Navigating Golden Visa Investments: Selecting the Ideal Fund for Residency in Portugal

The program has undergone a redesign, maintaining its offer of a five-year residency opportunity for non-EU nationals through investment in Portugal. However, the revised program no longer permits investment in real estate but instead focuses on the following:

• Investment in Funds (that do not involve real estate development) – the most interesting and famous option currently; 
• Invest in Research activities in private or public; 
• Donations to cultural support.

By selecting any of these options for capital transfer, you will be entitled to reside, work, and study in Portugal, with unrestricted travel within Europe’s Schengen Area. Notably, participants need to spend only an average of seven days per year in Portugal over the five-year period, and these stays count towards potential eligibility for citizenship.

How to address the right investment Fund ….

Choosing the best fund investment for a Golden Visa requires a meticulous assessment of various factors to ensure an optimal outcome. Here’s an elaboration of what I consider the key considerations:

• Eligibility: Due to recent legal changes, funds must follow specific investment criteria to qualify for the Golden Visa, such as not investing in real estate development. It’s essential to thoroughly analyze the fund’s regulatory documents and seek guidance from legal advisors to ensure compliance with the new law.
  
  
• Risk/Return Assessment: Tailor your investment strategy according to your risk tolerance, return expectations, and interests. For example:
  
  
  • A more conservative investor may be looking more to Funds more focused on Debt investments with strong companies;
  • An investor that worries about liquidity, would be more interested in an open-ended Fund that invests in Public Markets.
    
    
• Alignment of the Fund Manager: In the pursuit of selecting the most suitable fund for a Golden Visa investment in Portugal, it’s crucial to delve into the commitment of the fund manager:
  
  • Fund Manager’s Personal Investment: Assess whether the fund manager has personally invested in the fund, as this perfectly aligns their interests with those of investors. A significant personal investment indicates confidence in the fund’s potential for returns and can serve as a positive indicator of commitment.
  • Fee Structure Alignment: Examine the fee structure of the fund to understand how it incentivizes the fund manager to deliver attractive returns. Look for fee arrangements that reward performance and align the interests of the fund manager with those of investors. A fee structure that incentivizes the fund manager to achieve superior results can be indicative of a strong commitment to generating value for investors.
    
    
• Fund Manager’s Track Record and History: Evaluate the Fund Manager’s historical performance and track record over time. Consistent and reliable performance across various funds throughout diverse market conditions is indicative of a reliable Fund Manager.
  
  
• Non-Golden Visa Investors: Acknowledge the presence of non-Golden Visa investors who invest purely for financial returns, without having any other incentives (e.g. residency/Visa/tax benefits). Established and successful Entities manage funds with a diverse investor base, including institutional investors, high-net-worth individuals, and financial institutions.
  
  
• Competitive Landscape: Compare the fund manager against its peers in the market. Assess factors such as management expertise, inception date, size of the team, assets under management, and investor base profile to determine its competitive position within the industry.
  
  
• Economic and Political Environment: Consider the broader economic and political landscape when selecting a fund. Factors such as economic growth, government policies, and regulatory environment can impact the fund’s performance and outlook depending especially in the Fund’s strategy.

By carefully considering these factors, investors can navigate the complexities of fund investments for Golden Visa, ensuring an informed and practical approach.

About Oxy Capital: Leading private equity in Portugal (established in 2012), with >€1,4bn AUM under several strategies, ranging from growth/buyout, restructuring, real estate, and public markets. Over the last decade, we have invested in more than >80 companies and have exited > 40. Main investors include Portuguese banks, international institutional investors, High-worth Individuals, and Oxy Capital’s team.

Oxy Capital’s Golden Visa Options: On our Golden Visa strategy we currently have different funds with different strategies and risk/return profiles: Private Debt, Private Equity, and Public Markets (Equities and Bonds).

If you want to know more about Oxy Capital and the Golden Visa Funds, please do not hesitate to contact us goldenvisa@oxycapital.com