A positive trend which have been accelerated more recently by the “Golden Visa” incentives.

What are the characteristics of the Portuguese investment fund market ? What are the golden visa opportunities attached to them? And lastly what are the challenges in term of sustainability strategy? SustainFunding decides to dig deeper into the subject.

I. Private Equity and Venture Capital funds in Portugal - Overview

According to Transactional Track Record (TTR), transactions in mergers and acquisitions (M&A), PE, VC continued to increase in Portugal, reaching 560 in 2021 up in volume (+32%) as well as in value (+2%).

Looking at M&A deals, the market remained dominated by the real estate (RE) and technology sectors.

If the RE sectors remained solid in 2021 with 86 disclosed transactions, note that the activity in the technology sector increased by 93 % with 110 transactions. A successful year for the tech sector, period during which as many as four new start ups achieved the status of unicorn: Feedzai, Remote, Sword Health, Anchorage Digital.

Looking at VC in particular, the top 3 active sectors in term of transaction were consequently the:

  • tech,
  • healthcare and,
  • financial ones.

As for PE, the top 3 active sectors were:

  • Glass, ceramic, paper, plastic, wood related companies
  • Distribution and retail
  • Healthcare

According to the Portuguese Securities Market Commission (CMVM), Portugal counts 62 private equity and venture capital companies managing a total of 222 regulated funds.

The main sectors covered are consequently, real estate, technology, healthcare, but also other industries or themes such as impact, thematic, investing in companies with positive impact on the environment or related to the education or the blue economy [1].

Looking in more details at each sectors:

In RE, the covered strategies include development projects or more conservative high end yielding assets. The sub sectors include residential, commercial, hospitality and infrastructure.

In Tech, industrial, impact, some focus on early stage companies often accompanied by the Portuguese Tax Incentive System for Business R&D, the so called SIFIDE II [2], others will invest in growth or buy out opportunities with an increasing number integrating sustainable considerations in their investment process.

Thus, the Portuguese PE and VC market have grown continuously over the past 10 years.

A positive trend which have been accelerated more recently by the “Golden Visa” incentive.

II. The Golden Visa implications

In the wake of the European debt crisis, Portugal decided to implement a series of measures dedicated to boost foreign investment and stimulate the economy.

One of these measures is the Residence by investment program – (ARI) [3], also known as “The Golden Visa Program”.

This program, which entered into force in October 2012, allows non-EU nationals that intend to invest in Portugal to apply for a temporary residence permit.

Although this measure already existed in other European countries, Portugal strategically decided to fix the minimum entry ticket at a relatively low level in comparison to European peers.

In exchange of an investment whose minimum level depends on its specific category, applicants can have the following benefits:

  • Access to the Schengen Zone;
  • apply for family reunification;
  • live, work and study in Portugal;
  • obtain permanent residence in Portugal and ultimately citizenship (after 5 years and 6 years; respectively) subject to certain terms and conditions.

Although the majority of investors used real estate property purchasing scheme, we are increasingly seeing alternative investment solutions due to new and recent restrictions in the real estate sector and also due to booming activity in key sectors such as the tech one.

One of these alternatives is indeed the golden visa via investment funds.

As defined by the SEF (Portuguese Border Authority), it implies a capital transfer of the amount of €500,000 for the acquisition of units of investment funds or venture capital funds of funds dedicated mainly to the capitalization of Portuguese companies (at least 60% of the investment) and for a minimum period of time (at least 5 years).

Compared to real estate investments, investment funds got advantages and disadvantages:

Disadvantages include:

  • Lack of control,
  • Minimum locking period and
  • Share of earnings due to the fund manager fees

However, they also have advantages such as:

  • Lower tax, avoiding the property tax, IMI, stamp duties, municipal tax,
  • Regulated market, registered Portugal fund is regulated by the CMVM,
  • Management delegation to professionals,
  • Continued exposure to RE of high density main cities of Portugal such as Lisbon and Porto (which have been excluded from the residential property investment scheme since 2022),
  • And diversification.

Interestingly, the measure allows applicants to distribute the €500,000 minimum investment between more than one fund allowing further diversification.

The Golden visa incentive via investment fund has thus strategically accompanied the PE and VC market growth; note that in parallel there have been multiple implications in term of sustainability.

III. Sustainable investing implication

The challenges are slightly different whether we are looking at Venture Capital or classical Private Equity funds, or if we are referring to Real Estate ones.

1. In PE and VC, the golden visa incentive has a positive impact for two main reasons.

  • Firstly, it allows to invest in local companies, boost growth and create local jobs.
  • Secondly, for funds who adopt a sustainable approach, it allows them to integrate Environmental, Social and Governance (ESG) and impact [4] considerations in their engagement policy early in the company’s life cycle.

This can be done for example by establishing a strong set of ESG KPI indicators or by setting important cultural values.

2. As for RE funds the challenges are different.

  • While the incentive might also contribute to higher growth and more job creation, some might argue that it can also inflate artificially real estate prices, pushing the working middle class away from the city centre.
  • On the other side, it gives the opportunity for funds to integrate, green building considerations in a sector whose impact on the environment is significant.

The construction and operation of buildings is responsible for approximately 40% of energy consumption and 36% of CO2 emissions in the EU with almost 75% of the building stock being currently energy inefficient. As result implementing a consistent sustainable strategy aligned with investors mandate and international recognised standards can improve significantly the investor risk reward profile while impacting positively the environment and the society. [5]

The sustainability aspect of an investment fund can be assessed looking at the sustainability investing approach used, the publication and monitoring of a sustainable policy and the subscription to internationally recognised standards or regulations.

If you would like to know more about investment funds in Portugal please contact us on



SustainFunding multidisciplinary team would be glad to assist you in the entire process, from the funds overview, strategies, terms, sustainability assessment to the potential golden visa legal implication and application.


[1] https://www.oecd.org/ocean/topics/ocean-economy/

[2] https://www.ani.pt/en/funding/fiscal-incentives/sifide/

[3] https://www.sef.pt/pt/pages/conteudo-detalhe.aspx?nID=62

[4] https://www.sustainfunding.com/insights-1

[5] https://www.linkedin.com/pulse/real-estate-investments-funds-rationale-adopting-strategy-abboud/