When investing in Portugal Golden Visa funds, it’s also important to consider the exit. Here are some points that are worth delving into when investing in funds.
Minimal Lock-Up Time
The majority of investment funds that qualify for a Golden Visa will have a minimum six-year duration guaranteed by contract. By doing this, you are essentially guaranteed that your investment will remain valid for the length of time required to submit an application for Portuguese citizenship.
A collaborative strategy like this one should be present in the investment fund for the Golden Visa route. If you’re not familiar with investment funds, getting help from an independent advisor will be useful.
Transfer or Reselling Participation Units
The majority of Portuguese investment funds permit the sale or transfer of participation units between investors. To identify demand for a participation unit in a fund that is specifically timed for Golden Visa timeframes, however, is often challenging unless it occurs at the time the fund is formed.
Due to this, these investments in the fund are somewhat illiquid up until the fund manager dissolves the fund. By offering a buy-back of their participation units at a specific discount, some funds are able to get around this problem.
Periods of Extension
Funds frequently have a specific exit target with regard to timing. It is fixed at six years by the majority of Portugal Golden Visa investment funds.
However, most of the funds offer optional extension periods that might start at the six-year point. The fund management, not the investors, makes this decision though. This implies that you can be locked in a fund for a period of time longer than you need to apply for Portuguese citizenship. Before committing to a fund, inquire about the periods of extension.
Exit Market
Most Portuguese Golden Visa funds aim to eventually exit the portfolio by selling it for a profit. With a performance fee based on a proportion of the value increase, the majority of fund managers are highly motivated to perform well. This is advantageous since it shows that their motivations are in line with those of the investors.
But note that they are splitting your profit, not your possible loss. Therefore, you alone are responsible for any potential negative outcomes.
When determining whether the fund option is best for you, there are numerous things to consider. We strongly advise working with an independent advisor who will act as your representative in the process because all the funds will be motivated to promote their own products.
