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Abstract(s)
This paper is a study of the impact of the Golden Visa, a special residence permit
for foreigners obtained through investment activity in Portuguese territory, in the
perspective of Tax Law and Tax Evasion, with special consideration for the structure of
Tax Havens, in order to understand if there is any connection between them and if so, what
can be done to limit it’s the negative consequences. At first sight, the Golden Visa program
has many advantages for the economy and even for real estate taxes, as it generates more
income for, at least, the real estate market. On the other hand, it does so by opening the
door to possible scenarios of Tax Evasion, considering that there is only a declarative
obligation from the taxpayer to register him or herself as a permanent resident, which
means that he or she will not be paying personal income taxes in the country.
Recently, investors have been opting for the use of investment funds, in order to
obtain a Golden visa and its advantages with significantly less investment capital.
These investment funds can be located in Tax Havens and I will try to analyze if
that is, at all, an issue because, even if the investment fund is based in a Tax Haven, the
investor who is attempting to obtain the Golden Visa will, nonetheless, have to invest in
property or equity in the Portuguese territory.
The creation of the Beneficial Owner Regime was, among other reasons, intended
to prevent investments made by certain persons through companies or any other entities,
where the identity of the ultimate investor is unknown and, as such, the new regime
prevents investments made through entities based in Tax Havens without the Portuguese
State being aware of it. It is now possible to track the exact origin of the investment, in a
broad sense.
There are concerns with the Golden Visa program, one of them being that the type
of investment attracted does not materialize into a system that allows the country to collect
personal income tax.
Ultimately, I believe that the Golden Visa program is a very smart way of attracting
foreign investment, in a scenario where it is much needed, while utilizing what Portugal
has best to offer, which is, its real estate and stable political and social environment.
Although the Golden Visa program is beneficial, it risks jeopardizing the international
economic image of the country, since that there is a risk of other countries considering
Portugal solely as a destination that sells European citizenships, in return for foreign
investment.
Description
Keywords
Golden visas Tax evasion Tax havens