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How Portugal is giving Chinese investors a taste of the Med lifestyle

The country has one of the more accessible golden visa schemes in Europe
Trams in Lisbon. ESB Professional/Shutterstock[/caption]

From knockoffs of Mediterranean towns, the Chinese now have the wherewithal to flock en masse to western Europe for the originals. Several European Union countries are bandying citizenship to investors in exchange for salves to their convalescing economies: real estate purchases, equity in domestic companies, and government bonds.

Portugal’s own citizenship-by-investment scheme has lured EUR2.4 billion (USD2.6 billion) in investments since it was launched in 2012. The scheme generated an 87.5 percent year-on-year upswing in investments to EUR874 million in 2016 alone.

Portugal’s program is mirrored all across Europe, including nations rocked by the sovereign debt crises of recent years.

“In the past, it was up to the entrepreneur to invite or lure the investors,” remarked Liana Toumazou, Royal Institution of Chartered Surveyors (RICS) country manager for Portugal and Greece. “Now it’s been done at the level of the government, because they realise that this is the way they get money into the country, money which we don’t have.”

[caption id="attachment_61928" align="aligncenter" width="1000"] Lisbon's Museum of Art, Architecture and Technology (MAAT), opened 2016. StockPhotosArt/Shutterstock[/caption]

The Chinese has made up the largest proportion of golden visa applicants to date. Chinese investors have secured 3,050 Portuguese golden visas, compared with 247 visas for Brazilian applicants, 148 for Russians, 137 for South Africans, and 72 for Lebanese.

Portugal has always been one of the more accessible of the European countries offering such routes to citizenship. For as little as EUR350,000, Asian investors can secure permanent residency and benefit from Schengen-free access to most European countries.

Not that investors have any reason to just use Portugal as a transit point — the country is a great prospect for retirement, with one of the lowest living costs in western Europe. The average price of local goods in the country is 12.2 percent and 19.4 percent cheaper than in the UK and France, respectively, according to Chinese property portal Juwai.com, citing Global Property Guide.

More: Cyprus offers Thai property investors EU citizenship

“Everybody welcomes everybody in Portugal,” claimed Ideal Homes Portugal listings manager Caroline Roseblade. “The locals have no problem at all, no matter what nationality. There has been no problem with any nationality."

According to Roseblade, rental yields for foreign purchases hover at anywhere around 5 to 10 percent, a high value proposition to Asian investors needing to be away for months on grand European treks.

Apart from the Chinese, the most demand for Portuguese homes come from Sweden, Mexcio, the US, and the UK, Roseblade said.

However, Portugal needs to keep up with the demand for these visas and expedite their issuance to investors. “[Speed] is a problem that needs to be solved,” according to David Machado, founder of PTGoldenVisa.com. “The government has all the good intentions but it’s not delivering. The number of people that process these and the speed with which they process the visas…It’s becoming too slow.”

Residential properties in Portugal were valued at EUR1,106 per square metre on average in January, a month-on-month increase of 0.5 percent, according to the National Statistics Institute (INE).

“You’d want to invest in an economy which is on the rise,” said Toumazou. “You’d want to goinvest somewhere with a little bt of uncertainty to make it a little bit cheaper. This is how investors work.”

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