Top advantages of investing in fund for your Golden Visa
The Golden Visa citizenship has become extremely popular in the last several years, as it offers a unique opportunity for rich foreign individuals to obtain a residency or citizenship status by investment. The investment itself is not defined particularly, most people purchase an estate, while in the recent past, investing in funds has become a rather more favored choice. Funds offer better financial strategies as opposed to estates and there are numerous advantages; you can learn all about them in the text below.
The difference between a fund and an estate purchase
First and foremost, the 2020 Coronavirus pandemic has drastically changed the global economy and especially the real estate market, for better or for worse. While in recent years the purchase of estates has been a lucrative opportunity for foreign nationals, the pandemic drastically changed the outlooks in favor of alternative investments, one of which is investing in a fund to obtain a Golden Visa rather than an estate. The restrictions imposed due to the pandemic made it especially hard to travel and take a closer look at the real estate market by potential buyers, a safe play, therefore, has been investing in funds. The idea offers lower entry fees, and 0% exit fees as opposed to the commissions required when purchasing an estate. Also, the overall maintenance cost has been drastically reduced as you’ll save money on hiring any rental agencies who would take care of the property in your absence. The result is the same, as you’ll obtain the visa in no time, with the waiting period being completely identical, 4 to 6 months tops, and after 5 years, you have the same chance to file for citizenship.
We said there are more financial strategies, meaning the fund gives you better maneuverability of assets, and you can invest in different companies which increases your chances of making a profit.
The versatility of a fund
The positive advantage of a fund is the numerous options available and all companies offering fund management are eligible and respected, meaning you can rest assured about the professionalism of each company. The choices are solely up to you, and you can go for several investment ideas. Some funds are investing in the industrial branches, agricultural branches, science, and even technological progress and discovery. You can stay certain as funds that qualify for Portuguese golden visa all possess an excellent reputation and the scope of investments broadens with each year. There are even non leveraged funds, focusing on the real estate market with premises of at least 3 to 5 % of annual return. The benefits of going for a fund are the lower costs of the previously mentioned maintenance and the lack of responsibility you have. Because your assets are out in the open with tangible attributes, the expense of maintaining and retaining them rises with time. You have fewer responsibilities with funds and investments in several economic branches, which gives you freedom and more opportunities.
You can always back down
With funds, there is still the option of liquidating all the assets and simply withdrawing after gaining the visa. Of course, the whole process does take some time as the investments are sometimes spread around several different companies. Do not worry, you can make sure to return the money you invested without a loss. Therefore, your profit is secure, and essentially it all comes down to the right timing.
With funds, the major advantage is avoiding higher tax rates, which usually follow the purchase of a property. The most common tax rate for real estate is around 6.5%, while funds have a lower rate and up to 0% tax for investors who are non-residents. The low tax rates and the low maintenance, as well as the overall fees of entry and exit commissions, make it a lucrative opportunity to invest in funds and make sure to spread the wealth across several lucrative companies and potential business opportunities.
All in all, the general advantages of fund investments as opposed to the property are more than obvious, with properties requiring maintenance and higher taxes. Though you have complete authority of the property and can sell it at a profit at any given moment, the fund’s investments might take some time to cash in, but eventually, you gain the same but with fewer responsibilities. Also, there is more than one fund management company out here and you can choose from a variety of available ones, and make sure your money goes to the right places.
The advantage is also the possibility of doing almost 90% of the work remotely, not requiring your physical presence except the one interview where you give your data, photo, and fingerprints. Everything else can be taken care of without you moving a finger.