Introducing Portugal’s New Artistic Production Golden Visa

PLEASE NOTE: The Portuguese authorities announced serious changes to their Golden Visa program on February 16, 2023. Here’s the details on the latest program changes.

The Portuguese Golden Visa has been a class-leading program for the past decade. But given the latest announcement and present uncertainties around how and when the program will end, caution is advisable…

Missed the boat on a property based Golden Visa in Portugal? Today, we highlight a brand new option with an investment requirement of only EUR200,000 – AND a capital guarantee.

Golden Visas post property investments: New year, new investment options

Many an industry insider and prospective applicant lamented the recently implemented rule changes to the Portuguese Golden Visa. While Porto, Lisbon and the Algarve region still qualify as commercial property locations, residential real estate in these areas are no longer eligible under the Golden Visa program.

Previously, residential properties in these areas accounted for the lion’s share of Golden Visa applications. But the program’s supporting legislation has long made provision for a range of other investment options as well. And in 2022, with the larger cities and coastal regions no longer being an option, the market is shifting.

As we’ve previously reported, the fund-based option has gained greater popularity as a result. It’s a more hands-off option than real estate, as you merely need to invest in a Portuguese investment fund. But this too became more expensive in 2022, with the minimum investment jumping from €350,000 to €500,000.

We’ve also been predicting that these two changes, in combination, would lead to the emergence of new and innovative investment options beyond property and fund investments.

And as it turns out, this is already happening.

But before we get into the latest new investment option, let’s recap the investment categories as they stand today:

Given that one could previously qualify for a Golden Visa by buying a property asset in a “decent” location for as little as €280,000, AND make a potential return, the €250,000 (or €200,000 for projects in low-density areas) Cultural Heritage donation – a sunk cost – made zero sense.

And unsurprisingly, literally only four applicants had chosen this option to date.

But now, with applicants forced to buy property in the more remote areas of the Portuguese interior – think: “low tourism demand and low growth potential” – they have instead been opting for fund-based investments. (Despite the steep increase in the investment threshold.)

Meet the all-new Cultural Production Golden Visa

According to this official definition published by SEF, Portugal’s border control agency, a Golden Visa can be obtained by “[making a] ​capital transfer on the amount equal to or above €250,000 for investing in artistic output or supporting the arts…”

(Note: A 20% discount applies to low-density areas, hence the minimum being €200,000.)

And so, in 2022, the market got innovative in addressing the need for a lower priced, reasonable yield option.

We recently stumbled across an example of such a “productized” version of the €200,000 Cultural Production Golden Visa.

A qualifying investment of €200,000 in an eligible Portuguese feature film production project, filmed in a low-density location, can meet the program requirements outlined above.

Under this track, Golden Visa investors become proportional shareholders in the project’s production company.

And, thanks to an innovative mechanism for project co-funding and pre-sales to distribution partners and channels, the risks of project under-funding can be mitigated.

Interestingly, the Cultural Production track is the only Golden Visa option to offer official pre-approvals – and these are issued within 15 days. The process of getting the actual visa, however, can take up to 12 months or more (similar to other Golden Visa investment options).

What are the anticipated benefits of the Cultural Production option?

• Capital guarantee: Some projects will return your principal – backed by notarized deed.
• Visa pre-approval: Unlike with conventional property and fund-based investments, the Cultural Production track offers visa pre-approvals before any capital is committed.
• State facilitation: By law, your application can only be presented by an organ of state; it can NOT be done by a lawyer or third-party service provider.

• Lower ancillary costs: Property based investments feature transfer duties, management, maintenance and municipal taxes, along with sales-related exit costs. Fund-based investments are typically subject to ongoing management fees and potentially even onboarding fees. The Cultural Production track features neither.
• Lower price, opportunity costs: Priced from only €200,000, the Cultural Production track means more than 50% less capital tied up for 5 years or more than you’d have with a fund investment. And it’s even cheaper than the minimum property investment amount of €280,000.

What are the potential risks?

• New program, no track record: While the Cultural Production option certainly seems interesting, it is brand new, and thus there is no track record of applicants either making a profit or successfully applying. You may therefore encounter some process related teething issues or delays. However, the process appears much simpler than for real estate investments, for example.
• Industry related risks: Film investments in general carry a significant amount of risk, however the funding model being applied in this instance reduces risk. In addition, the film industry was severely hit by Covid-1984. And it may be impacted again by future pandemic waves, which could result in production delays and deferred potential profits. It could also see your capital being tied up for longer than 5 years, even if your Golden Visa approval is not jeopardized.

The bottomline

This is a brand-new investment track with no proven record of success, either in terms of financial performance or of applicants obtaining their Golden Visas. And we certainly don’t endorse or promote any specific Golden Visa investment track. But part of our mission is to inform readers of new potential opportunities as we discover them.

While there have been a lot of significant changes to Portugal’s Golden Visa program in recent times, quite a few of these have been fairly advantageous. And given the price increases on fund investments, and real estate becoming less attractive, we will most likely see more of these new and innovative options coming onto the market in the near future.