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Category: Investment

  • Portugal Golden Visa Latest Update

    On Portugal local time July 6, 2023, the special commission created for the analysis and preparation of the final draft of the “Mais Habitação” law approved the bill to be presented to Parliament.

    Despite the proposals presented by all parties to keep some options of investment, including the one initially presented by the government itself, the final draft does not contemplate the continuity of the ARI regime. Therefore, the present draft states that no applications will be admitted following the entering into force of the new law.

    Notwithstanding, there is relevant good news:

    • it was made clear that all applications submitted until the entering into force of the new law will be fully processed, and renewal rights will be fully assured;
    • The analysis of all files submitted up until the entering into force of any amends will follow all existing rules and regulations;
    • No changes will be implemented to the law regarding the adding of family members, which means that family reunification will still be possible after the changes are implemented
    • No changes were added regarding the access to citizenship and permanent residency were included.

    Regarding the timeline, we believe that the Parliament will vote on the current law up until July 19th, 2023.

    The final step of the process, if the current document is approved by the Parliament, will be sending the proposed shall be proposed bill to the President of the Republic.

    There is no way to determine how the President of the Republic will respond to the diploma, but three scenarios may take place:

    1.  Direct ratification and in this case, the proposal will come into force on the date set forth in the proposal.
    2. The President of the Republic does not accept the proposal as it is, and returns it to the Parliament for revision; or
    3. The President of the Republic does not issue an opinion on the document but requests its evaluation by the Constitutional Court.

    In any case, it is not reasonable to expect that, even if option i) takes place – direct ratification, the law comes into force before the middle/end of September. Our assumption is based both on the complexity of the package – which will require extensive analysis, and the current holiday period, which will for sure add time to the current process.

    Our advice to all our clients is to move forward as soon as possible with their investments. We believe the current timelines will fully allow investors to start and submit their process before the potential end of the Golden Visa program.

    In this sense, we must make our investors aware that the current average time to conclude the investment, with IAS, is around one week, which – under current timing, provides enough time to still invest and be part of the Portuguese investment program.

    We will continue to monitor the situation as closely as possible, keeping investors and partners informed of any developments while remaining available for any clarifications needed.

  • Portugal PUBLIC DISCUSSION | RECENT NEWS

    31 March 2023

    Yesterday, PM António Costa made an announcement regarding the proposal “Mais Habitação” that will be submitted to the Parliament within the next few days.

    Despite the wording and a few changes in the message, the situation remains the same as was presented on February 16th, 2023. In that sense, the government continues to manifest its intention to end the Golden Visa program. However, this time around, the PM clearly stated that the decision on this matter should be taken by the Parliament and by The President of the Republic.

    On a related matter, one of the proposals presented by the PM mentioned the possibility of converting the current applications in the program to general immigration law – since the GV program is deemed as a special law. Such a position also aligns with the Government’s insistence on attributing a retroactive effect to this matter. Regarding this topic, and after a careful analysis within our team, pairs, and academic professors of Law, we believe that it will not be possible to sustain since it shows clear violations of constitutional principles, namely the principle of Trust in the State.

    Despite the above-mentioned intentions, and as explained in our previous articles, the Government has no legislative power regarding this matter, since the Parliament is the only entity that can approve and introduce the changes that the government wants to put into action. This means that the current version of the immigration law allowing GV investors is still in force and was not changed. SEF is clearly complying with applicable law since it is accepting and processing new applications normally. Moreover, we confirmed directly with SEF yesterday, and no instructions were received to close the ARI portal or interrupt or condition the acceptance of the normal flow of submissions. Moreover, such instructions can only be lawfully given upon a duly approved law by the Parliament and the President of the Republic.

    As a final note, we would like to address some speculations that we have been receiving regarding applications submitted after February 16th2023. It came to our knowledge that a rumor has been spread mentioning that applications submitted after the D date have yet to be granted a processing number/application number. At IAS, we can assure all investors that we verified our clients that have been submitted after that date and all applications have a processing number/application number, and their applications are being processed normally.

    The analysis included above is always preliminary and subject to be complemented by the analysis of the draft of the law presented yesterday.

    Finally, we do not anticipate that there will be any discussions on this matter in Parliament before the last week of April, taking into consideration the current schedule the Parliament presented on Thursday.

    We will continue to monitor the situation as closely as possible, keeping investors and partners informed of any developments while remaining available for any clarifications needed.

    Thank you for your attention to this matter.

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  • GOLDEN VISA PROGRAM | INFORMATION ON COUNCIL OF MINISTERS

    31 March 2023

    Dear Investors and Partners,

    Following our previous communication on March 5th, Mercan Properties participated in the public hearing during the last weeks, alongside the municipalities and other entities, to portray the benefits of the ARI program and submitted its memorandum for public consultation as well as other developers, associations, law firms, lawmakers, political parties, and other relevant stakeholders contributed to the extensive public consultation.

    At the Meeting of the Council of Ministers held yesterday, the Prime Minister (PM) António Costa presented the PowerPoint version of the final proposal on housing reforms to the public that will be sent to the Parliament for debate.

    The PM mentioned that Portugal is and will continue to be open to foreign investment; however, the PM indicated that the proposal presented maintains the initial position about the GV program, namely its termination. However, the PM also said that “the end of the Gold Visas depends on the Parliament and the promulgation of the President of the Republic.”

    The current law continues in place, and the portal for the SEF portal submission of applications continues to be opened. Regarding the bill proposal, there were no references to special conditions for renewing permits based on real estate investment under the current draft presented, which was included in the initial draft. In any case, the Government kept in the proposal,  the issue of the retroactive effect of the law to be approved,  and announced that it intends to submit all existing applications under the general regime for authorization permits.

    Given that the proposal was not made available – only the PowerPoint document used in the presentation by PM, there is no way of determining precisely what the proposal entails. In any case, the Government has been evident in stating that this is an initial proposal and that in the Parliament, both in the general session´s discussions and within the respective specific committees, there will be the possibility to debate and, eventually, amend the proposed solutions.

    When questioned about the date of entering into force the amendments, the Prime Minister directed the topic to the Parliament´s agenda and procedures.

    Regarding the following steps, we believe the path ahead will be as follows:

    • Considering the discussion in the Parliament’s general session, followed by the analysis in the respective specific committee and the final vote, a minimum of two months may be needed to complete this step.
    • Finally, the law will be submitted to the President of the Republic, who has 20 days to ratify, veto, or send the document to the Constitutional Court.

    Moreover, we are focused on making every effort to engage the Portuguese government in fulfilling the commitments which concern the ARI Program.

    Mercan Properties can assess and reassure its investors, that numerous Members of the Parliament and Members of the Cabinet are in favor of several amendments to the proposal on housing reforms and that the President of the Portuguese Republic, Marcelo Rebelo de Sousa, has already announced he will follow closely all matters that can be invoked regarding the constitutionality of the proposal.

    Furthermore, we reinforce that the projects developed by Mercan Properties remain available for investments and that investor applications continue to be submitted at SEF without any changes to the standard golden visa process. We will continue to issue a side letter covering potential liabilities for the investor arising from the current legislative moment as a solid guarantee from Mercan Properties.

    Mercan Properties will continue to follow this matter closely and provide full support and information on the current discussion and decisions.

    We are available to clarify and expand on any of the matters outlined.

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  • GOLDEN VISA PROGRAM | INFORMATION ON PRELIMINARY DRAFT PROPOSAL

    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.

    Next Steps:

    • 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:

    1. The coming into force of any potential amendments to the ARI program – namely its termination;
    2. 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.