The Clock May be Ticking for Portugal Citizenship

The Clock May be Ticking for Portugal Citizenship
Portugal’s fast-track to citizenship may soon slow down.|©iStock/Balate Dorin

European citizenship options seem to be going through a musical chairs moment. In just the last few weeks, two popular destinations for potential citizens have proposed big changes.

A month ago, the Italian government issued a decree severely limiting the conditions under which descendants of Italian citizens can claim citizenship. If the decree is ratified by the Italian parliament, the country may go from one of the most welcoming in Europe to one of the more difficult.

Now the Portuguese coalition government is threatening to change the conditions under which one may become a citizen. Currently, becoming a naturalized Portuguese requires five years of regular residency, or five years holding a golden visa, which requires only limited annual presence.

The proposal would change key elements of that process and may well become law. The center-right coalition government in Lisbon faces a significant challenge from far-right party Chega in parliamentary elections scheduled for May. The proposal is likely an attempt to attract voters away from that party, which is founded largely on anti-immigrant sentiment.

Although details haven’t been made available, the proposal targets two issues.

First, the accompanying press release specifically mentioned the length of time it takes to become a naturalized Portuguese citizen. It’s currently five years, the fastest in the European Union. That makes Portugal highly attractive for people looking for an EU passport. Several European countries currently naturalize after seven years, with many others requiring ten. Either could be possible under this proposal.

Second, the proposal mentions a commitment to life in Portugal. Holders of Portuguese golden visas only need to spend about seven days a year in the country to keep it active. Even so they are eligible to apply for citizenship after five years, the same as those holding retirement or digital nomad visas.

Taken together, this suggests the coalition proposal is aimed at the golden visa space.

When the Golden Visa was launched in 2012, about 3% of Portuguese residents were foreigners. Now the proportion is nearing 15%. Although only about 3% of Portugal’s foreign resident population are golden visa holders, the fact that they often have little personal connection to the country upsets many traditionalists.

The country’s governing coalition might also be trying to capitalize on resentment at the impact of previous golden visa conditions. The residential property option was dropped at the end of 2023, but by then golden visa applicants had bought between 40,000 and 50,000 houses. Many were removed from the long-term rental market and converted to Airbnbs, driving up rents for locals. In just one quarter during 2022 rents in Lisbon increased by nearly 30%.

The current proposal comes amidst a shift in the origins of Portuguese golden visa applicants. Traditionally, most were Chinese, Middle Eastern, or Russian. Americans and Britons are rapidly overtaking them. Despite the price tag, the option to invest €500,000 in a Portuguese venture fund has proved attractive.

Unlike the Italian citizenship decree, which takes effect on May 1, the Portuguese proposal is just that, and its ultimate passage is unsure. Nevertheless, anyone looking to acquire European Union citizenship in Portugal should move up their timeline.

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