The Golden Migration May Be on Borrowed Time

Summary

The Golden Visa program in Portugal has become increasingly popular, especially with US applicants seeking EU citizenship amidst geopolitical uncertainty. Despite concerns over housing crises and potential misuse for money laundering, the program has boosted the economy significantly. However, new restrictions and EU pressure may signal the end of this investment opportunity, with some countries already increasing thresholds or ending programs.

Takeaways

• 🌍 In times of geopolitical uncertainty, a second citizenship is seen as a valuable asset, with the Golden Visa program allowing wealthy individuals to essentially purchase a second passport.
• 📈 The Golden Visa program gained popularity during Europe's debt crisis as a means to attract investment and stimulate economic growth.
• 📊 There's been a significant increase in demand for Golden Visas, particularly from countries like China, Turkey, South Africa, Brazil, and the US, seeking EU citizenship.
• 🏆 Portugal stands out as a top destination for Golden Visa applicants, offering an appealing quality of life and a path to full EU citizenship.
• 💵 The Golden Visa requires a substantial investment, with the exact amount being half a million Euros.
• 🔝 In 2023, the US led in the number of applicants for Portuguese Golden Visas, with indications of an even greater increase in 2024.
• 🏠 The real estate boom in Lisbon, fueled by Golden Visa investments, has led to a housing crisis and local discontent due to increased property prices and rental costs.
• 🚫 New restrictions have been imposed on Golden Visas, redirecting foreign investment to less traditional sectors and aiming to add more value to the local communities.
• 💼 There's growing pressure from the EU to end Golden Visa programs due to concerns about money laundering and corruption, especially after the Russian invasion of Ukraine.
• 🔄 The Portuguese government is ending the Golden Visa for real estate purchases to encourage investment in strategic sectors of the economy, such as solar infrastructure.
• ⏳ The Golden Visa program is facing an uncertain future, with other countries like Spain ending their programs and Greece increasing the minimum investment threshold.

Q & A

What is a Golden Visa and why is it called 'golden'?

A Golden Visa is a residency permit issued to individuals making a substantial investment in a country, often leading to citizenship. It's called 'golden' because it requires a significant investment, typically half a million Euros.

How did the Golden Visa program become popular in Europe?

The Golden Visa program gained popularity during the European debt crisis as a strategy to attract investment and stimulate economic growth.

Which countries are showing a significant increase in demand for European citizenship through Golden Visas?

Countries like China, Turkey, South Africa, Brazil, and the United States are showing a significant increase in demand for European citizenship through Golden Visas.

Why is Portugal particularly appealing for Golden Visa applicants?

Portugal is appealing due to its high quality of life and the full EU citizenship program, which is considered the most attractive in Europe at the moment.

What was the situation of Golden Visa applications from the United States in 2023?

In 2023, the United States took the top slot for the most Portuguese Golden Visa applicants.

What are the new restrictions on Golden Visas that have changed the price and terms?

New restrictions have been introduced that often push foreign investment into less favored sectors of the economy, changing the price and terms of Golden Visas.

How has the real estate boom in Lisbon impacted the local housing market?

The real estate boom has fueled a housing crisis by taking housing away from locals as foreign investors buy property and rent it out, leading to local discontent.

What is the impact of the Golden Visa program on property prices in Portugal?

The Golden Visa properties accounted for only 0.4% of the properties sold in Portugal, indicating that their impact on property prices was not significant.

How has the tourism boom in Portugal contributed to rising property and service prices?

The tourism sector, which generates about 25 billion in revenue per year, has contributed to rising property and service prices by attracting a large inflow of foreign residents.

What pressures have led to the potential end of the Golden Visa programs in countries like Portugal?

Pressure from the EU, concerns over money laundering and corruption, and the aftermath of the invasion of Ukraine by Russia have led to potential endings of Golden Visa programs.

How is the Portuguese government trying to align the Golden Visa program with sustainable development?

The government is changing the rules to encourage investment in strategic sectors of the economy, such as solar infrastructure, to create more wealth and align efforts with local aspirations for sustainable development.

What is the future outlook for the Golden Visa program in Portugal?

Despite the current government's favor towards the program, there is a sense of urgency and it is widely believed that the days of the Golden Visa are numbered, with the possibility of the program ending or increasing in minimum threshold in the next couple of years.

Outlines

00:00

🌍 Geopolitical Uncertainty and the Rise of Golden Visas

The script discusses the appeal of a second citizenship, particularly in the face of geopolitical instability. It highlights the concept of the Golden Visa, which allows wealthy individuals to essentially purchase a second passport by making a significant investment, often in the real estate market. The program gained popularity in Europe during the debt crisis as a means to attract investment and stimulate the economy. The United States has notably become a top applicant source for Portuguese Golden Visas, with a surge in 2024. However, new restrictions have altered the terms, potentially steering foreign investment towards less explored sectors. Despite the benefits, there is discontent among locals due to a housing crisis in Lisbon, fueled by foreign buyers who do not reside in the properties they purchase. The script also touches on the broader implications of such programs, including accusations of facilitating money laundering and corruption, and the EU's pressure on countries like Portugal to end these programs. The narrative suggests that the window for these investment schemes is closing, with a significant number of people having gained residency in Europe through Golden Visa programs, raising substantial funds for the participating countries.

05:01

🏛️ Shift in Golden Visa Policy Towards Strategic Investments

This paragraph focuses on the shift in Portugal's Golden Visa program, which is now encouraging investment in strategic sectors of the economy rather than just the real estate market. The government's new rules aim to direct funds towards the real economy and stock market to create more wealth. Julian Johnson's Tejo Ventures, a qualifying fund for the Golden Visa, exemplifies this shift by investing in solar infrastructure, which not only provides cleaner energy at a lower cost but also secures investors with collateralized energy contracts. The collaboration with Cleanwatts, a Portuguese firm, is highlighted as a model of aligning foreign investment with local sustainable development goals. The script suggests that while the Golden Visa program has been beneficial, it is facing challenges and may be phased out in the coming years. Other countries like Spain and Greece are also reconsidering their Golden Visa programs, either by ending them or raising the minimum investment thresholds. Despite the current government's support for the program, there is an urgency for potential investors to act given the impending changes.

Keywords

💡Golden Visa

The Golden Visa refers to a residency program offered by various countries, including Portugal, which allows wealthy individuals to essentially buy residency or citizenship through substantial investment, often in real estate. In the video, it is described as a highly desirable way for people from politically unstable regions to secure a second passport, thus becoming a ‘plan B’ for the rich amidst geopolitical uncertainty.

💡Second Citizenship

Second citizenship is the concept of obtaining citizenship in a country other than one's country of birth or primary residence. It is highlighted in the video as a growing trend among wealthy individuals seeking a ‘plan B’ in response to political instability. The Golden Visa is presented as a popular pathway to obtaining second citizenship, particularly in European countries like Portugal.

💡Investment

Investment, in this context, refers to the financial contributions required to qualify for the Golden Visa program, typically involving real estate or strategic sectors of the economy. The video explains that applicants need to invest at least half a million Euros in Portugal to qualify for the visa, with recent changes pushing investment into new areas like solar infrastructure and clean energy.

💡Real Estate Boom

The real estate boom refers to the rapid increase in property values in Portugal, driven partly by foreign investment through the Golden Visa program. The video notes that this boom has contributed to a housing crisis, with foreign buyers purchasing properties and leaving them vacant, thereby driving up prices and limiting availability for locals.

💡Geopolitical Uncertainty

Geopolitical uncertainty refers to the instability and unpredictability in global politics, which is motivating wealthy individuals to seek alternative citizenship options. The video emphasizes that political challenges in countries like the United States, along with broader global issues, are pushing people to consider alternative residencies through programs like the Golden Visa.

💡Housing Crisis

The housing crisis in Portugal is mentioned as a negative consequence of the Golden Visa program. Foreign investors, often not living in the properties they purchase, have exacerbated housing shortages and driven up prices in cities like Lisbon, leading to local discontent and criticism of the program.

💡Portugal

Portugal is a central focus in the video as the country with one of the most attractive Golden Visa programs in Europe. Its quality of life, favorable immigration policies, and real estate opportunities have made it a top destination for wealthy individuals seeking second citizenship, particularly Americans.

💡Solar Infrastructure

Solar infrastructure is a key example of the new sectors that are benefiting from Golden Visa investments under recent restrictions. The video highlights that funds like Tejo Ventures are directing investment into Portugal’s renewable energy sector, using Golden Visa funds to finance solar projects in industrial and public buildings, aligning with the country's sustainability goals.

💡Local Discontent

Local discontent refers to the frustration and dissatisfaction expressed by the Portuguese population toward foreign investors participating in the Golden Visa program. The video discusses how the influx of wealthy foreigners has contributed to rising property prices and a housing shortage, causing resentment among locals who are priced out of the market.

💡EU Pressure

EU pressure is the influence exerted by the European Union on member states like Portugal, Spain, and Greece to phase out or reform their Golden Visa programs. The video mentions how concerns over money laundering and corruption, particularly involving Russian applicants, led to increased scrutiny and calls for the end of such investment-based residency programs.

Highlights

Second citizenship is becoming a valuable asset amidst geopolitical uncertainty.

The Golden Visa allows wealthy individuals to essentially purchase a second passport.

The Golden Visa program gained popularity during Europe's debt crisis as a means to attract investment.

There's been a significant increase in demand for European citizenship, especially from the US, China, and Turkey.

Portugal's Golden Visa program is currently the most appealing in Europe.

In 2023, the US had the highest number of applicants for Portuguese Golden Visas.

New restrictions have altered the terms of Golden Visas, pushing investment into less traditional sectors.

Between 2011 and 2019, Golden Visa programs raised approximately 21.4 billion Euros for Europe.

Portugal's Golden Visa was designed to attract investment into the real estate market.

The Lisbon real estate boom has led to a housing crisis and local discontent with visa holders.

Critics argue that the initial wave of Golden Visas did not add value to local communities.

The EU is pressuring countries to end Golden Visa programs due to concerns over money laundering and corruption.

Portugal's socialist prime minister announced an end to the Golden Visa for real estate purchases.

The new restrictions aim to divert investment into strategic sectors of the economy.

Tejo Ventures is a fund that uses the Golden Visa to invest in Portugal's solar infrastructure.

The Golden Visa is expected to face further restrictions or end in the coming years.

Spain and Greece are also reconsidering their Golden Visa programs due to similar pressures.

Despite the benefits, there is a sense of urgency to invest in the Golden Visa program under current terms.

Transcripts

What do you get someone who has it all?

A yacht?

A private jet?

A Banksy?

In these times of geopolitical uncertainty,

a second citizenship might be the greatest get of them all.

Political instability has made people consider a plan B.

Frankly, the United States,

it's getting a little bit challenging

from a political perspective.

The Golden Visa allows those with means

to essentially buy a second passport.

And there's a reason why they call it golden.

You've gotta make a serious investment.

Half a million Euros, to be exact.

The Golden Visa program really became popular

during the debt crisis in Europe

as a way to attract investment and boost their economies.

And as uncertainty mounts around the world,

you'll see more and more demand.

We are seeing a huge increase from the likes of

China, Turkey, South Africa, Brazil, the US,

and other countries around the world

trying to gain citizenship in Europe.

One country in particular has seen

a large influx of applicants,

especially from the United States.

Portugal.

Portugal.

Portugal.

Portugal's quality of life, and this particular program,

for full EU citizenship, is frankly the most appealing

citizenship program in Europe right now.

In 2023, the United States took the top slot

for the most Portuguese Golden Visa applicants.

And while the official numbers are pending,

multiple reports indicate an even larger increase

in US applicants in 2024.

But new restrictions have dramatically changed

the price and terms of these Golden Visas,

often pushing foreign investment into uncharted sectors.

While the Golden Visa may be a luxury out of reach for most,

those who can afford it are scrambling

to obtain a Lisbon-themed escape plan

before it disappears altogether.

The window on this type of investment scheme

is definitely closing.

Between 2011 and 2019, about 132,000 people

gained residency in Europe

through some sort of Golden Visa program

and have raised about 21.4 billion Euros.

In Portugal alone raised 7 billion.

Portugal launched its Golden Visa program

to attract money into the real estate market.

It was almost too good to be true.

Buy a house, get a visa.

It was in 2020 that I decided to apply, so I did that.

I rent the apartment, and it was easy because

even you can stay just 15 days, every two years.

I speak English, I speak Spanish,

now I need to learn Portuguese.

But a real estate boom in Lisbon

has fueled a housing crisis, which in turn created

local discontent for visa holders.

With foreigners coming in,

being not quite price sensitive, buying property,

and then not living there and renting it,

that takes housing away from the locals.

So not surprisingly, the local Portuguese

began to get frustrated with these foreigners

coming and buying up housing stock.

The first wave of Golden Visas

were not adding actual value to the community.

They just want to have the European passport.

And that's, in the end of the day, it's kind of shallow.

Local populace are very often blaming

these foreign investment programs

on this inequality in cities, and it's misaligned.

The Golden Visa properties accounted for

0.4% of the properties that were sold in Portugal,

so it was not a big impact on the price.

There's a big tourism boom here in Portugal

that's contributed to rising property and service prices.

The tourism sector accounts for

about 25 billion in revenue per year,

and there's a big inflow of foreign residents

that moved to Portugal,

not necessarily with the Golden Visa boom,

but other visas, like the Non-Habitual Resident Program

or through the D7 or Nomad Visa.

Prices are increasing across the world,

and we now live in a world

where you can work remotely from anywhere.

And so Lisbon, it's one of the most popular places

for these digital nomads, and this is why you're seeing

an increase in the cost of living,

and this massive influx of people coming to the city.

But discontent for the Golden Visa

goes far beyond Lisbon.

There was also pressure from the EU

for countries like Portugal, Spain, and Greece

to end the Golden Visa programs,

because they think the program paves the way

for money laundering, corruption.

After the invasion of Ukraine by Russia,

the European Union found out that many Russians

were applying for the Golden Visa,

so they pressured countries to end this type of programs.

Last year, the socialist prime minister

announced that his government was ending

the Golden Visa for real estate purchases.

This new restriction was designed to encourage

a heretofore less favored pathway to EU citizenship

by way of investment.

What the government now is doing

by suddenly changing the rules

is trying to spill over some of this money

into strategic sectors of the economy.

The current Golden Visa program

creates more wealth to the Portuguese economy

as these funds have to invest in the real economy

or in the stock market.

Julian Johnson runs Tejo Ventures,

a Golden Visa qualifying fund

that offers investment in Portugal's solar infrastructure.

We are using the Portugal Golden Visa

almost as a Trojan horse for us to invest in climate.

So we are at a industrial fabrication site.

We installed the solar panels on their roof,

170 kilowatts of energy.

There's a massive pipeline of solar infrastructure

that we are essentially stepping in to finance,

and that includes factories, government offices,

fire stations, hospitals, warehouses, business parks.

They obviously get the benefit of cheaper, cleaner energy,

and our investors have the security

of a collateralized energy contract

for the duration of their time in the program.

To align their efforts with local aspirations

of sustainable development, Tejo has teamed up

with Portuguese firm Cleanwatts.

When we heard about Tejo,

it was like a match made in heaven.

What we are doing is we are creating power plants

distributed around the country.

For example, here in this building,

we can share this energy with the people

that live in four kilometers radius.

For us as a country, this kind of fund

bringing a lot of value.

Some of these sectors have a lot of potential

in a country that has 300 days of sun per year,

or even in farmland.

These are sectors of the economy that are booming,

and some of these investors would probably

not look at these sectors in Portugal

if the Golden Visa wasn't available.

Regardless of these positives,

it is widely believed that

the days of the Golden Visa are numbered.

It seems like the door is slowly closing

on this opportunity for the Golden Visa.

Spain has recently announced

that it's following suit with Portugal

to end their Golden Visa program

for foreign property buyers.

Then you have the case of Greece that decided to

increase the minimum threshold to get a Golden Visa

from 250,000 to 400,000, and in some cases to 800,000.

The pressure on Portugal to increase

at least the minimum threshold,

if not end these type of programs,

will happen in the next couple of years.

Right now, we have a coalition government in place

that really favors this program

because they recognize the benefits

that it brings to the country

from a tax receipts perspective,

but also from a talent perspective.

It's good for the country.

And so you should expect that the program will be around

for the next couple of years at least.

But there is a sense of urgency

in terms of investing at this price and on these terms.