Portugal Golden Visa Investment Fund: The Ultimate Guide

Portugal offers spellbinding experiences for avid travelers, foreign investors, and international families alike. Thanks to its golden visa program, it’s possible for expats to acquire residency by investment and even Portuguese citizenship in this charming nation. One of the best ways to get a Portugal Golden Visa is via the Portugal golden visa investment fund option.

In this guide to Portugal’s investment funds for the golden visa, we cover the following:

Portugal golden visa investment fund changes 2022

From 1 January 2022, the Portugal Golden Visa will undergo an extensive makeover. Investment options will significantly change, including the investment amount needed for the Portugal investment fund Golden Visa. Specifically, a capital transfer in investment funds or venture capital funds to the amount of or greater than €500,000 will be needed to procure legal residency in Portugal.

The funds themselves must be focused on the capitalization of companies registered under Portuguese law, with a minimum maturity of five years at the time of the investment and at least 60% of the value of the investments made in commercial companies on national territory.

Interestingly, Portugal Golden Visa Statistics already point to an influx of investors rushing to invest in the Golden Visa this year before the changes kick in 2022, with enhanced interest in the funds investment golden visa option.

You still have this year to enjoy the current investment conditions. For more information, check out our Portugal Golden Visa changes article.

The rising popularity of the investment fund option for the Golden Visa

Property is usually the preferred route for investment in Portugal when it comes to applying for the Golden Visa. However, more and more investors are turning to the investment fund option, seeing it as a new way to acquire legal residency.

Having ownership of a property can be attractive to some, especially when it can result in rental income or even a holiday home. In practice, this method may not suit everyone, as finding and purchasing the right property can be difficult and time-consuming.

Since November 2018, the Portuguese Parliament passed a new law making venture capital funds (or FCR – Fundo de Capital de Risco) a qualifying investment for those wishing to apply to Portugal’s Golden Visa. With a minimum investment of €350,000 in an FCR fund that qualifies for Golden Visa, investors can now successfully apply for the Portugal citizenship by investment program and have immediate access to the program’s benefits.

The name Venture Capital may sound daunting and complicated but it is simply a designation of investment funds that are managed by corporate experts in the field who seek to invest in start-ups or medium-sized projects with strong growth potential. Each fund has a specific well-defined investment mandate and may focus on sectors such as energy, industry, technology, or real estate. Funds are regulated by Portugal’s regulator, the CMVM.

Benefits of Portugal investment fund golden visa

There are a number of benefits for picking the investment fund option for the golden visa.

  • The investment fund golden visa is professionally managed by experts in each specific sector
  • You can obtain Portuguese residency from a €350,000 investment
  • Venture capital funds are a tax-efficient vehicle — dividends and capital gains returned to investors may be tax-exempt
  • Some funds offer a minimum return hurdle rate (usually of 5%) which means managers will only be compensated if the fund performance is above a certain percentage
  • Some funds have the support of the Portuguese Government through subsidies or financed by the IFD (Instituição Financeira de Desenvolvimento)
  • The funds are regulated and must comply with the rules stipulated by the Portuguese Securities Market Commission (CMVM), which means that fund managers are regularly audited by third parties


Take a look at our Portugal Golden Visa Ultimate Guide by local experts

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Golden Visa Portugal investment fund profile and diversification

The overall level of security of risk of a Portuguese venture capital fund or ‘Golden Visa Portugal investment fund’ will depend on many factors including investment mandate, managers’ credentials, leverage and liquidity, and legal documents.

Some funds may offer limited potential for capital appreciation with a safer investment profile while others may have a more leveraged approach with an aim to provide investors multiples of the capital invested. For example, high-growth companies focused on technology have a different profile to property development projects that tend to have a more predictable cash-flow curve.

Funds may offer the opportunity of an early exit but as a rule of thumb, usually, the investor should expect to realize all gains after five to ten years.

The risk-return profile of these funds will vary according to the sector exposure and portfolio diversification (i.e. how many companies comprise the fund’s portfolio).

Examples of risk-return levels based on sector exposure and portfolio diversification

What should a Golden Visa applicant consider when investing in a Golden Visa Portugal Investment Fund?

If you are interested in applying for the Portugal Golden Visa through a Venture Capital Fund (FCR), you must carefully make your decision based on two important criteria:

  • Fund eligibility for the Portuguese Golden Visa
  • Fund credentials including fund strategy, management pedigree, and legal obligations

Portugal Golden Visa Investment Fund Types To Know About

Currently, there are three types of investment funds eligible for the Portugal Golden Visa.

Capital growth – Renovation
Pay dividends – Commercial type
Finance – RE Developments

Portugal investment fund golden visa: fund eligibility requirements

Not every private equity fund in Portugal qualifies for the Golden Visa program. You need to make sure the chosen fund fulfills all the necessary technical requirements as listed by the Portuguese border service “Serviço de Estrangeiros e Fronteiras” (SEF) and that the investment fund is regulated by the Portuguese CMVM.

A few questions the investor should consider before investing in Golden Visa funds:

  • Is the fund regulated by the Portuguese authorities?
  • Is the fund fully eligible for the Portuguese Golden Visa according to SEF?
  • Does the fund have the right attributes to safeguard the investor’s Golden Visa status? As a Golden Visa investor, you will need to maintain your investment in the Golden Visa fund for a minimum of five years when you are able to apply for permanent residency and citizenship in Portugal.

How are the Portugal Golden Visa Investment Funds regulated?

The funds are regulated by CMVM (The Portuguese Securities Market Commission) who require funds to comply with the following requirements including but not limited to:

1. Report the valuation of their net assets on a semi-annual basis. That means investors may have their share price revised every six months
2. Employ independent accredited accounting firms such as PwC, KPMG or EY for annual audits.
3. Disclose their fees in the ppm/management regulation document. That means investors should have clarity on the management entities’ fees and custodian bank charges.

Portugal golden visa investment fund credentials

Once we’ve established that the fund is appropriately regulated and is an eligible Golden Visa instrument, the second phase of due diligence is required on the fund credentials.

The three main aspects of analyzing a Portugal golden visa qualified investment fund include:

Fund investment strategy: Does the fund investment strategy make sense? What is the term of the fund? How does the fund plan on paying back investors?

Fund manager credentials: Do the managers have the right experience and credentials?

Fund legal: Are the legal documents appropriately drafted to safeguard the investor’s investment?

Performance fees for the investment fund – Golden Visa

Performance fees are charged on profits delivered by the management team of the investment fund selected for the Golden Visa. It usually is calculated as a percentage over the fund’s profits and its absolute value can only be determined at the end of the fund’s term, once all profits and fixed fees have been computed. If the overall result is negative, there are no performance fees to be charged.

There are usually three types of performance fees adopted by private equity and venture capital funds:

  • % on the upside sharing
  • % on returns over hurdle rate (or preferred dividend rate)
  • % on returns over hurdle with a catch-up mechanism

Percentage on the upside sharing

Once your capital is fully recouped, any profits, dividends, or capital gains accumulated over the term of the fund will be shared between the investor and fund management team according to the % stated in the management regulation.

Percentage over hurdle rate

The hurdle is a predetermined rate of return the fund management team must meet in order to access a performance-based compensation. The hurdle rate is usually referred to as the Minimum Accepted Rate of Return (MARR) or Preferred Dividend Rate.

Percentage over hurdle rate with a catch-up mechanism

Some funds state in their management regulation that fund managers will catch up with say 80% investor / 20% performance fee once preferred dividends have been paid. That is different from the distribution method above because the remaining balance after preferred dividends (point 3) will be distributed to the fund managers first until the profits have been paid 80% investor/20% managers. That means the GP will catch up with investors in the priority order of distribution.

Furthermore, some funds have the management team or general partners (GP) co-investment in the fund.

Disclaimer related to performance fees

It is important to notice that performance fees are part of the overall fees of a fund. When assessing the level of fees a fund charges the investor, it is important to consider management fees as well.

Some funds have low management fees but charge higher performance fees, meanwhile some funds have high management fees but offer higher preferred dividend rates to the investor.

While we have worked to gather information accurately, some details may change over time. We aim to update this section periodically with newly available information. Global Citizen Solutions cannot advise on which are the best funds for our clients as we only provide guidance and facilitation on the understanding of the funds’ fees and regulations in place.

Document Requirements for the Portugal Golden Visa Investment Funds

When applying for the Portugal Golden Visa, there are numerous documents you must submit to the Portuguese authorities. Note that if any document is missing or incomplete, your application for the Portugal Golden Visa can be significantly delayed. That’s why it’s important to stay informed about all the necessary paperwork you must prepare beforehand.

Not that the documents listed below are not exhaustive and additional documentation requirements may be requested by the authorities.

General document requirements for the Portugal Golden Visa

  • Passport or another valid travel document
  • Proof of entry and legal stay in the National Territory
  • Proof that you are covered by health protection, namely:
    • Document certifying that you are covered by the National Health Service, or;
    • Document showing that you are an internationally recognized health insurance holder for the period of legal residence requested
  • Criminal record certificate from the country of origin, or the country (or countries) where you have resided for more than one year (certified by diplomatic representation or Portuguese consular office). The certificate cannot be older than three months and must be translated into Portuguese;
  • Proof of your tax identification number, or equivalent, of the country of origin, of
    residence or fiscal residence;
  • Completion of Application (using the approved model) containing the authorization
    for consultation of the Portuguese Criminal Registry;
  • Declaration on Commitment to Honor, by which the applicant declares that he will fulfill the minimum quantitative and time requirements (five years) for the investment activity in the National territory;
  • Present a negative statement debt issued, with a maximum advance of 45 days, by the Tax Authority and Customs and Social Security or, if not possible, declaration of the non-existence of registration with these entities;
  • Receipt of payment of the ARI application analysis fee.

Golden Visa Portugal investment fund- documents required

You must demonstrate that you’ve made the investment with the minimum required amount and must respectively submit the following documents:

  • Declaration by the credit institution authorized or registered in the national territory with the
    Banco de Portugal, attesting to the effective transfer of an amount equal to or greater
    than what is required;
  • Certificate proving ownership of the participation units, free of charge and charges (issued by the entity responsible for maintaining a register updated version of the holders of participation units, under the terms of the Law, of the respective management regulation or contractual instrument);
  • Declaration issued by the management company of the respective investment fund, attesting
    the viability of the capitalization plan, the maturity of at least five years, and application of
    at least 60% of the investment in commercial companies based in the territory
  • Certificate of commercial registration, if the investment is made through a company
    single shareholder, demonstrating that the applicant is the partner, cf. Article 65a (13)
    of Regulatory Dec. 84/07, of 11/05, in its current wording.

Useful Industry Acronyms For The Portugal Golden Visa Investment Fund

Regarding the terms, it would be useful to understand some Portuguese specific acronyms used in this industry, such as:

UP (Unidade de Participação)

PU (Participation Unit) in English, is the equivalent of stocks or shares.

FCR (“Fundo de Capital de Risco”) – Private Equity Fund or Venture Capital Fund

SCR (“Sociedade de Capital de Risco”) – Venture Capital Fund

RG (“Regulamento de Gestão”) – Management Regulation a.k.a PPM (Private Placement Memorandum)
Also, an important entity to have in mind is CMVM, Portuguese Securities Market Commissions. It is the Portuguese equivalent to SEC (Securities and Exchange Commission).

CMVM is a legal entity governed by public law and is part of the European System of Financial Supervisors  (ESFS) and the National Council of Financial Supervisors. (Chapter 1, articles 1 – 3).

The importance of an informed decision

It is important that investors exercise careful consideration when selecting the correct fund investment. Legal documents, as well as the caliber of the managers, must be thoroughly scrutinized. Check out additional information on investing in Portugal for citizenship.

At Global Citizen Solutions, we’ve mapped out all the funds that qualify for the Portugal Golden Visa and developed a data-based system with strict criteria to help you decide which fund is for you.

If you are interested in applying for the Golden Visa in Portugal, be it through buying a property or investing in a fund, we can help.

Get in touch today and schedule a free initial consultation.

Frequently asked questions about the Portugal investment fund for the golden visa

Can I get residency in Portugal through investment funds?

Yes, it is possible to get a residency permit in Portugal through investment funds. You must make a minimum investment of €350,000 and ensure the investment fund is accepted for the Portugal Golden Visa.

How will Portugal Golden Visa changes in 2022 affect the investment fund option?

From 1 January 2022, the Portugal Golden Visa will undergo an extensive makeover. Investment options will significantly change, including the investment amount needed for the investment fund option. Specifically, a capital transfer in investment funds to the amount of or greater than €500,000 will be needed to apply for legal residency in Portugal. The funds themselves must invest at least 60% of their capital on companies registered under Portuguese law. The funds should be over a five years term in order to accommodate the requirements of the Golden Visa program.

What are the benefits of the Portugal investment fund golden visa?

Funds are specifically managed by experts in each sector, you can obtain residency with a Portuguese fund investment, and many investors are exempt from paying tax in Portugal. Funds are also regulated by the Portuguese Securities Market Commission.

Are all Portuguese investment funds eligible for the Portuguese Golden Visa?

Not all golden visa portugal investment are eligible for the Golden Visa, which is why it is important to consult an expert before investing in one.

Can I invest in more than one fund for the Golden Visa application?

Yes, you may invest in more than one fund if the sum of your investment is €350,000 or more. For example, you can invest €200K in fund X and €150K in fund Y, since the total sum is €350K you will be able to apply for the Golden Visa.

Theoretically you could invest in three or more funds (subject to their minimum ticket).

Would I lose my GV if my participation units total value depreciates?

No, if you invested the minimum required (€350 000), you should not lose your Golden Visa, regardless of the price fluctuations on shares during and at the end of the term of the fund. What matters is how much you invested initially.

Can I exit my investment prematurely for the Portugal Golden Visa?

It may be possible to exit however investors should consider the following:

  1.   You would not be able to renew your Golden Visa application or acquire permanent residency if you exit before the five-year minimum term required for the Golden Visa.
  2. Traditionally, venture capital funds are not liquid investments, and one should expect to sell their shares either back to the fund or to another investor at a discount.