a KYC Form; Subscription Form and personal documents;
2. The Golden Visa investor will obtain his Portuguese tax identification number (NIF) and open a Portuguese bank account (checking and securities account);
3. The investor will transfer the money from his foreign account to his Portuguese bank account;
4. The investor orders the bank transfer to the Funds bank account.
5. The Management company issues a declaration necessary for the Golden Visa application and the Portuguese bank issues two declarations (money transfer overseas and certificate of holding the Participation units (shares);
Note: "US Persons" (investors with American citizenship or being tax residents in the US) need to open their Portuguese bank account with a FATCA compliant bank account as for example: Bison Bank; Banco Atlântico; Banco Carregosa.
Documents for the Golden Visa Investment Fund application:
The Applicant must present supporting evidence in which he has made the investment of the minimum amount required, individually or through a shareholder limited liability company of which the Applicant is the shareholder. The following documents must be presented for the Golden Visa application:
• Declaration of a credit institution authorized or registered in the national territory within Bank of Portugal, attesting the effective transfer of the amount equal to or above the legally required;
•Supporting document attesting the ownership of the units of investment, free from any charges and obligations (issued by the entity responsible for keeping an updated record of the units of investment holders, under the law, of the respective management regulation or of contractual instrument);
•Declaration issued by the holding company of the respective investment fund, attesting the feasibility of the capitalization plan, the maturity of, at least, five years, and the application of at least 60% of the investment in commercial companies with head office in national territory.
Investment Fund Caracteristics
The Portuguese Golden Visa Investment Funds are usually build up in a tax-friendly manner for foreing investors who want to grow their money or obtain the Golden Visa Residence Permit.
The fund is fully regulated by the Portuguese Stock Exchange Commission (CMVM). The investment fund is administered by the Portuguese Securities Market Authority. The fund, seen as a financing vehicle assures total transparency, liquidity, and compliance. Limited responsibility is secured by the fund shares, both for investors and fund portfolio.
Fund distributed dividends to non-resident investors are tax exempt * (not even withholding tax). The fund capital gains are tax exempt (at the share redemption or fund liquidation). Interests from subsidiaries financing are tax exempt. The distributed dividends from subsidiaries to the fund are also tax exempt. (For residents in countries listed in the Portugal Tax Authority’s “blacklist”: 10% withholding tax).
An investment portfolio is a basket of assets that can hold stocks, bonds, cash and more. Investors aim for a return by mixing these securities in a way that reflects their risk tolerance and financial goals. To respect the portuguese legal requirements for the Golden Visa it is necessary for the Fund to invest 60% into companies with their headquarter in Portugal.