500k investment fund – the new trend

The €500.000 investment into private equity or venture capital fund is the new trend into the investors seeking the Portugal Golden Visa (500k invesment fund).

The urgency of having a second passport at a time when most of the investments that can be used to obtain a Golden Visa require some physical/presential intervention by the investor has increased their interest in alternatives in which their intervention is not necessary.

Within this panorama, the interest in transferring capital in the amount of 500 thousand euros (500k investment fund) or more for the acquisition of units in investment funds or venture capital has raised.

The growing interest of investors has several reasons:

• Investors are familiar with this form of investment. They feel more secure in acquiring shares in investment funds because the rules for this type of investment are internationally similar and there are no substantial discrepancies;
• Funds they are dealing with are regulated by the Securities Commission (CMVM) and that they have to go through an extensive bureaucratic process until they are fully constituted. Regulatory scrutiny makes them feel secure about the seriousness of the players;
• Unlike the other investment options available of equal value (350 thousand euros), this option does not require prior knowledge of the market or certain sectors of activity in Portugal.
• The speed of investment is often pointed out by investors as one of the main advantages.
• It entails the payment of less tax than other investment options.

Due to the announced closure of the real estate options in Lisbon and Porto, predicted for 2021, many investors are demanding investment into units of investment funds, which are becoming very popular.

The law says on the invesmtment option 7:

vii. Capital transfer of the amount of 500 thousand Euros, or higher, for the acquisition of units of investment funds or venture capital fund of funds dedicated to the capitalisation of companies, capital injected under the Portuguese legislation, whose maturity, at the moment of the investment, is, at least, of five years and, at least, 60% of the investments is realized in commercial companies with head office in national territory;

One of the advantages is the fastness of boarding in (selection of the property phase can delay investors for a month or two) and the diversification factor.

These funds are also focused on real estate and many of them hold participations in real estate in Lisbon and Porto, so indirectly the investors can still expose their capital to the two main cities’ real estate market, which is expected to continue to grow.

Then the minimum investment is safely transfered to one of the elegible funds offered on the market.

Aplicants can select between several offers and choose the investment strategy that best match their risk profile.

Some of them prefer real estate, others venture capital.

Many consider this a safer investment than real estate itself.

There is more potential of gains and less intervention needed comprared with managing a property or the low interest rate offered by the deposit on the 1500000 euros.

It is expected that in 2021 more offers on investment funds will become available on the market to reach the portuguese golden visa, opening more investment alternatives and increasing the investors range of options.

It is also expected that this offers open different sources of investment by making it possible for the small investor to be able to participate in larger scale projects or finance small IT companies with big potential (some enrolled on the cloud and big data).

Consult us for more information on the 500 k investment funds available and the way to proceed to the portugal golden visa program.

Examples of companies marketing eligible funds:

https://www.lynxassetmanagers.com/

https://www.bluecrowcapital.com/

http://www.lince-capital.com/en/investors

https://www.sifportugal.com/

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