Step 1: What is Your Appetite for Risk:Reward

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The most crucial step is to understand and calculate your appetite for risk and reward while pursuing a European passport through investment.

Are you looking for a low-risk/modest return investment focused on capital preservation?

Or do you have a higher tolerance for risking your capital to achieve higher potential returns?
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With any investment, this needs to be determined before you move forward with assessing available funds.

Step 2: Define Your Criteria

Choosing the fund you will invest in is critical, and therefore you need to ask all the right questions. Further analysis is required on the following:
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• Investment Strategy - Does it make sense, and has it been done before?
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• Industry
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• Market trends
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• Returns
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• Key individuals
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• Fees
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• Duration
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• Exit strategy

Step 3: Do Your Research

The growth of funds in Portugal is due to real estate and this sector’s increase in extreme levels.

This created a feeling of safety and reassurance for everyone who invested in real estate in Portugal during 2014-2019.

However, as of April 2024, this route is no longer an option for the Portugal Golden Visa. As a result, numerous alternative funds have sprung up to fill the void.

But, not all are created equal. Some have legacy projects and achievements to back up their prospectus, others are still finding their feet.

Collect the information necessary to decide by researching yourself and trying to find as much information as possible. It's your money at risk, after all.

Does everything make sense - is there crucial information hidden?

This is where hiring a skilled lawyer to perform due diligence on your behalf can be worth your while. Check out our guide on hiring a Golden Visa lawyer in Portugal.

Step 4: The Fund Strategy

Before you invest, you need to assess the current and future market outlook.

• Where are we in the economic cycle?
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• Is there an upcoming peak or trough expected?
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• What is the plan of the fund in both those case scenarios?
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Another essential element that should not be overlooked is the volatility of the asset.

Finally, it's important to understand the fund exit strategy. Does the exit strategy seem robust and reliable? Will there be a buyer at the time you want to exit?

The more reliable the investment fund is, the more open their advisors will be with your questions about how they expect to repay your initial capital, and when.

Step 5: The Fees

When it comes to fees, you should be extra careful. The best practice is to request and read the management regulations document.

The small print on fees and the probability of these fees changing over time must be highlighted there by law.
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Most commonly in the market, you will find a one-time subscription fee when initially investing in the fund.

Annual management fees are often dynamic, depending on the size of the raise. So, ensure you have correctly understood what the fund will charge you.

Our suggestion is to conduct market research on fees to ensure your decision is right.
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The Golden Visa process from investing to receiving your Portuguese citizenship eligibility is stated to take five years.

However, in reality, the full bureaucratic process takes 6 to 7 years in Portugal.
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In light of recent events such as COVID-19, most funds operate for around 7-8 years to protect investors from any unseen delays in the process.
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Want to learn more? Talk to our experts. Book your call today.
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