The Residence Permit for Investment (“Autorização de Residência para Investimento” – ARI), also known as the Golden Visa, has undergone significant changes in the past few years, with the most impactful being the elimination of real estate investment as an eligible route for obtaining temporary residency in Portugal. As a result, foreign investors have turned to alternative options, with investment funds becoming an appealing choice for those looking to invest in the country.

Unlike direct real estate investment, investment funds offer diversification and, in some cases, potentially solid returns. However, as with any financial decision, investing in funds requires careful consideration of the risks involved and to ensure that investment funds operate within a secure and transparent framework, Portugal has implemented strict legal and regulatory mechanisms that protect investors and maintain the integrity of the financial market.

One of the most critical entities in this regulatory landscape is the Portuguese Securities Market Commission (“Comissão do Mercado de Valores Mobiliários” - CMVM), which plays a central role in supervising financial markets. This entity was established in 1991 and is responsible for overseeing investment funds, management companies, and overall market conduct, with the primary mission to ensure transparency, protect investors, and promote stability in Portugal’s financial sector. Before an investment fund can qualify for Golden Visa applications, it must be registered and approved by the CMVM and this process involves reviewing the fund’s structure, management regulations, and risk controls, ensuring that it operates according to Portuguese law.

Beyond granting approvals, the CMVM continuously monitors the management companies that oversee these funds, ensuring they comply with financial regulations, maintain proper governance structures, and act in the best interests of investors. Transparency is a key requirement, and investment funds must provide clear, comprehensive, and timely information about their investment policy, asset portfolios, and associated risks. This ensures that investors can make informed decisions and fully understand the nature of their investments.

Market oversight is another fundamental function of the CMVM, particularly in the prevention of fraudulent practices and unethical behavior. By closely monitoring fund management and financial transactions, the regulator can identify potential conflicts of interest, irregularities, or financial misconduct. Also, if a fund or its management company fails to comply with the established regulations, the CMVM has the authority to impose sanctions, which may include financial penalties or even the suspension of operations. These enforcement powers help to maintain a secure and well-regulated investment environment, reinforcing confidence among foreign investors considering Portugal as a destination for capital allocation.

While the CMVM ensures broad market compliance, the day-to-day management of investment funds is entrusted to specialized investment fund management companies. These entities are responsible for structuring, administering, and strategically managing capital within the funds they oversee. Their role is essential in ensuring that investments generate sustainable returns while balancing risk exposure.

Therefore, the management companies of a fund must carefully assess market conditions, allocate capital strategically, and optimize returns while minimizing potential financial risks. These entities are also responsible for maintaining ongoing communication with investors, ensuring that they receive regular updates on fund performance, asset distribution, and any changes to the investment strategy.

Additionally, the management companies must comply with strict financial regulations, ensuring that all transactions adhere to Portuguese and European Union legal frameworks, particularly concerning anti-money laundering and investor protection and, therefore, to reinforce transparency and accountability, investment funds are subject to independent audits, where external financial experts verify fund performance and compliance with regulatory obligations. Many management companies also work closely with financial advisors, market analysts, and valuation experts to fine-tune their investment strategies and ensure responsible governance.

To ensure strong investor protection, Portuguese law enforces strict transparency and reporting standards, requiring fund managers to regularly disclose key financial details such as performance, asset distribution, and risk exposure, while independent audits help verify that financial statements accurately reflect the fund’s true standing. At the same time, risk management protocols are designed to minimize excessive volatility and safeguard investor capital, ensuring that, should any issues arise, the CMVM is available to investigate complaints and take corrective action when necessary.

With real estate investment no longer an option under the Golden Visa program, investment funds have become one of the most attractive alternatives for those looking to secure residency in Portugal, combining potential financial returns with a structured regulatory framework. Still, investing in funds is not something to be taken lightly, and it is crucial to understand who is managing the capital, how these funds are regulated, and what safeguards exist to protect investors before making any commitments.

The CMVM’s strong regulatory oversight ensures that investment funds operate transparently and in full compliance with ethical and legal standards, while fund management companies are responsible for making strategic financial decisions, optimizing returns, and safeguarding investor capital. Together, these elements contribute to a secure and well-regulated financial market that continues to draw international investment. By upholding a robust legal framework and ensuring strict compliance with international financial standards, Portugal reinforces its reputation as a stable and reliable jurisdiction, with regulated investment funds providing a structured and secure route to obtaining a Golden Visa.

Credits: Supplied Image; Author: Client;

by Patrícia Carneiro, Senior Associate in the CCA's Real Estate Department