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Is Portugal no longer the destination of choice for the Chinese super-rich? – Economy

The analysis is from Bloomberg, which notes that in 2022, and for the first time in the history of golden visas, there are more Americans using the program in Portugal than Chinese.

The problem is not lack of demand. After all, “Runxue”, which means “plan to escape”, is the new term in vogue among the Chinese middle class. The term that combines the English word ‘Run’ (“to flee”, in Portuguese) and the Chinese word ‘Xue’ (“to study or to analyze”, in Portuguese) became viral in the social networks of the country.

And, in Portugal, the Chinese are traditionally the main investors in the gold visa program.

But while it is true that the country has a lot to offer — sun, beach, security and a free Schengen ticket — there are also obstacles to consider, such as the need for a face-to-face interview to obtain a visa, the manifest “antipathy” of the European Union for golden passports and visas and even the ongoing internal discussion.

Let’s go to numbers that help to understand the phenomenon.

First, Portugal’s golden visa program continues to attract investment. According to data from the SEF, the amount captured through golden visas rose 33% in the first half of this year, compared to the same period last year, to 316.2 million euros.

In the total for the semester, 649 Residence Permits for Investment Activity (ARI) — 94 in January, 94 in February, 73 in March, 121 in April, 112 in May and 155 in June.

Of these 649 golden visas, 124 were for North Americans and 105 for Chinese, the two dominant nationalities.

And this is a reversal that has never been recorded before, as Chinese investors have dominated the golden visa program since 2013 — which was launched in October 2012.

In the first quarter of this year alone, Chinese investment through golden visas fell by 60% to 20.7 million euros. It is recalled that, by comparison, in the first quarter of 2021, China led the top 5 by nationalities of the Residence Permit for Investment (ARI) program, with an amount raised of 51.7 million euros and 100 ‘gold visas’. ‘ granted.

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After all, since its creation and until the first half of this year, the ARI raised 6,416,041,013.55 euros in foreign investment. Of this amount, most corresponds to the purchase of real estate. In total, 10,903 golden visas were issued: two in 2012, 494 in 2013, 1,526 in 2014, 766 in 2015, 1,414 in 2016, 1,351 in 2017, 1,409 in 2018, 1,245 in 2019, 1,182 in 2019 and 2020, 1,182 in 65, 2020, 1,409 in 2022 (in the first half of the year).

Having the Portuguese ARI allows foreign citizens to reside and work in the country, move around the Schengen area (see the list of countries here) and benefit from family reunification. To gain access, one of the following conditions must be met:

  • transfer capital in an amount equal to or greater than 1 million euros to Portugal;
  • create at least 10 jobs;
  • acquire real estate with a value equal to or greater than 500 thousand euros;
  • acquire immovable property and carry out rehabilitation works in the total amount equal to or greater than 350 thousand euros;
  • transfer of capital for research (350 thousand euros) or to support artistic production (250 thousand euros);
  • acquisition of participation units in investment funds or venture capital funds dedicated to the capitalization of companies in an amount equal to or greater than 350 thousand euros;
  • transfer of capital intended for the constitution of a commercial company with head office in the national territory in an amount equal to or greater than 350 thousand euros.

In addition to the investment, candidates have to present all personal documentation, a criminal record certificate and also attend an in-person interview – which has proved particularly difficult for Chinese citizens given the restrictions imposed by their country in order to combat covid-19.

Since the beginning of the pandemic, China has practiced a ‘zero covid’ policy, which implies the immediate application of confinement measures, mass tests and restrictions on travel when an outbreak is detected in a certain location. But the insistence on strict measures, when the rest of the world sees an endemic phase for the disease, is also starting to divide Chinese public opinion, tired of successive confinements and restrictions.

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At the same time, it is tightening the control to gold visas. In March of this year, the European Parliament demanded an end to golden passports and stricter regulation of residency regimes, golden visas, stressing that both should not be granted to Russian oligarchs, at a time of heated confrontation with Russia over the invasion of Ukraine.

For MEPs, investment citizenship schemes (known as golden passports), under which third-country nationals obtain citizenship rights in exchange for a financial investment, “compromise the essence of EU citizenship”.

These regimes, they consider, are equivalent to “parasitism”, so they must be “progressively eliminated due to the risks they entail”. And, therefore, the European Parliament has asked the European Commission to present, before the end of its current mandate, a legislative proposal to that effect.

“European citizenship is not a good that can be traded or sold”, defended the MEPs, alluding to the regimes that still exist in Malta, Bulgaria (where the government presented a proposal for a law to end the regime) and Cyprus ( the executive announced the completion of the review of all Cypriot citizenship applications pending before November 2020).

As for golden visas, the European Parliament calls for the creation of common rules at EU level to harmonize rules and procedures, in order to strengthen the fight against money laundering, corruption and tax evasion.

Countries that grant gold visas, such as Portugal, are encouraged to carry out rigorous background checks on applicants (including their family members and sources of financial funds), create reporting obligations and require minimum attendance requirements. physical and active participation, quality, added value and contribution to the economy.

In addition to Portugal, Bulgaria, Cyprus, Estonia, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, the Netherlands and Spain also apply residency regimes for investment activity in which the required minimum levels vary between 60 thousand euros (Latvia) and EUR 1.25 billion (Netherlands).

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Internally, there is also an ongoing discussion about the Golden Visa Program.

On June 17, the parliament rejected the proposals of the PCP, BE and PAN to end these golden visas, as well as that of Chega for the enlargement of the regime, with the PS defending that it is time for evaluation.

During the debate, Pedro Filipe Soares, parliamentary leader of the Left Bloc, defended the end of the “immoral” regime, for the “defense of the dignity of our country”, arguing that “values ​​are of little value to these parties when what is at stake and the money”.

His party’s proposal, which provided for the end of golden visas, was rejected with votes against PS, PSD, Chega and Iniciativa Liberal and in favor of PCP, BE, PAN and Livre.

The PCP’s proposals, which sought to repeal the regime for granting residence permits for investment activity, had an identical vote and the PAN’s proposals, which also provided for the repeal of the regime.

Also unfeasible was a PAN bill to oblige the Government to prepare and deliver to parliament a report evaluating the impact of the golden visa program in the period 2012 and 2021, with the PS votes against, the PSD abstention and the votes of Chega, Iniciativa Liberal, PCP, BE, PAN and Livre.

Enough’s proposal to extend the regime was also rejected, introducing the possibility of a concession for the transfer of capital in an amount equal to or greater than 250 thousand euros, which would be “applied in investment in companies in the agriculture, research and development, tourism sectors. or environment”, with votes against PS, PCP, BE, PAN and Livre, abstention from PSD and Iniciativa Liberal and votes in favor of Chega.

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