Ending the Golden Visa program in Portugal: how will this affect your chances of obtaining residency and citizenship in the EU?

Last week, news of Portugal discontinuing its Golden Visa program shocked the world of residency abroad. This comes after Ireland discontinued its own program last week. Both nations introduced Golden Visas in 2012 during the Great Financial Crisis. The goal was to prevent a banking collapse by attracting foreign capital to the domestic real estate market and boosting property values and bank balance sheets.

Many promising foreigners with pockets full of money made a significant contribution to European citizenship, to the tune of billions of euros. But this good fortune has sparked political resistance in recent years. Portugal, for example, reports that between 2012 and last year it accepted almost 12''000 families who received the Golden Visa. This may not seem like a lot, but the impact on Portugal's real estate market has been huge. Property values have risen by more than 75% since 2012. But more than half of Portuguese earn less than €1,000 a month ... and now can't afford to buy a home.

One of the features of the Golden Visa program that has made it both attractive and disruptive is that the visa does not require presence in Portugal. Many applicants bought a property, spent at least two weeks a year in it, and either left the place empty or rented it out via Airbnb for the rest of the time. This has led to two distortions in the real estate market. The first is that the 'golden price of a visa' has become the starting price in many parts of Portugal.''Sellers were pricing their properties with foreign funds in mind, thereby increasing the value of their homes beyond the means of local Portuguese. The second is that with so many properties unavailable for long term rentals or short term rentals, long term rentals have become unaffordable for locals. In Lisbon, short term rentals make up over 60% of listed properties. Lisbon is the third most expensive rental housing market in Europe afterMilan and Paris.

But the problem is not just political pressure from within. In Ireland, 91% of golden visa recipients were Chinese nationals. The Chinese''also accounted for half of all golden visas in Portugal, with Brazilians, Turks and South Africans taking up the rest. Chinese participation in the program declined after 2016, but increased again due to the country's zero COVID policy. Justified or not, the perception that the golden visa program serves as a bypass door for Chinese to enter the EU, as well as for money laundering and other undesirable activities, has led to criticism from Brussels. Late last year, European Commission President Ursula von der Leyen warned that the region's values "are not for sale." European pressure has already forced Malta, Cyprus, Latvia and Bulgaria to abandon their programs. So it may only be a matter of time before Ireland and Portugal follow their''example.

Paradoxically, in recent years, the popularity of the program in Portugal among Americans, as well as the expected influx from Ukraine, may have been the nail in the coffin. However, there is still hope. Existing Golden Visa's will be extended if the recipient either lives in their Portuguese housing or rents it on a long-term basis. And Portuguese Prime Minister António Costa has said that the country's D7 "digital nomad" visa, which allows foreigners to live in the country on foreign income, should be the main route to residency. There is also no threat to the D2 visa available to entrepreneurs setting up businesses in the country.

And, of course, there are still EU residency programs in Greece, Spain and Montenegro, as well as''kinship-based programs in several countries. But the trend is becoming clear. If you are interested in obtaining an EU residence permit, especially if your ultimate goal is a European passport, now is the time to act. Find out more about our new chief global diversification expert here.