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On March 30th, the Portuguese Government announced measures to be adopted under the Habitation legislative package, following the public hearing period and contributions of private and public entities.
The wording of the law that was approved by the Council of Ministers was not released yet, but listening to the press conference and the reading the summary document released, we could understand the following points:
1) In relation to the visas already granted and their renewal, in order to give security to all those who hold them, is that, their residence permit, at the moment of renewal, and if they meet the criteria, will be converted into a normal residence permit, just like any other foreigner residing in our country.
2) Visa applications will end up with a general regime and everyone will be treated according to the general law and without jeopardizing legal security.
3) Government persists with the idea of having the future law with retroactivity to February 16.
4) This time, there were no references to special conditions for the renewal of permits based on real estate investment.
At this point the market is waiting to have access to the concrete wording of the law that will be sent to Parliament for discussion and amendments, expectably after the Easter period. After this, the diploma must be sent to the President of the Republic who may react as mentioned below:
- Direct ratification and in this case, the proposal will be published in the official journal；
- The President does not accept the proposal as it is, and returns it to the Parliament for amendment or;
- The President accepts the document but requests the evaluation of the Constitution Court to confirm if any fundamental rights or principles are being jeopardize by the new legislation.
It is expected that in the Parliament the political party’s discussion will lead to some amendments, namely in regards to the retroactive effect (which is understood by Law professors as unconstitutional), to the concrete process of Golden Visa conversion into other immigration programs and the alternative investment programs that will lead to a residence permit.
It is also worth to mention that on March 21, the President of Portugal made the following points about the proposal on housing affordability in regards to the termination of the Golden Visa program:
- It is conceived that the proposal would not be operational.
- It seems like a propaganda law proposal, not meant to be applied
- Created expectations that will be immediately frustrating.
- It should not have been presented because the solution is not executable
On the Golden Visa program retroactivity and lack of transition period, please see some relevant news that came out today where the top Constitutional Law Professor state the Golden Visa termination provisions are clearly unconstitutional.
Top 3 Constitutional Law Professors Say It’s Illegal to have Retroactivity to February 16 2023
English Translation of the News
Legal opinions by Jorge Miranda, Sérvulo Correia and Rui Medeiros conclude that the end of the gold visa regime, with the prohibition of still considering applications submitted after 16 February, violates the principle of the protection of confidence.
The Government’s draft law which determines the end of the Golden Visa regime – and, at the same time, stipulates that visa applications filed after 16 February (the date on which the proposal was made public) will no longer be considered – is unconstitutional, essentially due to the violation of the principle of the protection of citizens’ trust and legitimate expectations. This is the conclusion reached by constitutionalists Jorge Miranda, Sérvulo Correia, Rui Medeiros and Gonçalo Bargado, who looked at the Mais Habitação package and have no doubt that the proposal is unconstitutional in the part concerning Golden Visas.
The version of the text submitted to public consultation, on which the specialists had looked at, ends with the Investment Residence Permit (ARI) regime and puts a brake for the future, insofar as it foresees that only applications “awaiting decision by the competent entities on 16 February 2023”, date when the measure was first announced, will remain valid. The idea was to avoid a gold visa race, with potential applicants trying to take advantage of the law while it was still in force, that is, until the enactment and publication of the Mais Habitação laws.
The problem, constitutionalists say, is that this violates the fundamental law. Jorge Miranda, professor and one of the fathers of the Constitution, recalls that “citizens are entitled to the protection of confidence” and “the confidence that they can put in the acts of political power that conflict with their legal spheres”. The State, on the other hand, has a “duty of good faith” and, since it is true that the law may change, in addition to the restrictions that exist with regard to retroactivity, reasonable periods of “vacatio legis” must be ensured” in any case, that is to say the period between the publication of a law and its effective entry into force.
In the opinion of the constitutionalist, the Executive’s proposal “affects the guarantee and the confidence of those directly interested” and in it “a vacatio legis period is not even contemplated”, and as such “it suffers from material unconstitutionality”.
Jorge Miranda is echoed in another opinion, this one signed by Sérvulo Correia, Rui Medeiros and Gonçalo Bargado, who also have no doubt that the proposal calls into question the constitutional principle of the protection of confidence. And, equally, that since the legitimate expectations of citizens are affected, then the legislator should “adopt a transitional regime that ensures that the implementation of the new measures is done gradually and deferred over time”. However, they stress, “until the enactment of the law in question, any ARI applicant had and still has a legitimate expectation of obtaining this residence permit”, even if they submitted their application after February 16.
In this case, the specialists also point out that the protection of confidence is verified in relation to those who “have in the meantime effectively made an investment, namely through the acquisition of real estate” or “the signing of a promissory contract”, which having values of 500 thousand Euros or more, are “significant expenses”.
Both opinions were requested by the law firm Ana Bruno & Associados and were issued before the new version of the Mais Habitação, which maintains the revocation of the gold visas and the retroactive effects to February 16, determining that the requests made after that date will be processed according to the residence permit regime for entrepreneurial immigrants.
Filipe Eusébio, partner at Ana Bruno & Associados and also a specialist in public law, points out that, given the change in the law that is on the table, those who already have investments underway will, in the future, have the legitimacy to demand compensation from the State that may reach “unaffordable” amounts. And he warns that “the way the measure is intended to be implemented will bring grounds for mistrust in Portugal as a safe destination for international investment.
In practice, he concludes, “it is demonstrated that a law that aimed to attract such investment can after all be revoked with retroactive effect, irreversibly affecting acquired rights without any care for the legitimate interests of those who have invested in the national territory.”
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