Portugal Golden Visa is one of the most popular residency by investment schemes in the world. The program was introduced in 2012 and has provided more than 10,000 applicants with Portugal residence permits since then.
One of the ways to apply for the Golden Visa program in Portugal is by investing in a fund. Now, as you can understand from the previous sentence, there are other ways available as well. But then, what makes investment funds more popular than other options, such as real estate or capital transfer…Well, investment funds for Golden Visa come with the following advantages.
Benefits of Portugal Golden Visa Funds
1. Lower Investment Amount
When you compare funds with other ways to invest for Portuguese Golden Visa, like the capital transfer of €1.5 million, you would notice that the fund needs a lower investment of €500,000. Also, note that managing real estate costs a lot more than a fund investment as you most probably will need to work with a property management company. Fund investment frees you from those sorts of worries.
2. Lower Taxes and Fees
Fund investments do not translate into heavy taxes and fees like acquiring real estate does. Getting a property in the country means that you will have to pay a yearly municipal tax (0.3 to 0.5 percent yearly), stamp duty (0.8 percent), and IMI transfer tax (avg six percent). But investing in funds means not having to pay any of these taxes.
3. Secure Investments
All registered funds in Portugal are regulated by:
- The Portuguese Securities Market Commission (CMVM)
- The Bank of Portugal
- The external fund management company
In addition to these three entities, the fund is also audited by the tax authorities in Portugal. Such extensive regulation levels make sure that the fund goes with the tax laws, legislation, and the suggested investment plans forwarded by the investor fund in the country.
4. Better Tax Benefits
Based on the tax structure of the investor and the fund, investing in a fund can bring major tax efficiencies. There are a couple of cases that make way for the complete exemption of withholding taxes on the income that the fund generates. This especially happens in cases where the investors aren’t tax residents of the country. On the other hand, every real estate rental income has to go through a fixed tax of 28 percent in Portugal.
5. Level of Diversification
The Portuguese laws that govern the investment funds offer a certain degree of diversification. So, there are separate sections as to the percentage a specific investment in that fund or asset might constitute in the total portfolio of the fund. It ensures investment diversification within the fund, which also translates to risk alleviation for the investors participating.
6. Higher Annual Yields
Based on the fund’s profile and investment strategy, a fund’s yield and the possible capital appreciation tend to be comparatively higher than the other kinds of investments used for Golden Visa Portugal.
7. Delegation of Responsibility
Investing in a fund is a lot different than owning real estate. A participation unit in any investment fund tends to be hassle-free because the management of the fund is handled by the fund managers. This is a huge benefit for investors who don’t have enough time and effort to manage an investment.
Key Takeaways
- Fund subscription in Portugal costs less than other investment routes
- Portugal Golden Visa investment funds come with a lot of tax benefits
- When you subscribe to a fund, you can rely on fund professionals’ expertise
- Depending on your risk appetite, you can opt to invest in separate funds
- Portugal Golden Visa investment funds are regulated by the relevant authorities in Portugal
The Final Word
Whether or not you choose investment funds over other options is completely your call. It depends on your financial situation, risk appetite, and your needs. But the advantages of the fund are enough reasons to consider it.
If you need further guidance and information about funds for Portugal Golden Visa, feel free to contact us for a personalized online call.
