Do you remember what happened in June 2022? The Portuguese Parliament rejected the proposals of the PCP, BE, and PAN, political parties that wanted to end the Residency by Investment Program (Golden Visa), as well as the proposal by the Chega political party to extend the regime. As well, the current ruling party, Socialist Party (PS), was defending that it was time to evaluate the last amendment which in their words was "a successful legal amendment that safeguarded the dimensions that are important in this regime."
What about October 30th, 2022, 2 days ago? The new set of amendments to the Foreigners and Borders Law, commonly known as the Immigration Law, have finally come into force with the introduction of new visas and residency permits. As well, the amendment provides a simplification in terms of family reunification and the granting of visas to immigrants from countries where Portuguese is the official language. These changes were approved by the Council of Ministers 5 months earlier, in June 2022. Since then, nothing has changed regarding the Golden Visa, despite warning and pressure to act regarding delays and problems identified in the procedures.
Finally, on November 2nd , 2022, the Prime Minister of Portugal stated at the Web Summit –one if the largest international conference held in Portugal – that "there are programs that we are obviously currently reevaluating, one of which is the Golden Visa, [as] it has probably already fulfilled the function it had to fulfill and at this moment it is no longer justified to maintain it […]. We are currently evaluating whether the Golden Visa still makes sense."
A moment of apnea and, in seconds, questions rose from all six continents: In which developed country with a democratic regime can a government debate between policies of attraction, while carrying out incomplete reforms lacking legal consistency? The answer is Portugal. Whilst setting up a true circus, the Portuguese Government is making fun of investment and immigration and playing with the expectations of foreign capital and national companies.
Portugal, the country where the government seems to ignore the problem of aging population, which according to the President of the Portuguese Demographic Association, will have a 14% impact on the Gross Domestic Product (GDP) in 15 years. This is putting the sustainability of the country at stake, with 22% of the population over 65 years old and with the aging rate going from 27.5% in 1961 to 182.7% in 2021, according to Pordata.
Portugal, the country that currently has an inflation rate of 9.8%, and whose government response was to grant a once-in-a-lifetime check of €125.00 euros to fight inflation, without realizing the consequences on the real population from the attribution criteria in view of the existing legal framework.
Portugal, the country where for every €100 euros earned by a worker, €37.6 euros go to the government, due to the weight of taxes and social security contributions, according to Eurostat data.
Portugal, the country where the government insists on maintaining budgetary support for the national airline (TAP), despite the record loss of €1.6 billion euros in 2021 and the threat of canceling more than 400 flights for the past two months of this year.
Portugal, the country where the restructuring of the Immigration Service was decided and approved by the Assembly of the Republic in November 2021, having already been postponed twice.
Portugal, the country dealing with a severe drought situation, with 3.3% of its territory registered in a mild drought, 64.3% in a moderate drought, 32.2% in a severe drought, and 0.2% in an extreme drought this year.
This is also the result of the policies adopted.
Notion. This is what the Portuguese government lacks: a realistic notion of the benefits of the Golden Visa Program such as the direct and indirect jobs it creates, the tax and administrative revenue it generates, the contribution to the rehabilitation of cities and heritage, the liquidity of the banking sector, and the investment it brings to Portuguese companies.
Nobody denies that the regime needs transparency, revision, and improvement, but any program or even any government requires it. Before such declarations are made, what can possibly be explained to families that decided to consider the legislation of a European country as good and reliable, where foreign investment reaches 4.5% of GDP and the tourism sector reaches 8%? And how can they ever feel safe in the legal framework and in the elected government given their sudden changes of mind?
To what extent or for what purpose were these statements made? If the programs are to be closed, please say which ones, when, and under what terms so that there is a minimum of reliability and trust in government policies. If they were just trying to manage the impact of the news about the Golden Visa holders benefiting from the €125,00 support measure, shame on you for not assuming a gap created by the legislator.
If it is to be concluded that certain programs have fulfilled the objectives, then please say what they were and to what extent they were fulfilled.
If it is to be analyzed whether certain programs make sense, data must be collected, keeping in mind that the democratic system invites you to hear the representatives of the sectors so that decisions are made based on transparency, objectivity, and concrete and real data, even when governing majorities are tempted to neglect the need and usefulness of the dialogue with the electoral community.
Last week, there were talks that the renewal process would be digitized to overcome the logistical inability of the entities to respond in a timely manner. This week, an unprepared declaration of ending the program was made, and there is gossip that it may happen perhaps in 2025. Where are we, Mr. Prime Minister?
The market is full of rumours, and people are impatient by nature. There are so many countries that envy the success that Portugal is having among investors. Will you be responsible for the loss of confidence among foreign investors in the country when we are entering one of the most difficult economic and social periods in Europe and the world?
Sara Sousa Rebolo
Partner at Prime Legal