Several countries have successfully attracted wealthy foreign individuals with residency visas, qualified by a high amount inflow – typically via cash deposits or luxury property purchases. But these rules are changing and a Shariah fund has evolved to continue facilitating such residencies.
A recent example is the Mercan Private Equity Fund I, which was Shariah-certified, with the group behind the fund providing an investment immigration consulting service. Originally based in Canada, the group has expanded to Beijing, Dhaka, Dubai, Ho Chi Minh City, Lisbon, Manila and Phnom Penh.
Mercan Group President and CEO Jerome Morgan said the Shariah certification “validates that Mercan Group’s investment strategies, processes, and compliance measures meet ethical responsibilities”.
This fund offers Class A1 shares based on the Sukuk ljarah model, providing a fixed return on limited investments, and the Musharakah model Class A2 shares that operate on profit/loss sharing after completing five years of a project.
The Mercan Private Equity Fund I is the first by the group that is Shariah compliant and structured specifically to meet the requirements of the Portuguese Golden Visa program – with a minimum investment amount of EUR500,000 (US$545,730).
The fund was introduced as Portugal had scrapped as of October 2023 two key Golden Visa program entry points. Qualification for foreigners can no longer be an investment in real estate nor a transfer of minimum EUR1.5 million (US$1.64 million) into a Portuguese bank account.
Qualification is now possible by a minimum EUR500,000 subscription in investment funds – like a private equity fund, a venture capital fund or a mutual fund – with at least 60% of the fund’s capital invested in companies headquartered in Portugal. Investors must maintain the investment for at least five years.
What makes the Portuguese Golden Visa program especially attractive is its lower financial threshold for the successful candidate to enjoy the benefits of an EU resident, simply by then meeting the minimum requirement of spending an average of seven days per year in Portugal.
Further, the Golden Visa holder can apply after five years for permanent residence status or Portuguese citizenship. This person can then get the Portuguese passport – widely regarded as one of the most desirable because it provides visa-free access to more than 180 countries worldwide.
An extra attraction is that family members can be included in applying for the Portugal Golden Visa – resulting in them being granted the same rights the main applicant has and allowing families to relocate together.
Having such a separate passport makes it convenient for GCC nationals – to whom the Mercan Group is pitching this fund and the Portuguese Golden Visa program.
Investing in this fund is also an easier option compared to otherwise qualifying for the Golden Visa with a minimum EUR500,000 investment combined with the creation of five permanent jobs, or maintenance of at least 10 job positions and for a minimum period of three years.
There is another easier, but less attractive qualifying option of donating a minimum EUR250,000 (US$272,860) for the purpose of the arts, national heritage and culture in Portugal.
