The Portuguese golden visa scheme has been a big help for UK expats looking to move to the Mediterranean country and it is quickly becoming an attractive proposition for people from Hong Kong.
“We have seen more inquiries about Portugal properties from Hong Kong buyers in the past few months,” Binoche Chan, chief operating officer at Hong Kong real estate agency List Sotheby’s, told newspaper South China Morning Post (SCMP).
“Many see Portuguese residency as an alternative option in Europe,” she added. “The entry requirements are relatively low against other popular destinations.”
Since its unveiling in 2012, the Iberian country’s golden visa scheme has attracted 7,500 applicants from across the globe, contributing €4.6bn (£4.3bn, $5.2bn) in investment, according to List Sotheby’s International Realty in Hong Kong.
Rise of applicants
The golden visa programme grants successful applicants the right to live, work and study in Portugal, along with visa-free travel within the 26 countries under the Schengen area of Europe, and eventually a legal residence.
Expats must fit at least one of the following categories to claim Portuguese residency by investment:
- Capital transfer of at least €1m into Portugal;
- The creation of at least 10 job positions in Portugal;
- The purchase of real estate property in Portugal worth at least €500,000;
- The purchase of real estate property in Portuguese urban regeneration areas at least 30 years old to the value of at least €350,000;
- Investment of at least €350,000 in scientific research in Portugal;
- Investment of at least €250,000 in Portuguese arts, culture and heritage; or,
- Investment of at least €500,000 in small and medium businesses in Portugal.
Citizenship and advisory firm Henley & Partners said that inquiries about Portugal from Hong Kong have risen 260% in June from a year ago.
The number of inquiries in July more than doubled from June.
“Portugal has proven to be an extremely attractive option, its relatively low cost of living, beautiful and varied landscape, Mediterranean climate, rich history and culture, and very high standard of safety and security have all been strong drawcards,” said Paddy Blewer, Henley & Partners group director of public relations.
Protests spark move
Over the last few months, protests have been rife across the special administrative region.
Recently, FSA‘s sister publication International Adviser wrote about whether the disruption is making some people question if they should keep their money in Hong Kong.
“We have always had an important number of clients based in Hong Kong that have applied and obtained the residency in Portugal through the Golden Visa programme,” Francisco Barata Salgueiro, senior partner at Edge International Lawyers, told IA.
“The flow of clients from Hong Kong has always been stable but we have been in fact noticing a relevant increase in client numbers and enquiries from Hong Kong.
“I would say that the increase in the number of enquiries and confirmed clients started even before the latest events in Hong Kong but it is a fact that this increase become more substantial in the last three months or so.”
David Lesperance, managing partner at citizenship advice firm Lesperance & Associates, said: “Most high net worth individuals are only now deciding they need a backup plan and an overseas residency, in case they need to leave the city in a hurry.”
Conversations
IA reached out to Lesperance and asked what he tells his HNW Hong Kong clients about the move to Portugal.
He said: “Processing of the Portuguese golden visa is relatively quick when considering the other options.
“Along with the selection and purchase of a property (which adds time), there are also various investment options, which reduce time from application to residence permit.
“Unlike other alternatives such as Greece, Portugal has a very favourable tax regime with the option of a 10-year tax holiday.
“For those clients who intend to fully relocate to Portugal and thereby become tax resident, this is critical. For an HNW person, the on-going tax cost makes the original cost of the golden visa pale by comparison.
“This is a critical point that the salespeople never make in pursuit of their commission on the real estate sale.
“For those who just want to keep relocation as a ‘just in case option’, the physical presence required to maintain the residence status in Portugal is minimal. Especially compared to almost all of the other golden cisa programmes.”
Wider trend
Henley and Partners’ Blewer also said the HNW clients at the heart of this influx might just be looking to diversify.
“I think this is part of a wider trend. Savvy global property investors understand that investment migration products, such as Portuguese and Greek residence by investment programmes, create multiple value outputs,” Blewer told IA.
“Of course, the valuation of real estate and the yield it creates, as with any asset class, will be effective for good or ill by global volatility.
“However, investment migration products have an inbuilt volatility hedge, in that there is a wider value equation that is separate to the standard real estate metrics – everything that comes with enhanced mobility.
“My point is that investment migration products aren’t just one thing. More and more, they’re part of the diversification of the savvy ultra- or high net worth global investment portfolio, and the data from Hong Kong and China supports this.”
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