Eternity Law International — News — Investment fund in Portugal

Investment fund in Portugal

Published:
August 5, 2024

Structures such as Portugal investment funds are financial companies whose main goal is to increase investors’ capital. In this jurisdiction, their activities are regulated by the Securities Market Commission (CMVM). The minimum investment amount to participate in the commercial program for obtaining a residence permit in Portugal is 500,000 euros. In 2021, the minimum amount was reduced to 350,000 euros. Entrepreneurs can return their investments in 6-8 years, depending on the fund’s strategy. However, it is necessary to take into account that some funds may have their own conditions for return periods.

Our company is first-class experts in the field of launching and licensing businesses. We work all over the world to achieve the most effective results for our clients. Our lawyers will provide you with comprehensive consulting and practical assistance in obtaining a license for an investment fund in any jurisdiction around the world.

Portugal investment regulations: types, functioning and profitability

The return on funds can reach up to 10% per annum. If we talk about those entrepreneurs who intend to implement Portugal fund registration not only for commercial purposes, it should be noted that the main goal of participants in the residence permit program is to obtain resident status. At the same time, the correct choice of the organizational form of the fund can generate additional income, which is a pleasant bonus.

Portugal fund management: directions for investing funds

Residential properties

  1. Description: the fund invests in residential real estate at various stages of construction and subsequent resale. Objects are often used in the initial and final stages of construction.
  2. Strategy: purchasing properties for resale at a premium and partially investing in developer bonds to ensure a stable income of 3%.
  3. Advantages: the ability to generate income both from rent and from the increase in the value of real estate.

Commercial real estate

  1. Description: The fund manages a portfolio of 15 commercial real estate properties. All properties have long-term tenants.
  2. Strategy: rental income is distributed among investors in the form of dividends. Properties with fixed long-term rental contracts are often used.
  3. Advantages: stable rental income, high quality properties and long-term contracts.

Commercial organizations

  1. Description: The fund invests in companies or shares in companies operating in the clean energy sector.
  2. Strategy: 45% of the fund’s capital comes from public investment, 55% from private investors. The yield can reach 12% per annum, but payments are made upon completion of the fund’s life.
  3. Advantages: investments in promising and sustainable industries with high growth potential.

Starting a fund in Portugal: the procedure for obtaining a residence permit through opening a fund

Our experts will help you choose a fund that suits your investment goals and preferences. We provide detailed advice on the characteristics of various funds and their investment strategies. In addition, we also have many options for ready-made businesses, in particular, we can offer you an alternative investment fund for sale in the Czech Republic and much more.

  1. We will ensure the collection and execution of all necessary documents for applying for a residence permit, including information about the fund and your investments.
  2. We will help you prepare the reporting and financial documents required for submission.
  3. We will help you register with the Portuguese tax office and obtain a taxpayer number.
  4. Providing support in opening a bank account and other financial procedures related to investments.
  5. Assistance in opening a bank account and purchasing investment fund shares in the amount of EUR 500,000 or more.
  6. Ensuring proper purchase of fund shares and monitoring the fulfillment of all investment obligations.

To participate in the Portuguese residence permit program, an investment of at least 500,000 euros in investment fund Portugal is required. Previously, until the end of 2021, the minimum amount was 350,000 euros. The choice of fund should be based on a carefully thought-out investment strategy and the reliability of the fund. Our company provides advice on choosing the right fund to suit your investment goals and requirements.

  1. After making the investment, our company’s lawyers submit an application for a residence permit to the Portuguese Migration Service. Participation in the program is only possible through a licensed agent such as us to ensure compliance with all legal and administrative requirements.
  2. Our lawyers will help you collect and prepare all the necessary documents to apply for a residence permit.
  3. The investor must register with the Portuguese tax office, obtain a tax number and open a bank account.
  4. After this, you need to deposit funds into an open account to purchase investment fund shares in the amount of 500,000 euros or more. We will help you through this process, providing full guidance and support.

Benefits of Portugal investment funds

  1. Reduced costs: investment funds manage capital, which allows the investor to reduce the cost of asset management.
  2. Investments are subject to the following fees and charges: An entry fee, which is often added to the total investment amount. Annual capital management fee ranging from 1% to 2% of total capital. Commission for the completed work of the fund, ranging from 10% to 30% of the profit after the sale of assets.
  3. Tax optimization: the possibility of reducing the tax burden or complete exemption from income tax.
  4. Minimizing risks: IFs distribute capital between various projects, which reduces risks: some projects can bring losses, while others can bring significant profits. The Funds may sell assets within 1-3 years if market conditions are unfavorable, which could reduce profits or result in losses.

If you intend to implement Portugal fund administration, you should consider the following risks.

  1. The investor risks only the amount of capital invested and is not responsible for the financial obligations of the fund.
  2. There is no complete guarantee of regular profits and return of capital within a specified period. Investment funds may sell assets when market conditions are unfavorable, affecting returns.
  3. It is recommended to choose funds certified by the Portuguese Securities Market Commission.

Our company analyzes and provides a list of the most reliable Portuguese investment funds, helping to choose the optimal conditions for investments.

Portugal investment fund taxation

  1. 21% in mainland Portugal.
  2. 20% in the Autonomous Region of Madeira.
  3. 16.8% in the Autonomous Region of the Azores.

Rates for small and medium enterprises:

  • 17% on the first 25,000 euros of income.

Rates for companies without a registered office in Portugal are 25% on all income except:

  • 35% for prizes from drawings, lotteries and competitions;
  • 35% for income from unidentified accounts;
  • 35% for income from companies registered in countries with more favorable tax schemes.

If you are considering the possibility of obtaining a residence permit through investment in an individual fund and the option of Portugal fund setup, our company’s specialists offer full support and professional assistance at every stage of the process. We will help you choose the optimal investment fund, ensure correct paperwork and support during registration with tax authorities and banking institutions. We are also ready to comprehensively assist you in establishing an investment fund in SVG, in Spain, Latvia and other countries.

Our experts have deep knowledge and experience working with investment funds in Portugal and are ready to offer you the most favorable conditions for obtaining a residence permit and successful investments. Contact us for detailed advice and an effective solution to your investment problems.

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