Current Golden Visa investors are legally protected from retroactive rule changes
Current Golden Visa investors are legally protected from retroactive rule changes
If you invest prior to a new change in rules, you are constitutionally protected, the terms of your commitment remaining in place. No change. Furthermore -
- Announcements are not laws - This will take time, we wrote about the legislative process here
- No direct impact - The Golden Visa program wasn't specifically mentioned in the government's proposal
- It's not legal - Portugal and the European Court of Justice restrict retroactive application of law
Portugal cannot retroactively apply new Golden Visa conditions to prior investors for two key reasons:
1. Legal Certainty and Legitimate Expectations
The ECJ has established that the principles of legal certainty and the protection of legitimate expectations remain fundamental principles of the EU law. Golden Visa investors made substantial financial commitments based on the legal framework existing at the time of their investment, creating legitimate expectations.
As an example, the ECJ has held that conduct relating to the provision of unequal pension benefits which was lawful when it occurred will not become unlawful under a later change in EU law, and that rights are "definitively fixed" when acquired. This principle should equally protect investors whose decisions were made under the previous legal regime.
2. No Exceptional Circumstances Apply
The ECJ permits retroactive application only in exceptional circumstances involving serious economic repercussions, objective uncertainty about EU law, or when applying more lenient provisions. None apply here - Golden Visa changes typically tighten rather than relax requirements.
The ECJ emphasizes that financial consequences which might ensue for a Member State from a preliminary ruling do not in themselves justify the limitation in time of the effects of a preliminary ruling, and retroactive laws should be "the absolute exception." Portugal would need compelling public interest grounds outweighing investors' acquired rights, which mere policy preferences cannot satisfy.
Portugal's own track record supports this protection. You only have to look at how the Portuguese Government has respected the rights of investors in the program as the requirements have changed since 2012. Since inception, the price of admission has changed twice, the foundational qualifying asset class, real estate, has been removed as an eligible investment vehicle, and yet, the rights for the investors have remained.
But what happens if this time is different?
As an industry, we're ready to fight for the rights of our investors. We have our first meeting with the Government on Friday 4th July to clearly articulate the positive economic impact of our industry, direct and extraordinary impact on employment, infrastructure investment, innovation and tax receipts that your investment enables.
If necessary, we'll work with constitutional law experts to challenge the law prior to its implementation, including taking the case to the ECJ if necessary. We've played by the rules, made our commitment, and expect Portugal to honour its commitment in return.
To discuss this further, please contact julian@tejoventures.com
