Investment funds can generally be divided into a number of categories depending on their asset type, investment sector, risk profile, etc.
Although there are some exceptions, most funds belong to the following categories:
- Funds that invest in real estate projects
- Private equity funds and venture capital funds
Funds That Invest in Real Estate Projects
The majority of funds eligible for a Golden Visa invest in the real estate industry. These funds invest in firms known as SPVs (special purpose vehicles), which buy and manage properties. The properties might be either residential or commercial, or frequently both.
Although the majority of funds solely invest in Portugal, they are technically permitted to make up to 40% of their investments outside.
These funds have an average duration of seven years, which is ideal for Portugal Golden Visa investors because it normally takes six years to obtain permanent residence or citizenship in Portugal. The risk profile is typically low to medium, with a stronger emphasis on capital preservation than on maximizing yield. Additionally, the majority of these funds aim to provide investors with yearly payouts that range from three to four percent.
Many investors choose the funds that invest in real estate projects as they’re simple to comprehend. The real estate investment funds attract investors who don’t want to deal with direct real estate investment and want to invest remotely.
Private Equity Funds and Venture Capital Funds
Companies that are not on the stock market are the focus of private equity funds. Companies that are not listed on the stock market are the investment area of the private equity funds. Healthcare and IT are common industries for these funds.
These funds typically have a medium to high-risk profile.
A subtype of private equity, venture capital funds focus on early-stage startups. The most common industries include those in technology, life sciences, clean energy, etc.
These funds often don’t distribute annual dividends but aim to maximize exit returns.
Choose the Right Investment Fund for Your Portugal Golden Visa Application
Before you commit yourself to a certain fund, there are certain things to consider, such as:
- The investment strategy of the fund
- Lifecycle of the fund
- The risk and return profile
- The exit strategy
If you’re not familiar with fund investments, we recommend that you get professional help. Feel free to contact us to be introduced to independent advisors who can guide you on your Portugal Golden Visa journey.
