How South Africans are getting European residency

The prospect of EU citizenship paired with a solid investment is attracting South African families looking for a plan B or to wanting to settle in another country.

Portugal’s €350,000 investment option particularly has been in high demand. John Dunn, immigration manager at Sable International, looks at the processes and the options for obtaining a Golden Visa.

Why choose Portugal’s Golden Residence Permit Programme?

The Portugal Golden Visa allows you to live and work in Portugal. It also affords you the right to visa-free travel throughout the European Schengen Area. After five years, you and your immediate family can qualify for permanent residence and potentially citizenship thereafter.

Benefits of having a Golden Visa include:

  • No visa required to enter Portugal
  • Visa-free travel within the Schengen area
  • You can live and work in Portugal with dependant family members
  • You can extend Portuguese residency to dependant family members
  • It has a very low minimum stay period (a total of 35 days within five years)
  • After just five years, you are eligible to apply for permanent residency or citizenship

Four routes to getting a Golden Visa

There are four ways you can obtain a Golden Visa.

Firstly a €1 million capital investment – This can be in the form of a fund deposit into a Portuguese bank account, the purchase of Portuguese stocks and bonds or a company investment.

Secondly, you could create 10 jobs – If you employ 10 workers at minimum wage and all employees pay social security you can qualify for a Golden Visa. There is no minimum investment for this route.

Another route is by purchasing a property of €500,000 or €350,000 – This is a popular option among investors. You must purchase a property, or multiple properties, with a minimum
value of €500,000. The property you purchase can be rented out.

Lastly, you can choose to make a private equity investment of €350,000 – There has been a lot of demand for the €350,000 property category for investors seeking a comparatively cheaper route to attaining a Golden Visa. “Compared to the straightforward property purchase of the €500,000 route, the €350,000 option has a few more requirements to satisfy, but the capital savings more than make up for the hassle,” said Dunn.

The €350,000 Golden Visa investment options

According to Golden Visa requirements, a €350,000 investment can be made in a number of ways:

  • Real estate rehabilitation: This category focuses on stimulating redevelopment of old, dilapidated buildings in what the government refers to as “regeneration zones”. You can invest in eligible properties that are over 30 years old or buildings located in an urban regeneration area. The property purchase price combined with the ex-VAT value of the rehabilitation work contract must equal at least €350,000.
  • Invest in research: Invest capital of at least €350,000 in research conducted by accredited institutions that are part of the national scientific and technological system.
  • Invest in an existing business: Invest in a business with a registered office in Portugal. A minimum amount of €350,000 must go to either incorporate or increase the share capital and create a minimum of five full-time permanent jobs for a minimum period of five years.
  • Invest in private equity funds: This is one of our most popular investment options, and involves an investment of €350,000 in regulated private equity funds. This can be an easier option for some as it avoids the hassle of looking for property and subsequent management.

Investing in The Vintage Hotel

“We’ve had great interest and success with a private equity fund offered by the purchase of the Vintage Hotel in Lisbon,” said Dunn.

The Vintage Hotel is a five-star hotel located in Lisbon’s city centre. Its superb location offers guests easy access to the surrounding neighbourhoods where they can experience Lisbon’s excellent nightlife.

Managed by an experienced hotel operator, it’s already running successfully and boasts a good income and capital growth potential. Through an investment firm, share in the hotel have been made available for purchase that fit the requirements for a Golden Visa.

“There’s already been an overwhelming amount of interest; with over 70% of the shares already been purchased – It offers investors an excellent way to attain a Golden Visa and a share of a professionally managed five-star institution,” said Dunn.

“Compared to other more traditional property GRV investment options, you can save up to €45,000 on your purchase expenses by investing in a solution like The Vintage Hotel.

“This route is gaining traction, especially with foreign investors, because it offers an attractive investment and provides you and your family members with the full benefits of Portugal’s Golden Visa programme.”

Benefits of The Vintage PEF investment

  • The €350,000 investment capital is more affordable than traditional property-based investment options.
  • The Vintage Hotel PEF offers holders a minimum 3.0% return per annum.
  • In addition to a 3.0% fixed base yield, Vintage PEF holders will enjoy 50% of all distributable income as well as 70% of any proceeds when The Vintage Hotel is sold.
  • The PEF is fully exempt from corporate income tax (CIT). Non-resident investors are exempt from Withholding Tax and Capital Gains Tax.
  • Quick processing timeline: You can apply for a Golden Residency Visa (GRV) as soon as 10 days after making your investment into The Vintage PEF.
  • Your investment will be professionally managed in Lisbon. As an overseas investor, this removes a lot of the hassle you might experience owning a property overseas.

Read: More South Africans are buying property offshore – here are the most popular spots

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How South Africans are getting European residency