31 March 2023

Dear Investors and Partners,

Following our previous communication on March 5th, Mercan Properties participated in the public hearing during the last weeks, alongside the municipalities and other entities, to portray the benefits of the ARI program and submitted its memorandum for public consultation as well as other developers, associations, law firms, lawmakers, political parties, and other relevant stakeholders contributed to the extensive public consultation.

At the Meeting of the Council of Ministers held yesterday, the Prime Minister (PM) António Costa presented the PowerPoint version of the final proposal on housing reforms to the public that will be sent to the Parliament for debate.

The PM mentioned that Portugal is and will continue to be open to foreign investment; however, the PM indicated that the proposal presented maintains the initial position about the GV program, namely its termination. However, the PM also said that “the end of the Gold Visas depends on the Parliament and the promulgation of the President of the Republic.”

The current law continues in place, and the portal for the SEF portal submission of applications continues to be opened. Regarding the bill proposal, there were no references to special conditions for renewing permits based on real estate investment under the current draft presented, which was included in the initial draft. In any case, the Government kept in the proposal,  the issue of the retroactive effect of the law to be approved,  and announced that it intends to submit all existing applications under the general regime for authorization permits.

Given that the proposal was not made available – only the PowerPoint document used in the presentation by PM, there is no way of determining precisely what the proposal entails. In any case, the Government has been evident in stating that this is an initial proposal and that in the Parliament, both in the general session´s discussions and within the respective specific committees, there will be the possibility to debate and, eventually, amend the proposed solutions.

When questioned about the date of entering into force the amendments, the Prime Minister directed the topic to the Parliament´s agenda and procedures.

Regarding the following steps, we believe the path ahead will be as follows:

  • Considering the discussion in the Parliament’s general session, followed by the analysis in the respective specific committee and the final vote, a minimum of two months may be needed to complete this step.
  • Finally, the law will be submitted to the President of the Republic, who has 20 days to ratify, veto, or send the document to the Constitutional Court.

Moreover, we are focused on making every effort to engage the Portuguese government in fulfilling the commitments which concern the ARI Program.

Mercan Properties can assess and reassure its investors, that numerous Members of the Parliament and Members of the Cabinet are in favor of several amendments to the proposal on housing reforms and that the President of the Portuguese Republic, Marcelo Rebelo de Sousa, has already announced he will follow closely all matters that can be invoked regarding the constitutionality of the proposal.

Furthermore, we reinforce that the projects developed by Mercan Properties remain available for investments and that investor applications continue to be submitted at SEF without any changes to the standard golden visa process. We will continue to issue a side letter covering potential liabilities for the investor arising from the current legislative moment as a solid guarantee from Mercan Properties.

Mercan Properties will continue to follow this matter closely and provide full support and information on the current discussion and decisions.

We are available to clarify and expand on any of the matters outlined.

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