Dear Investors and Partners,
Following the Meeting of the Council of Ministries and the announcement on February 16th, 2023, by the Prime Minister about the housing reforms in Portugal, Mercan Properties would like to inform its investors that the Government has introduced in the public consultation process in course, a draft of the preliminary proposal of law on the March 3rd, 2023. This public consultation process will continue until March 13th, 2023.
As mentioned in our previous communication about this draft proposal, a public debate is currently taking place. Therefore, the draft presented on the March 3rd is simply stating what was announced at the press conference on the February 16th and does not include any amendments or alterations resulting from both the public hearing taking place, and the several contributions already made public by developers, associations, law firms, lawmakers, political parties, and other relevant stakeholders.
In what concerns the ARI (Golden Visa) Program, this preliminary draft includes, as announced by the Prime Minister in its press conference, the revocation of the ARI program. This is one of the steps in the legislative process and there are others still to come. It is important to underline that this is a preliminary draft proposal and it does not have any legal value at this stage.
After the public consultation ends on March 13th, the government will analyze the different contributions and, if the deadline announced by the Prime Minister is met, bring them to the final discussions within the government in the council of ministers on March 16th.
- Following the Council of Ministers, the final proposal will be presented to the public and sent to be discussed in the Parliament, this is a process that is unlikely to start before the end of March.
- Considering the discussion in the general session of the Parliament, followed by the analysis in the respective specific committee and the final vote, two months may be needed for this step to be completed.
- Finally, the law will be submitted to the President of the Republic, who has 20 days to ratify or veto the document.
The two most relevant points at this stage are:
- The coming into force of any potential amendments to the ARI program – namely its termination;
- The regime of the renewals of the residence permits.
As it has been made public the solutions presented by the Prime Minister on these matters, do not fit within the regulation set forth by the Portuguese constitution. Furthermore, the proposal presented is unclear and does not cover all relevant situations, and fails to present any alternative to the current legal regime. As we see it, and as it has been transmitted by several prominent lawyers and law firms, the present draft does not comply with the necessary requirements to be presented to Parliament, approved, and subsequently published by the President. Therefore, it is our firm conviction that this will not be the final wording of the amendment to the ARI program regime.
Nevertheless, with regards to the projects developed by Mercan Properties, as through our 34 years of history in the world, we are strong believers in walking the talk, and therefore we are issuing a side letter that is aimed to cover any potential liabilities for the investor arising from the current legislative moment.
Moreover, we continue to, directly and through the associations we are members of, participate in the public hearing during the month of March, and alongside the municipalities, and other entities in an effort to portray the benefits of the program as well as the need to guarantee and safeguard an appropriate transition period for any amendments to come in place.
Ultimately Mercan is entirely committed to doing everything in its power to engage the Portuguese government in fulfilling the commitments, and that is the underlining basis of the trust investors deposit in the ARI program.
Mercan Properties will continue to follow this matter closely and will provide full support and information on the current discussion and decisions.