Dear Editor,
The Government’s quest to attract foreign investment from non EU residents into Portugal through the concession of “Golden Residency Permits” raises a number of issues worthy of public debate.
The relevant statutory provision covered by law 11820-A/2012, and amendment dated 28th January 2013, is comprehensive and at first sight appears to safeguard the provisos of “clean” investment into the country. However questions concerning compliance and governance warrant a look as to the modus operandi of the various forms of investment contemplated.
The acquisition of property for amounts equal to or above € 500,000 is covered by Article 6 of the above legislation, and among other conditions requires a Portuguese bank to “certify” that the minimum amount of € 500,000 has been transferred for the purchase of the property.
This implies a full audit trail of the payments received to ensure they are “clean”. The legal provisions are unclear as to how these checks are going to be monitored to ensure proper statutory and regulatory compliance at national and EU level. The full funds must then be deployed for the purpose of the acquisition. Again, what mechanism will be in place to guarantee this part of the equation?
Under the EU Anti Money Laundering Directive of November 25th 2005, adopted December 15th 2007, responsibility for due diligence processes regarding property investment extends to estate agents, lawyers and accountants. This covers not only initial transfers of money but all subsequent ones. What mechanisms will be in place to supervise these checks?
The other option of obtaining residency by way of a commercial investment of a minimum of €1,000,000 is covered by Article 7 of the same amendment. Among other provisions, Article 7 requires written confirmation from a Portuguese bank that the account of the prospective investor has an average quarterly balance of €1,000,000. However, no mention is made of the requirement to satisfy the respective legal and regulatory provisions of opening accounts, nor is a timeline established over which this balance must be in place. Effectively it could amount to a simple snap shot in time, opening a loop-hole whereby candidates could gain Portuguese residence status without fully meeting the said conditions as investors.
An offer of Portuguese citizenship after a period of 6 years following the investment, although not explicit in the legislation, would translate into Portugal “selling” access routes to residence in all 27 EU member states.
Manuel de Teves Costa
London
