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Five hundred thousand euros for a residence permit in the Schengen zone: this was the Portuguese government’s offer to rich foreigners since 2012. It was taken advantage of by around 12,000 investors who gave themselves and their family members a ticket to Europe. Now – also due to EU pressure – Portugal will have to end the “Golden-Visa Program”. Prime Minister Antonio Costa announced that it will expire on March 16.

“It’s good that the golden visa is finally being abolished, but it should never have been introduced,” says former Socialist MEP Ana Gomes, who opposed the scheme in the first place. “It was an invitation to money laundering and allowed criminal and terrorist organizations to legally infiltrate the Schengen zone.”

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More than half of the applicants came from countries where the risk of money laundering was particularly high, and Portugal never investigates the origin of these funds.

“Golden jobs for brokers”

What was announced as a program to boost the Portuguese economy has turned out to be mainly a business for the real estate industry: instead of creating new companies and jobs, mainly wealthy Chinese are buying property in Lisbon and its surroundings, followed by Brazilians, Turks, South Africans and Russians. Almost 90 percent of the approximately seven billion euros collected in total went to the housing market. Only 22 golden visas were granted to create jobs, according to figures from the Foreigners Police SEF. Result: a meager 280 new jobs in at least ten years.

Nevertheless, Hugo Santos Ferreira, president of the Portuguese Real Estate Association, seems disappointed by the imminent end of the “golden visa”: “This is an attack on all foreign investors who want to invest their money in Portugal. Its credibility and good reputation as an investment-friendly country is suffering.” However, Portugal needs international investors to boost its economy, it cannot ignore an important instrument that brings in over 600 million euros a year. “In addition, the program has created thousands of jobs in construction and real estate,” says Santos Ferreira.

Housing crisis and money laundering

But there is another side to the matter: in recent years, real estate prices in Portugal, especially in the two largest cities of Lisbon and Porto, have skyrocketed. Also because of the “Golden Visa” program and because more and more EU citizens are buying houses and apartments in Portugal. At prices that the Portuguese can no longer afford. “Especially in the luxury segment of the market, the Golden Visa has caused strong increases in property prices,” says former MEP Ana Gomes.

Another reason for stopping the offer to foreigners is the often dubious origin of the applicants. After the start of the war in Ukraine, Russian citizens have been banned from investing in Portugal. They are excluded from the golden visa. However, according to Gomes, countries like China or Vietnam do not excel at transparency either. Santos Ferreira, president of the Portuguese Real Estate Association, believes that all transactions in Portugal are strictly controlled. Black sheep are everywhere, but this does not mean that there is no reason to abolish the golden visa: “Nobody wants to close the banks, although it is known that money laundering can take place there too.”

Although Santos Ferreira still hopes the government will withdraw the amendment at the last minute, the end of the €500,000 entry tickets to the Schengen zone via Portugal appears to have come. “It was quite simply opaque and dangerous,” says Ana Gomes. It remains to be seen what will happen to Golden Visa holders. It is said that their residence permit should only be extended if they actually live permanently in Portugal.