Real Outcomes from Real Investors

Investor Profile

• US citizen, age 52
• Tech executive with significant stock compensation
• €600,000 available for Golden Visa investment
• Primary goal: EU residency for retirement optionality
• Key concern: US tax complexity

The Challenge

John had been researching Golden Visa funds for four months. He'd narrowed his options to a Portuguese venture capital fund recommended by a local lawyer. The fund offered attractive projected returns (12-15% IRR) and had a good track record.

What John didn't realize: the fund provided no annual PFIC statements. As a US citizen, this would have triggered the punitive "excess distribution" tax regime—potentially costing him 40-50% tax rates on gains instead of the 20-23.8% he expected.

Our Analysis

We reviewed John's situation and identified the PFIC documentation gap immediately. The fund he was considering would have required him to estimate income annually (difficult) or face punitive taxation when he exited.

We identified three alternative funds that:

• Provided proper annual PFIC information statements
• Offered similar risk profiles (growth-oriented, but not VC-aggressive)
• Had comparable fee structures
• Explicitly supported US investors with required documentation

The Outcome

John selected a private equity infrastructure fund that provided full PFIC documentation. Over his 7-year holding period, the tax savings compared to the non-compliant fund were estimated at €47,000—assuming similar performance.

More importantly, John could file his US taxes with confidence rather than uncertainty about IRS treatment.

Key Takeaway

For US investors, PFIC compliance isn't optional—it's essential. The fund that looks best on paper may be the worst choice for your tax situation.

Investor Profile

• Brazilian citizen, age 45
• Business owner selling company
• €500,000 from business sale
• Primary goal: EU education access for children
• Key concern: Processing timeline

The Challenge

Maria wanted her Golden Visa approved before her eldest child started university applications. With typical processing times of 24-36 months, timing was critical. She couldn't afford delays from documentation issues or fund eligibility questions.

Our Approach

We focused on minimizing anything that could cause application delays:

1. Fund Selection: Chose a well-established fund with a clear CMVM registration history and no eligibility ambiguities
2. Documentation Prep: Helped Maria understand exactly what documentation AIMA required, sequenced correctly
3. Lawyer Coordination: Connected her with a lawyer experienced in straightforward applications
4. Proactive Compliance: Ensured all anti-money-laundering documentation was prepared in advance

The Outcome

Maria's application was approved in 18 months—half the average timeline. Her children now have EU residency, expanding their university options across Europe.

The faster approval wasn't luck. It was the result of choosing a straightforward fund, preparing complete documentation, and avoiding anything that could trigger additional review.

Key Takeaway

If timeline matters, simplicity beats optimization. The "perfect" fund with complexity is often worse than a "good enough" fund with straightforward eligibility.

Investor Profile

• US citizen, age 58
• Corporate attorney nearing retirement
• €540,000 ($600,000) available in self-directed IRA
• Primary goal: Retirement in Portugal
• Key concern: Using retirement funds without penalties

The Challenge

David wanted to use his IRA for the Golden Visa investment. This is technically possible through self-directed IRAs, but the rules are complex:

• The IRA (not David personally) must own the fund units
• No "self-dealing" or prohibited transactions
• Custodian must support international fund investments
• PFIC rules still apply to IRA investments (though deferred)

Most advisors had told David this wasn't possible or was too complicated.

Our Approach

We worked with David's existing self-directed IRA custodian to:

1. Verify capability: Confirmed the custodian could invest in Portuguese CMVM funds
2. Structure correctly: Ensured fund subscription documents named the IRA as investor
3. Select appropriate fund: Chose a fund experienced with institutional/IRA investors
4. Navigate prohibited transactions: Structured everything to avoid IRS violations

The Outcome

David successfully invested $600,000 from his IRA in a qualifying Golden Visa fund. The investment remains tax-deferred within the IRA structure. When he eventually takes distributions in retirement (while living in Portugal), he'll benefit from the US-Portugal tax treaty.

Key Takeaway

IRA investments in Golden Visa funds are possible but require careful structuring. The wrong approach could trigger prohibited transaction penalties (100% of the investment). Get specialized guidance.

Investor Profile

• Indian family (UK residents)
• Parents (55, 53) and two children (22, 19)
• €500,000 from property sale
• Primary goal: EU mobility for family
• Key concern: Capital preservation over returns

The Challenge

The Singh family wasn't looking for investment returns—they wanted to preserve capital while gaining EU residency. Their €500,000 represented a significant portion of their wealth, and they couldn't afford meaningful losses.

They were initially attracted to funds advertising 10-12% returns but were uncomfortable with the venture capital strategies involved.

Our Analysis

We helped the Singhs understand the risk-return spectrum:

• Venture capital funds: 10-15% target IRR, but significant loss potential
• Private equity: 6-10% target IRR, moderate risk
• Diversified mutual funds: 2-5% target IRR, lower risk, more liquidity

Given their goals (capital preservation, not growth), we recommended focusing on diversified mutual funds despite lower projected returns.

Fund Selection

We identified three conservative funds:

• Diversified Portuguese equity mutual fund
• Balanced fund with fixed income component
• Multi-manager diversified fund

The family chose the balanced fund, which allocated 60% to diversified equities and 40% to fixed income, offering more stability than pure equity exposure.

The Outcome

After three years, the fund has returned approximately 3% annually—below what aggressive funds claimed to target but with much lower volatility. The family's capital is preserved, and they're on track for citizenship.

Key Takeaway

Don't chase returns if your goal is residency. A "boring" fund that preserves your capital is often better than an exciting fund that puts it at risk.

Investor Profile

• UK citizen, age 48
• Finance professional
• €500,000 investment
• Primary goal: EU business access post-Brexit
• Key concern: UK tax efficiency

The Challenge

James understood that fund taxation in the UK depends on "Reporting Fund" status. Non-reporting funds are taxed at income tax rates (up to 45%) rather than capital gains rates (20%). Over a 7-year holding period, this difference could be substantial.

Most Portuguese Golden Visa funds aren't on the UK Reporting Fund list because they don't market to UK investors.

Our Research

We reviewed HMRC's Reporting Fund list against CMVM-approved Golden Visa funds. We found:

• 3 funds with confirmed Reporting Fund status
• Several funds willing to apply for status if requested
• Many funds with no UK tax consideration at all

The Outcome

James selected a fund with existing Reporting Fund status, ensuring his eventual gains would be taxed at 20% rather than potentially 45%. The tax savings over his holding period: estimated at €15,000-30,000 depending on fund performance.

Key Takeaway

UK investors should verify Reporting Fund status before subscribing. The wrong fund could nearly double your tax burden on gains.