South Africans looking for an offshore base, visa-free access to Europe and the possibility of dual citizenship are increasingly investing in real estate in Portugal, says Sable International, specialist of migration, wealth and forex.
The Golden Visa program developed by the Portuguese government, which offers a financially accessible and efficient process, through which non-EU citizens can obtain residence permits and Portuguese citizenship through an investment in the country, remains very popular and in fact during the Covid crisis of 2020, showed no signs of narrowing.
By mid-2020, more than 8,736 residence permits had been issued since the start of the program, equivalent to 14,936 residence permits if family members of the main applicant were included.
With the visa, applicants and their families can live and work in Portugal as well as travel visa-free throughout the European Schengen area. “One of the main advantages of the program is that applicants do not need to immigrate to Portugal to hold the Golden Visa.
They only need to spend (on average) seven days per year in Portugal to meet the residency requirements of the program, ”said Andrew Rissik, director of Sable International.
“This means you can make a solid offshore investment and secure your family’s future without having to relocate to a whole new country.”
The Golden Visa not only allows its holder to live and work in Portugal, but also gives him the right to travel without a visa throughout the European Schengen area.
This was particularly attractive for executives wishing to work within the European Union (EU). Through the Portuguese residency program, South Africans can qualify for permanent residency after five years. Portuguese citizenship (an EU passport) gives you the right to live and work in the EU, which currently includes the UK.
Rissik said South Africans are primarily drawn to the prospect of dual residency, visa-free travel to Europe, the ability to invest in relatively affordable overseas property, and great tax benefits.
Get the golden ticket
To be eligible for the program, applicants must invest in the Portuguese economy. “There are a few avenues available to investors – the most popular are investing in private equity of € 350,000 and buying a property worth € 500,000 or € 350,000,” Rissik said. .
“Once you have invested, you will receive a residence permit, which allows you to enter and / or live in Portugal and to travel freely in most EU countries. Your Golden Visa is valid for an initial period of two years and is renewed for an additional two years every two years. “
To become eligible for permanent residence or citizenship, applicants must hold their investment with their visa for a full period of five years. “Applicants will need to spend time in Portugal during the visa period; but it’s not vast, ranging from one to two weeks a year, ”Rissik said.
As a resident holder, you must spend a minimum of 35 days in Portugal during this five-year period.
Rissik said most South Africans are drawn to the secure lifestyle. It was voted third safest country in the world in the 2019 Global Peace Index.
“The tax advantages are also compelling – Portugal has one of the most favorable tax regimes in the EU for foreigners wishing to become tax residents. Individuals who are not tax residents pay only withholding tax on income from Portugal.
“However, if a person becomes a tax resident and spends more than 183 days per year in the country, you are exempt from almost all foreign source income taxes under the NHR tax regime. There is also no inheritance, donation or wealth tax, ”said Rissik.
Aside from Covid-19, Portugal has a robust economy, he said. Since the global financial crisis, the Portuguese economy has grown from 2008 to 2020 to one of the fastest growing in Europe. Portugal recorded above average GDP growth. It has a leading technology hub and a strong manufacturing sector.
In real estate, Portugal has been ranked as the ‘hottest’ real estate market in Europe (Bloomberg 2019), with high accessibility, with one of the lowest house price-to-income ratios in Europe. TBEN named Portugal the most investing country of 2020 and “ Knight Frank ” predicts the best price growth in Portugal for 2020-2021 after Covid-19.
Attention the buyer
“We are seeing a high adoption of investments in Portugal, even through Covid, but the high demand also means that there are many unscrupulous operators who are selling properties which are bad investments or which
are not actually eligible for the Golden Visa, ”said Rissik.
“We have been on the ground in Portugal for property and visas since 2012, and we have the most South Africans who have invested there.
“You also need to look at all the options, is this just a Plan B, or are you planning to relocate and start a business or work there or do you want to retire in Portugal – you may find -being that a retirement visa is better for your needs than applying for a Golden Visa. “
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