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Why Investment Funds Are the Top Choice for Portugal Golden Visa

Investment Funds Are the Top Choice

Also known as ARI (Autorização de Residência por Investimento), the Portugal Golden Visa program (by investment funds) offers significant advantages for foreign investors seeking European Union residency.

Portugal ranks among the safest countries in the world, offering a mild climate and a relatively low cost of living, when compared to other European countries. With access to high-quality healthcare and a solid education system, Portugal is an attractive destination, for both living and investment.

In this article, we will cover:

  • An overview of the Portugal Golden Visa Program;
  • How to choose the best option to qualify for a Portugal Golden Visa;
  • 4 Key aspects to consider when choosing an investment fund for the Portugal Golden Visa.

Overview of the Portugal Golden Visa Program

The Portugal Golden Visa stands out for its multiple benefits, with several investment options for securing EU residency. The top options are:

  • Job creation (at least 10 jobs), by starting up or supporting investing in companies and startups in Portugal;
  • Investment funds, by investing €500,000 in an eligible fund;
  • Cultural preservation: by contributing €250,000 to support national culture or arts.
  • Research, by investing €500,000 in technological development and research in Portugal;
Investment Options for the Portugal Golden Visa Program

The Golden visa not only allows for living, studying, and working in Portugal, but after 5 years, Golden Visa holders are also eligible to apply for Portuguese citizenship.

Choosing the Best Investment Option for the Portugal Golden Visa

When selecting an investment route, you should consider the following factors for each option:

  • Local Presence and Involvement: Evaluate how much time do you want to spend in Portugal and how much do you want to be involved indirectly managing your investment.
  • Timing for the Reimbursement of your investment: Consider the likelihood of recouping your initial investment.
  • Potential Return on Investment: Assess the expected return for each investment type.
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Investment funds have emerged as the most popular and straightforward path to securing a Portugal Golden Visa. By meeting a few key requirements, investors and their families gain the right to live in Portugal and free movement within the Schengen Area, covering the 27 EU countries.

4 Key Aspects to Consider When Choosing an Investment Fund for the Portugal Golden Visa

4 Key Aspects to Consider When Choosing an Investment Fund for the Portugal Golden Visa

Once you decide to pursue the Portugal Golden Visa through investment funds, the next step is selecting the most suitable fund for your needs. To make an informed choice, consider the following 4 critical factors:

1. The eligibility of the Fund

The first aspect to be checked is the eligibility of the Fund. Not all Funds are eligible for the Golden Visa. The applicant must:

  • Ask a local law firm to verify the Fund By-laws and to validate the eligibility to the Golden Visa Program
  • Ask the Fund Management Company to present a legal opinion on the eligibility of the Fund (preferably a legal opinion issued by the legal department of one of the Big 4 and/or a legal opinion issued by a law firm recognized as a specialist in Administrative Law)

2. The business sector in which the fund invests

It is important to check at least 2 aspects:

  • The resilience to crises of the business sector in which the fund invests.
  • The growth potential of the business

3. Analysis of risk and potential profitability

This analysis will always depend on each investor's preferences, however it will always be important to validate:

  • The investment reimbursement, particularly if the Fund By-laws provide for some type of security for the Golden Visa investors, including guaranteed first priority in the Distribution Policy
  • The profitability, particularly if the Fund By-laws provide specific indication on the target IRR for Golden Visa investors

4. USA-FATCA Compliance and PFIC ready

Specifically, for USA citizens it is fundamental to verify that the Fund is fully USA-FATCA Compliant and if the Fund Management Company can provide, if required, the PFIC documentation.

After considering all these aspects, to help you determine the best investment option for your Portugal Golden Visa application, you can take this quick online test.

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Magnify Capital Partners provides access to investment funds, tailored to the Portuguese Golden Visa. Our 360 degree services can guide you through the entire Golden Visa.