Portugal is using its Golden Visa scheme to encourage investors to help regenerate Lisbon.
Following the recession of 2008, much of the capital's city centre fell into disrepair as both businesses and people left the city. Developers have targeted these areas over the last few years, renovating historic properties and even entire districts, upgrading real estate to international standards, thus enticing investors.
Now, the Portuguese government has reduced the minimum required amount for those investing in real estate to apply for the residency investment scheme to just â¬350,000. This new threshold is applicable for properties located in districts designated for urban renewal and is designed to reinvigorate interest in Lisbon.
"It was already the most popular scheme of its kind in Europe, but the government wants to cast the net wider," says Nicholas Leach at Athena Advisors.
Indeed, between its launch in October 2012 and the end of June 2015 the Portuguese Golden Visa scheme attracted â¬1.47 billion of investment, of which â¬1.33 billion (90 per cent) was through the purchase of real estate.
By comparison, the Spanish equivalent of the scheme generated around â¬700 million, granting 530 foreign buyers with a visa between its launch in September 2013 and March 2015.
What is a Golden Visa? It allows nationals of countries outside the Schengen area (non-EU) to acquire a residence permit in Portugal via investments in Portuguese territory. Just like any other holder of a residence permit in Portugal, Golden Visa holders can move freely in the Schengen area and may also apply for family reunification, enabling their immediate family to also acquire a Golden Visa.
The offer was a success. According to the latest figures from the SEF (ServiÃ§o de Estrangeiros e Fronteiras, 2014 was a record year for Portugal, with 1526 successful Golden Visa applicants in total. However, this year there have been fewer, with only 398 successful applicants in the first six months.
"After the initial surge of investment into the scheme, there was bound to be a let up in demand," adds Leach. "The demand of immigration incentives peaks and troughs, and this is why the government has shaken up the terms, to try and keep the rhythm going."
Leach notes that Lisbon has been the main target of investors, due to the city's potential for capital growth. Indeed, prime properties in the city are a third of the price of London and Paris equivalents.
The news comes following a governmental hiccup at the start of July 2015 where the entire scheme was put on hold for over a week as a result of a legal void created by a piece of new legislation, which did not address certain aspects of the existing Golden Visa laws.
"The previous ways of gaining access to Portugalâs Golden Visa system are still in place, theyâve just made the scheme a lot more accessible," concludes Leach.