A residence permit in Portugal with savings of 20% for the purchase of commercial real estate

I want to show my children the world and I want them to get a European education. Earlier it seemed to me that these are unattainable dreams. But my business taught me not to give up but look for opportunities.

Anton, 38 years old
businessman from Kazan
Client's name and photo have been changed
Residence permit in Portugal for the purchase of commercial real estate: the story of Anton from Kazan
 
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Anton received a residence permit in Portugal by investment for the whole family including his daughter, who was born after the investor's application was approved. 

We will tell you how the investor saved €70,000 and why he bought a share in the hotel, and not the whole property.

Why did the investor choose a residence permit in Portugal?

Anton decided to obtain a residence permit in an EU country in order to travel freely around the region, without visas and restrictions due to the pandemic. He also hoped that the children would receive a European education and, if they wanted, would stay in Europe.

On February 12th, 2021, Anton turned to Immigrant Invest for advice. The choice of the investment program depended on three criteria:

  1. The residence permit will give the right to visa-free travel to the EU countries and the Schengen area.
  2. In the future, the family will receive citizenship without moving to another country.
  3. Expenses for obtaining a residence permit for the whole family must count up to €350,000.

Visa-free entry to the European Union and Schengen. A residence permit card or permanent residence card of an EU state replaces a Schengen visa. The cardholder has the right to come to the country of residence at any time, even if its borders are closed to tourists. In other states of the European Union and Schengen, on a residence permit or permanent residence card, it is allowed to stay for up to 90 days in half a year.

90 days in half a year
EU residents spend in any country of the region without a visa

It is possible to obtain a residence permit in the European Union by investments under the program of Portugal, Greece, Malta and Spain. Malta also issues permanent residence for contributions to the country's economy.

Citizenship after a residence permit by investment is obtained by naturalization. In Greece, Spain and Malta, an investor can apply for citizenship only if he has lived in the country for several years. At the same time, it is allowed to spend no more than 10 months outside the country five years before applying for citizenship.

Portugal does not require the investor to move and reside permanently. It is enough to spend seven days a year in the country. All relatives of the investor who participated with him in the residence permit program will also be able to obtain citizenship.

7 days a year
investors spend in Portugal to maintain a residence permit and apply for citizenship

The minimum investment amount under the residence permit program in Portugal is €250,000. The investor also pays fees for filing and issuing residence permit cards, health insurance and taxes when buying real estate. Additional expenses for a family of four are about €25,000.

€250,000
minimum investment amount under the Portugal residence permit program

The Portuguese residence permit program is the only one that solved the investor's tasks. Anton also liked the country itself. He vacationed with his family in Portugal several times and praised the climate, infrastructure and friendliness of the locals. It only remained to choose an investment object that fit the terms of the program.

How to choose an investment option and save €70,000 on buying real estate

Portugal offers investors eight investment options: from buying real estate to funding scientific research. In some cases, the investor can return the money invested in five years, for example, if he closes a bank deposit or sells the property.

89% of investors chose to buy real estate in 2020. It is allowed to purchase commercial and residential properties in whole or shares in projects.

89% of investors
choose to buy real estate

An investor can invest 20% less if he buys a property in a region with a low population density which is less than 100 people per square kilometer. The right to a reduced investment amount is secured by the Regulatory Decree of 11.09.2018 No. 9/2018.

The minimum cost of real estate under the residence permit program in Portugal

Object typeIn regions with low population density In other regions
Real estate over 30 years old for restoration€280,000 €400,000 
New or secondary property under 30 years€350,000 €500,000 

Anton decided to buy a share in the real estate project. This option is tantamount to buying a physical object. When choosing a project for restoration in a region with a low population density, he will invest 20% less and save €70,000  on participation in the program. In five years, he will be able to sell the stake and return the money invested.

€70,000
investor’s savings when buying historical real estate in regions with a low population density

Why Anton chose to buy a share in a commercial real estate project, not a physical object

You do not need to travel to Portugal to select an object. Anton preferred to personally examine real estate options before buying, and for this he needed to go to Portugal. At the time of contacting Immigrant Invest, Anton’s wife was pregnant, and the investor did not want to leave her at home alone.

No expenses for property maintenance. Property owners pay utility bills and an annual municipal tax at a rate of up to 0.8% of the value of the property. If you rent out real estate, then there is no guarantee that the income will cover the maintenance costs. In this case, you will have to pay tax on rental income on a progressive scale of 14.5%.

You do not need to renovate the object yourself. If an investor buys a property for restoration, he undertakes to restore the object on his own. Repair costs may exceed the investment cost of the program. When buying a share in a project, the repair costs are included in the transaction amount. The management company is engaged in the repair itself.

Most often, investors buy shares in hotel complexes in Portugal. In this case, the management company is engaged in the maintenance and repair of real estate, and the investor receives income from the lease of the object.

Natalia Oganesyan
Real Estate Chief Operations Officer in Immigrant Invest

Immigrant Invest real estate experts offered Anton to acquire a share in a hotel reconstruction project in the south of Portugal, in a region with a low population density.

An example of commercial real estate suitable for purchase under the residence permit program in Portugal

The project involves the reconstruction of a monastery of the beginning of the 17th century. As a result, a four-star hotel with a restaurant, bar, spa, outdoor pool and vineyards will open on site.

€280,000
cost of the share
4% per annum
guaranteed profitability
7 days a year the
free holidays for shareholders

How to obtain a residence permit in Portugal: a step-by-step procedure

1
Registration of a taxpayer number in Portugal
2
Opening an account in a Portuguese bank
3
Purchase of a share in a real estate project
4
Submitting an application for a residence permit by investment
5
Submitting biometrics in Portugal
6
Obtaining residence permit cards

1. Registration of a taxpayer number. The Portuguese analogue of the TIN is mandatory for investors. Without a tax number in Portugal, you can not make major transactions such as investing and buying real estate.

You can get a taxpayer number remotely. For this, the lawyers of Immigrant Invest selected a tax representative in Portugal, who acted on behalf of the investor by power of attorney.

To register as a Portuguese taxpayer, Anton submitted to the tax representative: 

  • An application for registration as a taxpayer;
  • a copy of the Russian and foreign passport;
  • a copy of the TIN registration certificate in Russia;
  • confirmation of the investor's income.

The Portuguese tax service entered Anton into the register of taxpayers two weeks after the appeal.

2. A Portuguese bank account is needed to buy real estate and make payments under the program. On the recommendation of lawyers from Immigrant Invest, Anton remotely opened an account with Novo Banco and transferred €350,000 to it.

3. The purchase of a share in the real estate project was accompanied by the lawyers of Immigrant Invest: they contacted the developer, checked the sale and purchase agreement and received an ownership certificate of transfer.

Anton also paid taxes: 6.5% of the value of the share for the transfer of ownership and 0.8% - stamp duty.

€300,440 — the investor's expenses for the purchase of commercial real estate in Portugal

€280,000
share in the restoration project
€18,200
tax on the transfer of ownership
€2,240
stamp duty

4. To apply for a residence permit by investment, lawyers prepared a package of documents. It included:

  • copies of the applicants' passports;
  • police clearance certificates for Anton and his wife;
  • the history of the investor's welfare with confirmation of the legality of the sources of income;
  • marriage certificate;
  • birth certificates of children;
  • medical insurance;
  • sale and purchase agreement for a share in a real estate project;
  • transfer certificate of ownership of the share;
  • government questionnaires and forms.

Applicants also provide the address of registration in Portugal, which is entered on the residence permit card. Anton did not plan to buy housing in the country, so the lawyers indicated the address of the tax representative in his application.

For filing an application, the investor paid a fee of €882 for a family of four: €533 for the main applicant, €83 for a spouse and €133 for each of two children.

€882
fee for applying for a family

On April 22nd, 2021, lawyers submitted Anton’s application to the Portuguese Migration Service. Four and a half months later, the answer came back: the investor’s candidacy was approved for obtaining a residence permit.

For 4.5 months
the Portuguese migration service considered the investor's application

How to get a residence permit for a newborn

On June 7th, 2021, the Portuguese migration service approved Anton's application, and on September 9th, his third child Irina was born. According to the rules of the program, Anton could add a minor child to his application at any time, even after the approval of the application. 

In order for Anton’s newborn daughter to also receive a residence permit in Portugal, the lawyers submitted another application to the migration service. The child’s birth certificate was attached to it. The application fee for joining was €533.

€533
fee for joining a newborn after the investor's application was approved

The answer came a week later: the Portuguese migration service allowed the child to join the program and issue the girl with a residence permit card. 

How to submit biometrics in Portugal during a pandemic

When an investor receives approval from the immigration office, he can sign up for submission of biometrics. The procedure is obligatory: fingerprints are entered into the biometric card of the residence permit.

It is possible to submit fingerprints for residence permit cards only in Portugal with a personal visit to the migration service office. All applicants, including newborn children, must attend.

In the offices of the migration service in Lisbon and Porto, there were no free windows for submitting biometrics for the next month. Lawyers signed up Anton and his family to take biometrics at the regional office in Evora.

The family had valid Schengen visas, but they needed a good reason to travel to Portugal. Visiting the migration service is considered a good enough reason to visit the country. 

Anton and his wife have been vaccinated against the coronavirus with Sputnik V. But Portugal does not recognize the Russian vaccine. Therefore, the whole family did PCR tests 72 hours before departure to Portugal.

Before flying to Portugal, the airline sent Anton a list of required documents. When registering for the flight and passing the Portuguese border, Anton presented:

  • checking confirmation of the appointment for the collection of fingerprints;
  • approval of the migration service for obtaining a residence permit;
  • negative results of PCR tests for coronavirus;
  • Schengen visas.

On September 15th, 2021, the family flew to Portugal. An attorney of the Immigrant Invest Portuguese office escorted them to the migration office in Evora. At the appointed time, the family submitted their fingerprints and on the same day flew home to Kazan.

The result of cooperation 

On October 1st, 2021, Anton received residence permit cards by mail: they were sent from Portugal by a tax representative. Participation in the residence permit by investment program took eight months from the date of contacting Immigrant Invest.

8 months
took part in the residence permit program in Portugal
1
February 12th, 2021
Anton applied to Immigrant Invest
2
+ 2.5 months
Lawyers submitted Anton's application to the Portuguese migration service
3
+ 4.5 months
Anton received approval from the Portuguese migration service
4
+ 1.5 weeks
Family submitted biometrics in Portugal
5
October 1st, 2021
Anton received residence permit cards

Anton spent €330,555 to participate in the program, including taxes and fees. He did not go beyond the allocated budget of €350,000 and received residence permit cards for the whole family of five.

€330,555
the family spent on obtaining a residence permit in Portugal
€280 000
purchase of a share in a real estate project
€18,200
tax on transfer of ownership
€2,240
stamp duty on the purchase of real estate
€882
fee for applying for a residence permit
€533
fee for adding a newborn
€26,700
fee for residence permit cards issuance
€2,000
medical insurance

European future of the family with Portuguese residence permit cards 

The family will go on their first trip with Portuguese residence permit cards in winter, when the children start school holidays. Together they will spend a week in Budapest.

In the spring of 2022, the couple will travel to Germany to choose a school for their sons. Anton wants to visit several educational institutions to compare the conditions of study and living.

The family plans to spend the summer in Portugal, on the Atlantic coast. And in five years, Anton expects to sell investment property and buy a small house for his family in the south of the country.

Residence permit in Portugal for investment of visa-free travel to the EU: Budapest, Hungary

Anton’s family will visit Budapest in January 2022. To travel, they do not need a Schengen visa: it will be replaced by a residence permit card in Portugal

Residence permit in Portugal for studying in Germany

Landheim Schondorf boarding school is one of the options that the couple will consider for their sons. The cost is €36,660 per year

Residence permit in Portugal for citizenship and moving to the European Union

In five years, Anton plans to buy a house in Cascais, a coastal resort town half an hour away from Lisbon

About all the opportunities that opened up for the investor's family, we talked in the article “What a residence permit in Portugal gives to a cosmopolitan”.

Immigrant Invest is a licensed agent for government programs in the European Union and the Caribbean.

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