Buying Commercial Property for Portugal's Golden Visa

Updated: March 30, 2023

The Portugal Golden Visa has established itself as one of the most popular investment schemes of its kind since it was launched in 2012. The residency by investment program provides investors with the opportunity to secure residency in Portugal in return for a qualifying investment. While there are location restrictions for residential real estate investments that qualify for the program, there are no location requirements when it comes to buying commercial property for Portugal’s Golden Visa – a significant advantage of this investment option.

In this article, we are going to delve into the options for making a commercial real estate investment for the Portugal Golden Visa.

Important note: The Portugal Golden Visa is coming to an end. If you are interested in applying for the Golden Visa program, we strongly recommend you begin your application now.

You can consult our article on the Golden Visa ending to stay updated.

The Portugal Golden Visa

The Portugal Golden Visa has generated more than €6.8 billion since its launch in 2012. This is a testament to the popularity of the program. Investors from the world over have invested in the country in return for a residency permit and a whole host of benefits.

Significant advantages of the Golden Visa program include a short-stay requirement, the ability to live in a stunning Mediterranean country with a high quality of life, significant tax advantages for foreign investors, and the fact that you can include your family members in the application. Portugal is also ranked as the sixth most peaceful country in the world, according to the 2022 Global Peace Index, and has progressive legislation, other crucial factors why individuals worldwide are flocking to Portugal.

What’s more, it is also possible to obtain permanent residency and Portuguese citizenship after five years. To secure Portuguese citizenship, you will need to maintain your investment for five years and fulfill all the requirements under Portuguese nationality law, including taking a basic Portuguese language test and having a clean criminal record. With visa-free access or visa-on-arrival to 172 countries and the ability to live, work, and study in a European Union (EU) country, holding a Portuguese passport has a lot of perks.

You can read our article about all the benefits of the Golden Visa program, the investment options, Golden Visa requirements, and a step-by-step guide to the process: Portugal Golden Visa: Your Ultimate Guide 2023.

As we’ve mentioned, the Portugal Golden Visa is coming to an end. We highly recommend that you begin your application now if you are interested in the program.

Buying Commercial Property for Portugal’s Golden Visa

The most popular route is the Golden Visa real estate pathway, which accounts for more than 90 percent of investments for the program. However, there are various options, including investment funds, job creation, and capital transfer.

When it comes to residential property, changes to the program in January 2022 restricted qualifying properties to designated interior areas. However, there are no such restrictions for commercial properties, making it an excellent – and lucrative – investment opportunity.

For both commercial and residential property, a 20 percent discount applies if the property is located in a low-density area.

You can read our article on low-density and interior areas for more information on the topic.

Commercial real estate as a whole includes businesses, retail, and offices. Under the bracket of commercial property, you also have tourism real estate, which could be an excellent option for investors – particularly in Portugal, where tourism is a cornerstone of the economy. Tourism real estate refers to properties related to hospitality, such as service apartments, condominium resorts, and hotel projects.

Regarding tourism real estate, you need to comply with the Tourism of Portugal, which regulates the tourism market.

To qualify for commercial real estate, including tourism real estate, you will need to invest €500,000 in commercial real estate or €350,000 if investing in a rehabilitation project.

Hotel Investment Schemes

Hotel investment schemes include projects in the hospitality sector. For example, turning a palace into a boutique hotel, creating an eco-friendly hotel, or doing up a run-down building to provide a place for tourists to stay.

This option provides investors with the ability to co-invest – provided they meet the qualifying investment (€500,000 in commercial real estate or €350,000 if investing in a rehabilitation project). The mindset of hotel investment schemes is often owning a piece of the real estate, a fraction of the whole unit, as opposed to owning the whole property.

It is important to do extra due diligence and proceed with the help of experienced lawyers to ensure that everything is in order.

Hotel projects are also often hands-off, which can be both an advantage and a disadvantage. You may not have such a voice in how things proceed, but at the same time, you will not have to be directly managing the project. Another disadvantage of hotel projects is that they are not free-hold, and you cannot liquidate your investment. If you work with other investors on the project, important decisions will also depend on their input.

Rental Properties

The key difference between commercial and residential properties is that commercial properties are born to serve as business opportunities.

For example, an Airbnb can be a residential property you want to rent for part of the year to generate income. For example, you can go to the city hall and request a license to run an Airbnb. For commercial real estate, the mindset behind buying the property is almost exclusively to generate income. The examples below will provide you with further clarification on the topic.

Serviced apartments

Properties such as serviced apartments are strictly commercial and are an option for those with no intention to live in the property. Buying a property to rent out to a student in student dormitories would be an example. With this said, there can be some blurring of the lines when it comes to whether a property that you intend to rent out is commercial or residential. We recommend speaking with an experienced lawyer or experienced expert in the field who will be able to advise you on the matter.

When it comes to serviced apartments, you can buy the property as a whole or a unit – for example, a set of student apartments or just one unit and the size of serviced apartments will vary from place to place. However, it is more common to have smaller properties (such as studios and one-bedroom apartments).

Properties with serviced apartments are often designed with students in mind – or, increasingly, digital nomads looking for co-living spaces – and will have a living space, kitchen, common areas, working areas, etc.). An example is student accommodation for universities. Apartments will range in size, but it is more common to find smaller properties available on the market.

Most serviced apartments are located in bigger cities, such as Lisbon and Porto, but also in university cities, such as Aveiro and Coimbra. You will also find rental properties and serviced apartments that cater to tourists in tourist hotspots, such as the Algarve.

Pros of serviced apartments

There is a high demand for both students and tourists in Portugal
Some serviced apartments and rental properties will have high flexibility in how much you can use the property, but this will vary. This is also a con of this investment type.

Cons of serviced apartments

Some serviced apartments and rental properties will have low flexibility in how much you can use the property, but this will vary. This is also a pro of this Portugal property investment type.
You will need to keep up to speed with the operator regarding the regulations in place.

Condominium Resorts

For condominium resorts – also referred to as condominium infrastructure, such as golf resorts – you will need to buy a unit or share of the whole asset. There will be apartments that are designated for living, but also facilities, such as pools and clubhouses, for communal use.

To provide you with a clear example, Pestana is a hotel and resort operator. For their resorts, they keep the gardens in order, make sure the swimming pools are treated, that there is a level of security, and there is a cleaning service at the resort. There will be people living at the resort or renting the apartment out. It is these apartments that investors can invest in and rent out.

The main difference between commercial and residential is that serviced properties need to have a contract with the operator, such as a management company, and they will take a share of the rental revenue.

When it comes to the size of condominium resorts, they are usually bigger than serviced apartments and can be from one-bedroom up to three-to-four-bedroom apartments.

Pros of Condominium resorts:

The flexibility of use: As long as you pay condominium fees (higher than in other properties), you can use it the entire year. This will, however, depend from place to place, and we recommend getting expert assistance to ensure that this commercial property qualifies for the Portugal Golden Visa.
Maintenance throughout the year: You will not need to worry about ensuring that there is a cleaning service or that the swimming pool is taken care of. These will be maintained by the management company.

Cons of condominium resorts:

Lack of independence in managing the property yourself: You rely on the management company (such as Pestana) and cannot make significant changes, such as on the interior of the property, although this can vary from place to place. Usually, there will need to be a similarity between the rental units.

Where are the best locations to buy commercial real estate?

Some of the best places for locations to make a commercial real estate investment are the following:

Algarve – Condominium, serviced apartments, hotel projects

Lisbon – Serviced apartments, hotel projects

Porto – Serviced apartments, hotel projects

Low-density commercial properties

Tourism in low-density areas, such as Peneda Gerês, Aljezur, Douro Valley, and Alentejo, where you will qualify for a 20 percent discount on your investment, are good options to consider. These areas are likely going to increase in popularity with tourists in the coming years, so it could be an excellent investment opportunity to buy residential or commercial real estate. Note that residential property must also be located in an interior area.

Peneda-Gerês, the Douro Valley, and Alentejo are pristine low-density areas for investment in Portugal that are becoming increasingly popular with tourists.

Gerês is one of the favorite regions for investors due to its dense and wonderful Peneda Gerês National Park. It is an incredible place. The famous waterfalls are paradisiacal and a rarity in Europe.

Classified as a World Heritage Site by UNESCO, the Douro Region is one of the most acclaimed areas in the world due to its untouched natural landscapes.

Goldcrest: Who We Are and How We Can Help You

Buying commercial property is an excellent option for investors, and there are many investment options on the table. Also, placing your money in brick-and-mortar is always of value, and investing in real estate is an intelligent investment option.

Goldcrest is a local buyer’s agent that provides insightful real estate expertise and strategic advice. From sourcing to property acquisition, we offer a tailor-made service for our clients, assisting them in identifying outstanding investment opportunities in some of Portugal’s finest locations, from relocation to investment projects.

If you are interested in applying for the Golden Visa scheme, we recommend that you begin your Golden Visa application now and get in touch with us to discuss your real estate investment, as the program is coming to an end.

The following articles may be of interest to you:

Buying Commercial Property for Portugal’s Golden Visa: An Overview