Investor interest in Portugal’s golden visa, Europe’s hottest residency-by-investment program, is cooling after the government doubled the time that foreigners must wait to qualify for Portuguese citizenship.
Pedro Lino, chief executive of Optimize Investment Partners, which manages one of Portugal’s leading golden visa funds, said about 40 investors, mostly from the U.S. and Asia, had withdrawn their money since the start of the year due to the changes. That adds up to about €20 million, and lawyers say thousands more investors are preparing legal action against the state.
New investment also declined in the run-up to the new rule, according to Lino, which was implemented in May. His fund only generated about €50 million in new investment in the first five months of this year, compared to €80 million over the same period a year earlier.
“It’s a significant change that caused investor interest to cool off and triggered some redemptions,” Lino said in an interview with Bloomberg News after returning to Lisbon from a visit to the U.S., where he was promoting the program. “It’s a blow to Portugal’s reputation.”
“We continue to attract investment, but it’s less than last year and a few investors have decided to exit the program.”
The changes to the so-called nationality law mean that most golden visa investors now have to wait ten years to qualify for citizenship instead of five. The tighter rules aim to contain the inflow of immigrants. Portugal now has a record 1.5 million foreign-born residents, or about 15% of the total population. That’s nearly three times as many as in 2019, according to the country’s Agency for Integration, Migration and Asylum.
Since it was created during the 2012 financial crisis, Portugal’s golden visa has raised more than €7 billion, making it one of Europe’s most popular programs. Under current rules, foreigners are able to qualify for citizenship by investing a minimum of €500,000 in an investment fund or by making a donation of at least €200,000 to a cultural nonprofit. Unlike similar programs in Europe, applicants are only required to spend an average of seven days per year in the country, and up until May, they could qualify for citizenship in just five years.
Benjamin Trotter, a US golden visa investor who enrolled in the program in 2021, was just four months away from securing Portuguese citizenship when the changes came into force. He decided to pull out of the program instead of waiting another ten years to get his Portuguese passport.
“I turned my life upside down to apply for Portuguese citizenship through the golden visa and now they change the rules of the game,” Trotter, a 47-year-old tech entrepreneur from Austin, Texas, said in a telephone interview. “I’m just fed up and not playing this game anymore. It’s insane.”
Also read: Portugal’s Golden Visas Boost Classic Cars, Almonds and Equities
U.S. nationals made up the largest share of golden visa investors in 2024, followed by Chinese and Russian nationals, according to the latest report by immigration agency AIMA. Lino, the fund manager at Optimize Investment Partners, said that although there has been an uptick in interest in Portugal in recent weeks, investors are also considering similar programs in countries such as Italy and Greece.
“Golden visa investors can no longer tolerate any further legislative changes,” said Madalena Monteiro, a Portuguese immigration lawyer at Liberty Legal who represents some of the investors planning to sue the Portuguese state over the changes. “Portugal must understand that if it does nothing to reverse this situation, it will struggle to attract foreign investors whenever it needs them.”
The fallout could potentially extend beyond investment funds. Museums and other cultural institutions that received donations through the program have already seen a sharp decline in new gifts, said Sara Rebolo, founder of Prime Legal, a firm that supports golden visa investors.
Still, despite the change, some golden visa applicants plan to stick with the program. Jim Davis, a geologist in the oil and gas business in Texas who applied via a donation, is among those who has not been deterred.
“I knew things wouldn’t go smoothly, but I still think it’s a good investment and a good plan B for my life,” Davis said by phone. “Portugal is such a great country to live in, you just have to wait longer to become a citizen.”