A correspondent for Gazeta.Ru visited Portugal and found out where to move with your family, where it is best to do business, and for whom renting in the city center costs just a couple of euros a month.
How to obtain a residence permit
The first thing you notice when leaving Lisbon airport is advertisements for property sales. The banners are, of course, aimed at foreigners, but they have only two words in English – Real Estate, and all the other characters are Chinese. This is not surprising: the Chinese are far ahead in Portugal's investment immigration program.
The Golden Residence Permit program was launched in October 2012, and since then it has had 1,564 participants, of whom 1,249 are Chinese.
In second place are Russian investors, but the numbers are tiny: as of the end of September 2014, according to official data, only 50 Russian investors have taken part in the program. Next come Brazil, South Africa, and Lebanon.
In the Portuguese government, questions about whether the country fears an influx of Chinese and whether quotas will be set for them are met with surprise. 'We welcome any investment; we do not care what country it comes from. We will not set a quota for Chinese participation in our program. And no one has ever been refused simply because they are Chinese or Russian,' said Luis Castro Henriques, Executive Director of AICEP (Portuguese Agency for Investment and Foreign Trade), at a meeting with journalists.
The developed investment immigration program involves issuing a five-year residence permit for a contribution to the Portuguese economy. There are three ways: invest at least 500,000 euros in purchasing real estate, deposit 1 million euros in a Portuguese bank account, or create at least 10 jobs. Investment activity must be carried out for five years, but its type can be changed. After five years, one can apply for a permanent residence permit, and after another year, for citizenship.
It was assumed that investors would use all three instruments evenly, according to the international company Henley & Partners, which acts as the government's official consultant. But in reality, only real estate turned out to be understandable to investors. Of all program participants, about 95% received a residence permit for real estate purchase.
However, the total volume of investments met the government's expectations. It was planned that by the end of 2014, the amount of investment in the country's economy since the program's launch would be 1 billion euros. This figure was already reached on October 12. Of the 1 billion total investments in the Portuguese economy under the Golden Residence Permit program, 906.5 million euros came from real estate.
The crisis and recovery from it
The investment immigration program was adopted in Portugal, as in many other European countries, to help the economy recover from the crisis. In 2011, Portugal was on the verge of bankruptcy, although a year earlier the country's economic recovery indicators after the 2008 global financial crisis were among the best in the EU. But in the spring of 2011, Portugal had to ask the European Union for financial assistance and join the ranks of Ireland and Greece. Portugal was granted a loan of 78 billion euros.
To bring the country out of the crisis, the Portuguese government used about 500 political and economic instruments. Reforms affected all spheres of public life. The 'troika' of international creditors – the European Commission, the European Central Bank, and the International Monetary Fund – was satisfied with the measures taken by the country. The budget deficit was reduced from 9.8% to 4.9% of GDP by the end of 2013, but by European standards this is still a lot.
Portugal faced terrible unemployment: in the spring of 2014, 35.4% of young professionals were unemployed. The government hoped that the investment immigration program would help partially solve this problem as well – through the creation of jobs by foreigners. But as already mentioned, this instrument turned out to be unpopular.
Portugal managed to improve its situation through growth in exports and tourism. Last year, exports accounted for 41% of GDP, compared to 28% in 2008.
As for real estate, some segments were hardly affected – for example, luxury resort real estate, which depends little on demand from Portuguese buyers. Simpler apartments fell in price by 10-20% depending on the region. Since last year, there has been a gradual recovery in prices and sales, but only this autumn was the sales level of 2010 reached, and prices have still not returned to pre-crisis levels.
The recovery of the real estate market was aided by high interest from Chinese, Russians, French, British, and Scandinavians. According to official data, real estate prices in Portugal have increased by 1.22% since the beginning of the year. This is the first price increase in almost four years – since the third quarter of 2010. Currently, the average property price in the country is 993 euros per square meter.
Continuation of the topic: RESIDENCE PERMIT FOR PORTUGAL: REGIONS
Ekaterina SAKHAROVA.
Gazeta.ru