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Portugal’s Golden Visa Program is Ending: Where Can China’s Ultra-Rich Go Next?

Portugal has become an appealing destination for affluent Chinese individuals seeking to escape pandemic restrictions and political uncertainties. Offering a mild climate, a relaxed lifestyle, and investor visas providing access to the entire European Union, all for as little as 350,000 euros, Portugal has attracted thousands of Chinese investors over the past decade. This influx of capital, which peaked at $1 billion annually in 2014, has significantly reshaped Portugal’s urban landscape.

However, this trend is evolving. It’s not due to a lack of interest; quite the opposite. More affluent Chinese are now considering leaving or establishing backup plans due to China’s Covid-Zero policy’s impact on economic growth. Investment migration consultancy Henley & Partners estimates that around 10,000 high-net-worth Chinese individuals are looking to move $48 billion out of China this year, with some exploring Portugal’s golden visa program as an exit strategy.

Yet, obstacles are emerging on both sides. The European Union has expressed reservations about residence and citizenship-by-investment programs, with Cyprus and Malta discontinuing their golden passport initiatives under EU scrutiny. Portugal’s golden visa program involves an in-person interview, which is currently challenging due to China’s Covid-related travel restrictions.

These combined pressures are putting such programs at risk across Europe, with 2022 potentially being the first year in which Chinese investors no longer dominate Portugal’s golden visa recipients. This leaves wealthy Chinese with fewer options and Portuguese business leaders and real estate agents facing a reduced source of foreign investment.

Bernardo Mendia, the secretary-general of the Portugal-China Chamber of Commerce and Industry, highlights that many Chinese investors have engaged with Portugal after participating in the golden visa program. He notes that Portugal’s real estate market was stagnant before Chinese government policies encouraged overseas investments in the 2010s, but recent political changes have altered the landscape.

Portugal’s golden visas were introduced ten years ago to address the country’s public finances following a 2011 EU bailout. This initiative, coupled with privatizing state-owned companies, led to a significant wave of Chinese investment in various sectors, including energy distribution, healthcare, finance, construction, and aviation. Thousands of affluent Chinese obtained Portuguese residency through this program. However, the data indicates a decline in Chinese applicants, with only 16% of successful applicants in 2022 compared to 81% in 2014.

Portugal’s golden visa program grants residency in exchange for specific investments, making it a gateway to EU citizenship. However, European Commission President Ursula von der Leyen now emphasizes that EU values “are not for sale,” signaling a shift from past policies. Portugal has also restricted the program in certain regions, directing investments to less-developed areas.

Despite these challenges, some individuals, like Fong Tak-ho, continue to pursue Portugal’s golden visa. Fong, who has invested in multiple Portuguese properties, submitted his golden visa application amid the pandemic and moved to Lisbon earlier than planned due to events in Hong Kong. However, visa delays and barriers have prompted immigration firms to explore alternative markets like Greece and Malta.

The geopolitical landscape, China’s evolving image, and the EU’s stance on investment migration are reshaping the dynamics of Chinese investment in Portugal. While Portugal’s enthusiasm for Chinese investors may have diminished, prominent Chinese figures such as Jack Ma and Guo Guangchang continue to explore opportunities in the country.

Even as Portugal diversifies its relationships with different global superpowers, the legacy of Chinese investors in the country remains significant. Fosun, led by billionaire Guo Guangchang, continues to be a major Chinese investor in Portugal. Despite challenges, golden visa investments have brought changes to Portugal, including major developments in areas like Cascais.

As the landscape evolves, the future of Chinese investment in Portugal will likely reflect broader shifts in global dynamics and priorities.

Source: Bloomberg

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