Why South Africans are flocking to Portugal?
Investing in offshore property is an excellent way for South Africans to get access to immigration and residency in a foreign country. In times of spiking inflation in South Africa as well as global economic instability a real estate grounded fund is beneficial as a means of safeguarding finances. Besides the benefits of owning a property in another country, the opportunity of a Golden Visa is an attractive incentive for South Africans seeking future security for their families. Furthermore, property traditionally gives strong above inflation long term returns through both capital appreciation and revenue generation
Statistically, Portugal rates as one of the most popular golden visa and investment destinations for South Africans due to the enticing family friendly lifestyle and climate. This together with other strong fundamentals, is how Portugal’s property market has lured a significant percentage of High Net Worth Individuals particularly from South Africa. A key attraction for investors is Portugal’s stable economy and healthy property market.
As we know, Investors can gain citizenship within five to six years once their Golden Visa has been approved, following which – providing permanent travel within Schengen countries capacity but also the ability to live and work anywhere within the EU. Other benefits to South Africans for offshore property investment in Portugal are long-term capital appreciation prospects and currency hedge. The same would apply in large to other investors from emerging markets such as Brazil and Turkey for example.
While most investments provide potential for long-term returns, offshore investments give the opportunity to outperform inflation in most cases and grow capital in a stronger currency. Offshore investments provide access to global markets, allowing investors’ money to work harder within a diversified portfolio.
The importance of dealing with established and reputable entities within this space cannot be stressed enough which is why South African based 12 Star Capital after extensive research elected to identify only best in class Portugal partners for collaboration. Investors using 12 Star Capital to facilitate their offshore investment have the confidence that the money being invested is secured in opportunities that have been scrutinised and assessed by experts in the field. An example would be the EQTY Capital initiated and professionally managed platform for Golden Visa eligible funds which provides access to a select and diverse portfolio from Portugal’s leading Real Estate Developers, all with a reputation of delivering exceptional properties. The properties in the portfolio are rented out with the rental income being paid out in the form of dividends. Importantly, these rental leases have inflation-linked increases further protecting against periods of high unstable inflation like we are currently experiencing.
Golden Visa investors have "risk mitigation" at the forefront of their thoughts, so it is paramount to ensure that investments presented comply with this and are not overextended to one asset type or real estate developer for example. The question should be asked: "If a Golden Visa was not attached to this particular investment, would I be interested in it?". Fundamentally, is it a good investment?