Investment funds have become the primary route to the Portuguese Golden Visa. And although many investors prefer to acquire more tangible assets by opting for other programs, innovation has arrived in the Portuguese market, sparking interest in the possibility that cryptocurrencies could be included in the eligible categories for this program.
In this blog, we’ll discuss some concepts on the topic, including the advantages and disadvantages of investing in this novel but still controversial market.
What are cryptocurrencies?
The RAE defines cryptocurrencies as “a virtual currency managed by a decentralized network of computers that uses encryption to secure transactions between users.”
What advantages do they offer to investors?
In general terms, those who support cryptocurrencies highlight three key aspects: Decentralization, which allows for more autonomy and protection against inflation; Global Access for anyone with an internet connection, enabling investment without the usual restrictions of traditional financial systems; and Technological Innovation. This is because the technology behind cryptocurrencies, called Blockchain (which allows secure information storage), can have applications beyond finance: in supply chains, smart contracts, among other aspects.
An important point is that crypto allows investors to diversify their portfolios as they are not tied to traditional markets. Currencies like Bitcoin and Ethereum have shown exponential growth over the last decade despite their volatility, and many investors see them as an opportunity with high potential returns.
Another key advantage is the flexibility and speed that cryptocurrencies offer compared to other assets. Bitcoin transactions can be carried out quickly and securely.
Portugal and Cryptocurrencies
Portugal has taken a relatively favorable stance toward cryptocurrencies. The country has hosted various events on the topic, such as conferences on Ethereum and NFTs, and there is an active community around the subject. In 2022, 12% of the population invested in virtual currencies, according to figures from the World Economic Forum.
However, global regulations on these assets are constantly evolving. Investors must consider the possibility that new laws or regulations could impact both their investment and their legal status within the Golden Visa program.
Market volatility is another factor that cannot be ignored. The prices of assets like Bitcoin and Ethereum can fluctuate dramatically over short periods. As specialized media point out, although the potential return is high, investors should be aware of the speculative nature of these assets and the associated risks.
Lastly, the infrastructure for cryptocurrency investment through specialized funds is still developing, and not all platforms or managers offer the experience or guarantees that traditional investors might expect. Selecting the right investment fund is crucial.
So far, only one investment fund (a private equity type), eligible for the Golden Visa in Portugal, has formally announced that it will include Bitcoin. The Portuguese regulator (Comissão do Mercado de Valores Mobiliários) has already authorized its operation.
However, when it comes to immigration procedures, such as the Golden Visa, operations will be supervised by the Agency for Integration, Migration, and Asylum (AIMA), which will review, on a case-by-case basis, whether the investments of that fund comply with the program’s requirements.
It is essential that those interested in this option conduct careful analysis and consult with experts to make informed decisions aligned with their residency and investment return goals.
At AIM Global, we have offices in Lisbon and a team of experts dedicated to analyzing the best options for your investor profile. We also understand that each case is unique, and we will accompany you throughout the entire Golden Visa application process.
Schedule a meeting with us and start making your dream of becoming a global citizen a reality today.
