António Pereira Beça, the replacement director of the Foreigners and Borders Service, quietly has had to suspend the granting of any further Golden Visas to wealthy foreigners.
Beça’s move in early July explains the sharp drop in the number of successful Golden Visas issued but only now do we know the reason.
The slow-down started when new Golden Visa regulations were hurriedly slapped in place to try and tidy up the unseemly mess that the scheme had become after a total of eleven people were arrested last November in Operation Labyrinth on charges of corruption, influence peddling, embezzlement and money laundering.
The Deputy Prime Minister Paulo Portas, whose pet project this is, pushed through new rules but it seems that they were so poorly thought out and drafted that a suspension of the entire Golden Visa process until at least September 2015 was the only sensible option by the SEF.
Among those arrested for taking personal advantage of the original leaky Golden Visa scheme were the then director of the SEF, Manuel Palos, the President of the Institute of Registries and Notaries, António Figueiredo, the general-secretary of the Ministry of Justice, Maria Antónia Anes, and the general secretary of the Environment Ministry, Albertina Gonçalves. Minister Macedo resigned.
The inept drafting of the new legislation is said to contain carriage-sized gaps concerning lengths of time entrants may live in the country, what happens to them when their visa expires and the amount of investment that they must make to qualify for a Portuguese Golden Visa in the first place.
The new laws to tidy up original scheme have served mainly to create a legal vacuum and the director of the SEF is correct in suspending the scheme while the laws are redrafted, much to the embarrassment of Paulo Portas and the civil servants paid by the public purse to ensure legislation is not so full of holes that it needs to be suspended while more amendments are drafted and approved.
The impact of the suspension on Portugal’s real estate market may not be dramatic as the scheme was barely ticking along after an initial burst in numbers as early bird Chinese, Brazilian and Russians took full advantage of unlimited Schengen area travel and the tax free treatment of their non-Portuguese earnings.
Luís Lima, the president of the Association of Professionals and Real Estate Companies of Portugal said that the suspension "is unfortunate. There are many processes halted, investments are not being made here and can be shifted to other countries where some visa programmes are even better than ours."
Lima added that "the problems should have been spotted in time and avoided," and blames the slow-down in Golden Visa authorisations to just six in May to legal problems "that should never have happened."
Lima of course is pro-Golden Visa, pointing to the 2,420 visas issued since the scheme started in 2012 and the expenditure of €1.5 billion, mostly on high end properties where his members have earned 5% +IVA.
Other are not so keen on the government policy of dishing out tax breaks to already wealthy foreigners who need not live in Portugal having qualified for a Golden Visa, but still pay zero tax on all non-Portuguese earnings.
