Looking for Golden Visa flexibility… without the hefty price tag?
As we’ve said before, if you’re looking to settle in Portugal, you don’t need a Golden Visa — you can get the D7 Visa without the need for a property investment. The downside — you need to be six months or more on the ground each year to maintain it.
But what if you’re not ready to move there just yet? Or what if you’re really only looking for a Plan B in case of the catastrophe back home?
That’s when the Golden Visa becomes an excellent option. It affords you the right to settle in Portugal, but not the obligation. And with a minimum required stay of only one week per year, it can truly be considered a great “paper residency”.
Yet for a lot of folks, the Golden Visa doesn’t make much sense from an ROI perspective.
If you were to opt for the property investment track — priced from €280,000+ (~$330,00) to €500,000+ (~$589,000), depending on which property type you choose — you are looking at a maximum rental return of only around 3-4% per year.
However, starting from 2022, popular travel destinations like Lisbon, Porto and the Algarve region will no longer be eligible locations for the Golden Visa. As a result, you will be looking at seriously low yields, outside of potential capital appreciation.
(There is another option available — a €350,000 investment in a Portuguese investment fund. It is getting more expensive starting from 2022, but at least, you may still have enough time to invest before 2022, as the process is quicker.)
So what are the alternatives..?
Enter the Highly Qualified Activity Visa Program for startups
Launched in 2019, the Highly Qualified Activity (HQA) Visa is essentially a “hybrid” startup visa program requiring two key components: Portuguese business formation, and an investment in high-value research or R&D activities. The latter is conducted by a public research institution in Portugal (typically a university). You can learn more about the legal basis for the visa program here.
Key program benefits
- PRICE: Instead of looking at a total investment of €280,000+ (~$330,00) – €500,000+ (~$589,000), still excluding fees, transfer duties, exit fees, etc., your total cost with the HQA Visa is €175,000 (~$206,500). All-in. This amount includes €25,000 towards your startup enterprise’s capitalization, as well as your mandatory research investment.
- LOW PHYSICAL PRESENCE REQUIREMENT: The HQA Visa offers comparable flexibility to a Golden Visa — which only requires a minimum in-country stay of one week per year, on average.
- PASSIVE INVESTMENT (IF YOU SO CHOOSE): The program itself is ultra-flexible: you can be fully involved in the startup, or virtually hands-off, depending on your preferences. If you’re only interested in getting the residency, your incubation partners can take care of all the heavy lifting and day-to-day management for you.
- APPLICATION SPEED: Instead of waiting 12 months+ as is often the case with the Golden Visa, you’re looking at being approved and getting your residency permit(s) issued within only three months. (Approvals are known to take only 30 days.)
- EASY REQUIREMENTS: Unlike many other conventional startup visas, the HQA has no business performance or mandatory job creation requirements. You don’t even need to launch a successful product or service by the end of your 3-year incubation period.
- CLEAR PATH TO CITIZENSHIP: After five years of holding Portuguese legal residency, you can become eligible to apply for citizenship and a passport — at which point your real world ties with a Portuguese university can help support your application.
- NO WIN, NO FEE: Your entire investment fee is refundable in the event that your visa application is not approved.
Who is this program for?
The HQA Visa is ideally suited for entrepreneurs and startup founders who would like to start seeding a future business option in Europe, as well as for existing business owners seeking to expand their operations in Europe.
It targets overseas, suitably qualified professionals who have already achieved meaningful success in their respective fields. And while having a clear business idea is not essential upfront, it does certainly help.
But the HQA is not only a visa for startup folks; the program can also tick the boxes for prospective Golden Visa property buyers who’d prefer not to tie up so much capital for five years or more. The same goes for prospective Golden Visa applicants with a research-driven business idea they believe in.
The ultra-low physical presence requirement will likely also appeal to established business people with commitments outside of Portugal.
So how does the HQA startup program work?
In essence, this is a residency by business investment / startup visa product with an emphasis on innovation and technological research. The process steps are as follows:
- You enter a service agreement with the business incubator (your service provider).
- You transfer your €175,000 incubator fee into an escrow account.
- Your business incubator pairs you up with a rural Portuguese university that is prepared to undertake your proposed research / R&D project (the project will get funded from your incubator fee.)
- You obtain an endorsement from your university research partner, which in turn enables you to meet the requirements for the Portuguese HQA Visa.
- Once your visa application is approved, the research project and a three-year business incubation process kicks off. Your visa is renewable after the first two years, so the renewal cost and assistance is included in your fee.
- Your startup incubator will assist you with comprehensive operational management and back-office support.
The catch?
This residency investment is effectively a fee — hence a sunk cost. Also, any potential ROI is going to depend heavily on whether your new Portuguese enterprise will be commercially successful or not.
So you’ll end up with residency and a path to citizenship, and you’ll 100% own a new Portuguese company and all the intellectual property it creates… but you should bank on forfeiting your €175K in capital.
On the bright side, when compared with a Golden Visa, where you realistically need to spend at least €350,000, spending only €175,000 on a fully flexible residency in Portugal leaves you with at least another €175,000 to invest in other high-yield opportunities (e.g. within your own overseas business).
The bottom line
While a startup visa is not going to appeal to everyone looking for a flexible Portuguese residency, for the right person, it could be a game-changing platform from which to launch a new life and a thriving business in Europe. Given the mostly passive nature of the investment, however, it could also just serve as a cost-effective Plan B.
Yours in Freedom,
Team Sovereign Man
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