An investment of € 350,000 in investment funds or venture capital funds is one out of the eight qualified types of investment provided for a Golden Visa application. An investment fund is a type of collective investment under which all fund participants invest money together into stocks or other capital investments .
The intention of the funds is the capitalization, innovation and development of Portugal and investments are established under the Portuguese law. Therefor funds need to have a maturity at the time of investment of at least five years and at least 60% of the value of the investments has to be made in commercial companies headquartered in Portugal. The investments funds are managed by so called investment fund management companies and are regulated by the Portuguese Capital Markets Board - CMVM. The funds are also managed, audited, and valued by independent and licensed companies providing additional security and transparency to the investor.
How can I make the investment? What is the process?
What are the benefits / advantages from investment funds?
What are the cons / disadvantage of investment funds?
After defining the investment objective, the individual risk preference and the investment period, the selection of the suitable investment product also requires the consideration of other important factors. For example, legal and tax law aspects must be observed in the case of funds with foreign domicile. It should also be clarified how high the costs of the assessment are.
The triangle of successful fund selection is thus:
What information should be considered to characterize the Investor?
What types of risk profile exist?
There is no legislation regarding the different investment risk profiles. However, the most common designations are:
Which sources of information are preferred depends very much on the information needs and interests of the investor as well as the type and amount of the investment. For an actively managed fund portfolio with equity funds, there is certainly a greater need for information than for a long-term savings plan with bond funds. There are basically the following sources of information:
In 2016 a resolution of the Assembly of the Republic in Portugal approved the agreement with the United States to reinforce the tax compliance and implement the Foreign Account Tax Compliance Act (FATCA). With the entry into force of the US FATCA, all foreign financial entities, is obliged to identify the accounts of its North American Clients (US Persons).
The act requires that foreign financial Institutions and certain other non-financial foreign entities to report on the foreign assets held by their U.S. account holders or be subject to withholding on withholdable payments. The Act also contained legislation requiring U.S. persons to report, depending on the value, their foreign financial accounts and foreign assets.
For this purpose, US Persons are considered to be American citizens or residents of the USA.
There are qualifying funds that will deal with the US government reporting requirements. Once the lawyers provide a report, US persons can then make their investments.
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