After closure of real estate path, Portugal still offers a exciting golden visa opportunity through investment fund investors who wish to settle in Portugal. This route is gaining traction after portugal shutdown real estate investments directly or indirectly. They must maintain their fund for maximum 6-7 years until citizenship is obtained while maintaining their residency visiting Portugal 2 weeks yearly. The first steps involved are creating a tax number and opening a bank account in Portugal.

Why Investment Fund

Investment funds carry advantage and disadvantages depending on your convenience. You put capital at risk. At the same time the more risk you take, it get rewarded handsomely (high stakes game)

  • Pros – Diversification, Invest in different Industries/sectors, Low setup costs, Low taxes, High returns, Easy exit,
  • Cons – High investment threshold, Risks, Profit sharing, Holding period, Complicated fee structure.

Minimum Investment

  • €500,000 –  Capital transfer with a value equal to or above €500,000 Euros, for purchasing shares in investment funds or in venture capital geared to capitalize small and medium companies that, in turn, must present a feasible capitalization plan. The Government does not offer discount with investment funds.

Investor Eligibility

  •  Non-EU/EEA citizen or a non-Swiss citizen
  • Over 18 years old
  • Have a No criminal record
  • Have sufficient funds obtained legally.
  • Experience with trading financial instruments eg. stocks, equity, bonds, investment funds, securities etc.

Fund Eligibility

The IF regulations are governed by Law 18/2015, of March 4. For Golden visa program, Portugal requires a Capital transfer of the amount of 500,000 Euros, or higher, for the acquisition of units of Private equity (PE) funds which invest in companies not listed in stock market or venture capital (VC) fund of funds dedicated to the capitalisation of startups companies.

The General conditions for capital injected under the Portuguese legislation, whose maturity, at the moment of the investment, are..

  • Investment must be held for at least, of five years and, at least,
  • 60% of the investments invested in companies headquartered in Portugal.
  • Head office in national territory

Yields: You should expect returns of 3-5% a year, for example when the fund ends in 5-10 years.

Fund costs: Here are the brief overview of costs you should expect from subscribing to an Portugal investment fund

  • Subscription fee – 1%-5%
  • Annual Fund management fee – 0.75% to 2.75% of the funds value.
  • Performance fee –
  • Additional Legal costs
  • Success fee (paid to fund managers) when dissolving the fund.

Taxes: Portuguese non-residents are generally exempt from paying taxes from dividends and capital gains on the investment fund. If you are a tax resident in Portugal, 10% of withholding tax on distributions apply.


Investment funds (private equity, VC fund) sold for the purpose of GV program must

  • Fund Regulated by Portuguese Securities Market Commission (CMVM),
  • Must not invest directly or indirectly in real estate market.
  • Fund manager is a depositary financial institution or Bank of Portugal regulated by central bank.
  • Fund advisor is external Fund Management company.
  • Audited by Portuguese Tax Authorities complying with tax laws.
  • Comply and eligible for Golden Visa regulation.
  • Disclose invested sectors, strategy risk and exit strategy.

The CMVM Investor portal regularly publishes a list of securities and investment funds approved by the commission.

Processing Times

Due to significant backlog resulting from suspension of real estate and also restructuring of immigration agency, AIMA, it takes anywhere 1.5 to 2 years to get a residence permit in Portugal for investment fund. The Good news is the waiting time is counted towards citizenship period of 5 years, making Portugal even attractive for investors.


Prospective investment must be careful with Investment funds as they carry risks.


The Fund owners must clearly disclose investor of the following:

  • Characteristics of financial instruments (type of financial instrument, start date, date and method of reimbursement, interest/dividend payment date, method of calculating return on investment)
  •  Risks (market, capital, credit, counterparty, interest rate, exchange rate, liquidity and legal/tax);
  • commission fees pertaining to the securities account, subscription, reimbursement, redemption and/or payment of interest/dividends);
  • how to divest (early repayment, sale, exchange);
  • Exit strategy and penalties
  • Tax commitments
  • any conflicts of interest (e.g. of the intermediary, issuer, trader).

2.Fee Structure

Full disclosure without any hidden costs.

  • Transaction fee – Payment of the reception, transmission or execution or a purchase or sale order given by the investor.
  • Registration and deposit fee – Payment for the registration and deposit service of financial instruments in each investor’s account (also called the custody fee or safekeeping fee).
  • Fee on transfer of financial instruments between accounts – Payment for the transfer of financial instruments registered in an investor’s account to another account.
  • Dividends/Interest payment fee – Payment for the deposit into the investor’s account of the amount of dividends/interest corresponding to the shares/bonds owned.
  • Corporate events commission – Payment of the investor’s exercise of rights of the securities held, such as participation in capital increaseS, company spin-offs or mergers.
  • Subscription and redemption fee – Cost paid by the investor at the beginning and end of the investment. For some funds, redemption fees depend on how long the participant has held the units (IUs).

3.Application Steps

The steps for the initial application look something like this:

  • Get a Portuguese fiscal number (NIF) and open a local bank account.
  • Identify and make your investment (and make sure to consult a local lawyer before finalizing anything)
  • Gather all required documentation from your country of origin (at most three months before submitting your application).
  • Have it all legalized and translated into Portuguese.
  • Gather necessary documentation in Portugal (your lawyer can help with this)
  • Fill out and submit the application for the Golden Visa (typically through your lawyer).
  • Pay the processing fee.
  • Wait until you hear back from SEF with a preliminary approval.
  • Pick a date, time, and place where you will meet in person for your biometrics appointment.
  • Bring along the originals of the documentation that was submitted with the application to your in-person appointment.
  • Wait for final approval.
  • Get your residence card.
  • Repeat a substantially similar process at the end of year 2 for the renewal.

Residence Permit

The ARI residence permit is granted for 5 years and renewable.

US Citizens

US citizens applying for Portugal GV must be aware of FATCA and PFIC. Investment funds and banks need to consider FATCA regulations. PFICs (Passive Foreign Investment Companies) are taxed by the IRS. A foreign investment fund is considered a PFIC if either income test or asset test is met:

  • Income test—75% or more of the corporation’s gross income is passive income
    – Asset test—50% or more of the corporation’s average assets produce or could produce passive income.

Here are some tips for US investors

  • Be sure the Portuguese bank you open an account at is FATCA compliant and that they can provide custodian services to US investors.
  • File IRS form 8621 annually starting from the first year of investment; otherwise, you will likely be subject to high-interest penalties. It’s highly recommended to use a qualified expert for this.
  • It’s best to do the QEF election in the first year and annually after that. (It’s possible to make the election in a subsequent investment year, but it becomes more complicated).
  • Ask if the fund provides a PFIC annual statement—for it to be valid, the statement needs to be issued by the PFIC and signed by the authorized representative.

Questions to Ask

Nomad Gate community has put together a nice guide for choosing the best investment fund. Prospective investors must be mindful and must do their own research, to be on a safe side.

  • Which strategy do I prefer (Conservative, Balanced or Aggressive)? Is capital preservation or maximizing potential return more important? How much risk am I willing to take?
  • Which sector do I want to invest in (real estate, farmland, healthcare, tech companies, wine industry, etc.)?
  • Is it important that it’s an ESG fund?
  • How long can I keep my capital locked in?
  • Do I want to invest only in one fund or further diversify the investment? Some funds require you to make the full €500,000 investment solely into their fund. Others let you acquire units for a smaller amount if you wish, allowing you to split the investment into more than one fund.

You must ask the following questions to fund manager or advisors

  • What are the credentials and track records of the fund’s managers and advisors? In case it’s a real estate focused fund, what is the developer track record? Do they have experience with Golden Visa investors?
  • What are the fund’s investment strategy and risk profile?
  • How diversified is the fund (how many companies, real estate projects, etc. does it invest in, and how different are they)?
  • How much leverage do they use for investments?
  • What is the target fund size, and how much have they raised so far? Have they reached their first close? What is their contingency plan if they don’t raise as much funding as expected?
  • How much “skin in the game” do the managers/advisors have (how much have they invested themselves)?
  • What is the expected target return per annum?
  • Does the fund distribute dividends (how often and how much)?
  • What are the fees (subscription fee, management fee, performance fee)? Is the subscription fee additional or included in the investment amount? Does the stated management fee assume a specific fund size (will the percentage be higher with a smaller size)? Does the performance fee have a hurdle?
  • Do they provide annual PFIC information statements (for US investors)?
  • What is the exit strategy for investors? Is it possible to exit before the fund term ends?

Please contact us for more information.