Portugal’s controversial 'Golden Visa’ scheme has seen numbers decline further in November as just 72 permits were issued, representing an investment of €45.4 million, according to the Foreigners and Borders Service whose staff still face a huge backlog of forms to process.
All but six of the successful November permits were issued due to the purchase by the applicant of a property in Portugal for €500,000 or more.
Since the beginning of 2015, 671 Golden Visas have been issued compared to 1,526 in 2014 and 494 in 2013. The scheme certainly has helped estate agents dealing in top range properties, but the question of how much of a boost these purchases have given to the economy remains to be answered with any objectivity.
The scheme started in October 2012, since which 2,693 Golden Visas have been handed out to non-European foreigners who have grabbed the chance of paying zero income tax on their worldwide earnings, plus unrestricted travel within Europe's Schengen area of 26 countries.
The majority of successful applicants are Chinese, along with some Russians, Brazilians and South Africans. The Chinese lead the field with 2,141 visas with the Brazilians a distant second with 100.
The last government liked to talk of ‘investment’ in Portugal but in reality much of the money released to vendors will have gone out of the country rather than being reinvested locally.
The government has earned some tax revenue from the actual property transactions but with many Chinese at the same time buying property in more desirable countries and choosing to live in Paris, Rome or Frankfurt, many Golden Visa properties in Portugal have been left vacant or have been rented out.
The Golden Visa headline figures hide the real total of immigrants as since 2013, some 4,117 family members have been granted residence permits to Golden Visa holders - some of them will have remained in Portugal.
After the administrative scandal which led to 11 arrests and charges of fraud and corruption in Operation Labyrinth in February 2015, the then deputy prime minister Paulo Portas presented some tweaks to the scheme which failed to attract interest, such as foreign investment in urban rehabilitation or science, among others.
The SEF suspended the Golden Visa process on July 1st due to poor legislation failing to marry the old and new laws. This ban was ended in September but the figures have not bounced back mainly due to the backlog which may number as many as 3,000 applications waiting to be processed, or being processed.
Detractors argue that the bribing of foreign high net worth individuals by offering tax free status in Portugal, while its own taxpayers are groaning under the weight of austerity driven tax rises, deprives governments in the countries of origin of their fair tax take.
Others, like Paulo Portas, says that many other countries have such Golden Visa schemes, such as Spain, so Portugal does not want to miss out.
The Socialist government has made no noises that it wants to cancel the scheme but the treatment of foreign millionaires by offering enormous tax breaks does not accord with any known principles of equality.
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