Portugal: the advantages of investing in funds
When the local government decided to eliminate real estate purchases as an investment option for the Golden Visa, many believed that, in practice, this meant the end of the program. But figures from various specialized websites show that interest in it is far from waning.
Thus, in 2019 only 7 Golden Visa applicants were investing in funds. This number has increased significantly in recent years, reaching 352 by September 2023, demonstrating the potential of this investment option.
What is meant by an investment fund?
In Chile, the Commission for the Financial Market The CMF defines investment funds as “an asset pool comprised of contributions from individuals and legal entities, known as contributors.” It can also be described as a financial services company whose mission is to attract investors and increase capital.
The fund pools money from contributors and invests it in selected assets, which are generally stocks, debt, real estate, and private equity (investment in private companies, which are not listed on the stock exchange).
In Portugal, some terms are used differently. For example, despite its name, the “Fundo de Capital de Risco” (FCR) is equivalent to a private equity fund. The same applies to the “Sociedade de Capital de Risco” (SCR), which is a venture capital fund (a form of private equity, awarded to small companies with high growth potential in their early stages).
What are the advantages of investing in funds?
If the goal is the Golden Visa, the main attraction of investing in funds is that it allows the applicant to obtain a predictable profit of 3 to 10% annually, and a total return on investment in 5 to 10 years.
Another significant advantage is professional management. When investing in a fund, your capital is managed by financial experts with in-depth knowledge of the Portuguese market. This not only reduces the inherent risk of investing but also saves time and effort for the investor, who doesn't need to be involved in the day-to-day management of the investment. Furthermore, many funds are designed to maximize returns and minimize risks, providing a safer and more structured investment strategy.
Diversification is also a key factor. Funds in Portugal typically consist of a mix of assets, allowing investors to reduce their exposure to specific risks. This diversified approach is particularly attractive in an uncertain global economic environment, where capital protection is essential.
Portugal also offers a favorable tax environment for foreign investors. Although the country has capital gains taxes, there are mechanisms and double taxation treaties that can significantly reduce the tax burden, depending on the investor's jurisdiction.
Finally, Portugal is a country with a stable and growing economy and a government that actively supports foreign investment. Legal security, quality of life, and the possibility of obtaining residency in a European country are factors that increase the attractiveness of investing in funds in Portugal.
At AIM Global, we have offices in Lisbon and a team of professionals with extensive knowledge of the local financial environment. We can help you find a fund that suits both your investor profile and your interests and needs.
Schedule a meeting with us now. to begin making your international mobility project a reality. We'll guide you through every step of the way.
