Portugal’s Startup Visa Program, Bridging the Investment’s Brinks

Indeed a gateway for entrepreneurs to knock the European market

Portugal’s economy has gone through a steady recuperation from a deep recession. An extensive structural modification agenda has supported this recovery and the ongoing diminution of imbalances built up in the past. Stronger investment, skills, and productivity will increasingly be the basis for sustainable income gains. Portugal has undertaken a determined structural reform program since 2011.

Reforms have spanned across a wide range of policy areas, product markets, labor markets, taxes, regulations and the public sector. These reforms have supported a gradual recovery of the Portuguese economy, with additional tailwinds resulting from highly accommodative monetary policy and low oil prices.

When it comes to investment ratio or percentage, Portugal has had a less pronounced surge in investment even before the crisis than other euro area countries, and following the sharp post-crisis decline investment is now more than 30% below its 2005 level. Private and public investment also declined from 15.3% and 5.3% of GDP in 2010, respectively, to 13.0% and 2.3% in 2015. European Structural and Investment Funds (ESIF) now amount to 1.9% of GDP and finance a large part of public investment.

During the first half of 2016, investment has fallen even further. Turning this around and rebuilding the capital stock is one of the key challenges for the economy. To cope with this issue, Portugal has introduced a new visa policy to be promulgated in 2018. Portugal’s golden visa residency and second passport program is the most efficient option for those who want to live and work in the European Union.

Portugal’s golden visa option is much more flexible than competitors and the government is working hard to approve applications quickly in 2018. This golden visa program is much more than residency. It’s a path to citizenship within the European Union. If you Maintain your temporary golden visa in good standing for 5 years, and your permanent residency visa for 1 year, after going through this particular procedure one can qualify for citizenship in Portugal. A second passport from Portugal is a very precious travel document for other countries with a low rated passport.

Portuguese citizens have visa-free or visa on arrival access to 171 countries and territories, ranking the Portuguese passport 6th in terms of travel freedom (tied with the Canadian, Greek and Swiss passports). A passport from Portugal allows us to live and work in the European Union. A second passport is also a path to renouncing US citizenship and getting the IRS.

This golden visa program is designed to attract foreign investment in the country. It’s also meant to bring high net worth individuals into Portugal. Thus, while Portugal is in line with other EU residency programs with a path to citizenship, the golden visa is not a “cheap” visa by any means. NO doubt the best EU residency visa in 2018 is of Portugal.

Portugal has the most competent and low cost residency program in the whole vicinity. Portugal is also the best second passport option by investment in the European Union. Portugal is not only the cheapest residency and second passport program available, it’s the best indeed! Most investors put up € 1 million to start a business or buy real estate for at least € 500,000. Legal and government fees are additional.

The Portuguese Immigration Services have released the statistics of the Golden Visa program up to the end of April 2017. These latest numbers show that the total investment brought by the program is over 3.3 billion Euros. According to these statistics, there were a total of 5,412 investors and 9,023 family members approved up to the end of October 2017, with the vast majority of investor’s still selecting property as their qualifying investment. After analyzing the situation Portuguese government has decided to introduce some changes to the general immigration law of the country.

This would be a helpful step to widen the scope of qualifying investments and correspondence. Facilitation of a specific system for entry into the national territory for seasonal work, by the issuance of a short-term visa specific for working hours of less than 90 days, and those interested and keep their place of residence in a third State.

The Portuguese government has actually includedtwo new categories of investment for the granting of the residence permit for investment (ARIs): the transfer of capital for the constitution of companies or for the reinforcement of the company’s share capital already existing and the transfer of capital dedicated to investment of companies, which are submitted to the process of corporate recovery (PER).

Moreover, the reduction of amounts less than those previously required of capital transferred for the acquisition of units in units of investment funds or of venture capital dedicated for the capitalization of small and medium-sized enterprises which, for that purpose, present their viable capitalization plan.

They have also introduced the residence visas and authorization which permits for teaching activity as well as cultural activity,

We can see the new Portuguese visa policy as its been introducing an exceptional system for the granting of a residence permit for the activity by immigrant entrepreneurs, with the possibility of residence visa exemption, corresponding to an effort of attracting all new business models, connected to technology and innovation in order to contribute for a more competitive economy by attracting foreign entrepreneurship. For this purpose a mechanism for certification of incubators for hosting the foreign entrepreneurs is on its way towards pragmatism.

The Office of the Ministry of Economy announced the approval of the Startup Visa program. This is one of the initiatives to be implemented by the Government under the Startup Portugal Program, which also comprises a package of measures aimed at boosting entrepreneurship in Portugal and attracting investment, talent and innovation capacity. The Startup Visa initiative will allow the fast granting of residency visas to third-country entrepreneurs who intend to establish innovative businesses in Portugal through investment and creation of qualified employment, thus allowing them to create or move their startups to Portugal.

In this regard, the Government expects these companies to join the incubators of the Startup Portugal network, thus benefiting from the incentives and support granted under the Startup Portugal Program. This Program is one of the most innovative programs for attracting and securing investment and international talent launched in Europe.

Applications for the Visa Startup Program starting in January 2018, must be submitted through an online platform. The supervision of the processes submitted under the Program is assigned to IAPMEI. In order to grant access to the Visa Startup Program, foreign entrepreneurs must show that they intend to develop in Portugal a business activity corresponding to the manufacture of goods or provision of innovative services, and, for this purpose, they will open or transfer to Portugal companies and/or projects that are technology and knowledge related.

The entrepreneur shall also demonstrate that the establishment or transference of the company to Portugal will enable the creation of qualified employment. The entrepreneurs shall also demonstrate that the company has the potential to reach a value of, at least, EUR 325.000,00 three years after the incubation period, or obtain an annual turnover of more than EUR 500.000,00.

According to the released statement, the assessment of the economic and innovative potential shall be based on several criteria, including the degree of innovation, business scalability and market potential, management team capacity, potential of creation of qualified employment in Portugal and the relevance of the applicant in the team, as reported by the Government. The Program will be regulated by a joint ordinance of the Ministry of Economy and the Ministry of Internal Affairs.

This startup visa will certainly provide favorable business environment and necessary guidance to startups for their business in Portugal and would ease situation for those who tend to start their entrepreneurship activities in the said region. It will also provide a platform for liaison with the Portuguese government, investors, incubators, consultants, universities and research and development institutions for empowering the startup sector.

This will also assist startups through their lifecycle with focus on important aspects like obtaining financing, market expansion, feasibility testing, business structuring advisory, enhancement of marketing skills and technology commercialization.

In the same context, Center of Pakistan and International Relations (COPAIR) has joined hands with Global Entrepreneurship Network (GEN) to launch StartUp Pakistan project. The startup visa for Portugal can open further opportunities for people from both the sides for a collective venture.

As a member of the euro area, with geographical and geopolitical proximity, both physical and historical, to relevant emerging markets in Africa and South America, Portugal looks well placed to attract more investment, particularly the kind that uses its highly qualified and flexible young workforce and world-class infrastructure.

The emerging nations like Portugal and emerging entrepreneurship campaigns such as StartUp Pakistan should further collaborate with related partner organisations for more positive and successful ventures. This startup visa program will prove to be an actual gateway to start and succeed the innovative business ideas by entrepreneurs.

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About Saima Zaman 40 Articles
Writer is the Assistant Editor ‘Mélange int’l Magazine’, ‘The Asian Telegraph’ & Project Coordinator (COPAIR); a degree holder in communication & media sciences.