Portugal’s much trumpeted Golden Visa programme is close to a standstill as 4,000 non-EC investors sit and wait for news of their applications.
At the current rate of progress, the backlog will take five years to clear after the Operation Labyrinth investigation into corruption and money laundering saw 11 people arrested and stricter rules put in place.
The Minister for Internal Administration, Miguel Macedo, stepped down while denying any wrongdoing. He later was arrested.
The Golden Visa programme was introduced by former deputy PM Paulo Portas to boost Portugal’s high end property market during the years of crisis and austerity but his promise of a permit within 90 days of submitting the necessary documentation has been ignored on an epic scale.
Almost 80% of the 2,788 golden visas issued since the scheme started in 2012 have gone to Chinese applicants.
Interviewed for Bloomberg, visa applicant Sharon Chang commented “I know hundreds of Chinese like myself that have been waiting for than a year to get a visa to live in Portugal,” said Chan who paid €530,000 for three properties in Lisbon back in 2014.
The 38-year-old businesswoman and her 5-year-old have had to fly back to China every three months to get their temporary entry permits renewed to avoid becoming illegal residents.
The Ministry of Internal Affairs under which the scheme is operating, blamed the delays on the increased security and has not increased staffing levels to cope with demand.
“The Immigration and Borders Service (SEF) scrupulously ensures compliance with the law in terms of the issuance of residence permits for investment activities,” said Marilia Neres from SEF.
Many investors are getting desperate, according to Lily Liu, who leads a group of 251 Chinese property buyers in Portugal whose applications are somewhere in the pipeline.
Li said she had expected to get her visa in a couple of months and made plans for her family to join her. She bought a €50,000 Volvo estate and enrolled her daughter and grandson at two private schools, paying €12,000 up front.
Two years later, Li has no idea at all where her application is and is prohibited even from driving her Volvo as her driving license is not valid without a resident permit, “Now I just want to sell my house, go back to China and forget that this ever happened.”
The problem is hitting business investment too as the managers of Level Constellation, a Chinese real estate company based in Lisbon, say the company may reconsider plans to invest up to €500 million in real estate if these delays aren’t resolved soon.
The head of Level Constellation in Portugal, Pedro Vincente, talking to Bloomberg said that “It’s not right to sell an apartment to a Chinese citizen and promise a resident permit when we don’t know if they will be able to get a visa. If the delays persist we may switch our investment plans to other cities such as Madrid or Barcelona.”
The programme clearly has boosted high end property sales to the benefit of agencies in this sector but there are now Chinese mutterings of mis-selling as applicants' lives are mucked around and promises remain unfulfilled.
Portugal's Golden Visa programme also has been criticised for favouring already rich foreigners over hard-pressed domestic taxpayers with the government's answer an unswerving yet rather grubby - "other countries are offering similar and we don't want to lose out."
