When applying for a Portuguese Golden Visa through investment funds, selecting the right fund structure is critical. This article unpacks the differences between open-ended and closed-ended (venture capital) funds, evaluating liquidity, risk, return potential and suitability for investors from the USA, Brazil and Turkey.

The Critical First Decision

According to IMI Daily, the primary choice facing Golden Visa investors is between venture capital funds and open-ended investment funds. Venture capital funds typically invest in early-stage companies, offering potentially high returns but featuring long lock-up periods and elevated risk. Closed-ended funds generally have a fixed term and limited redemption windows; investors must wait until maturity for liquidity.

Open-ended funds, by contrast, offer daily liquidity and diversified portfolios. They calculate net asset value (NAV) daily and permit redemption without long lock-ups. This is particularly appealing to Golden Visa investors who may need flexibility if personal or financial circumstances change. However, some open-ended funds concentrate heavily on a handful of Portuguese stocks, exposing investors to market volatility and illiquidity.

Evaluating Liquidity and Exit Strategies

A standout example is the Portugal Golden Income Fund, which provides true daily liquidity. All portfolio assets can be converted to cash within five working days, providing a safeguard for investors who value optional early redemption. Daily unit prices are integrated into bank statements for full transparency. By contrast, weekly or monthly redemption schedules can expose investors to rapid market swings.

Risk and Return Considerations

Open-ended funds often adopt a bond-centric multi-asset approach. For example, an allocation of 70 % to investment-grade Portuguese corporate bonds, with smaller allocations to global equities and digital assets, can deliver attractive risk-adjusted returns. Closed-ended venture capital funds may aim for higher returns but are subject to execution risk and longer investment cycles. Investors should assess their liquidity needs, risk tolerance and investment horizon when choosing between the two.

Suitability for Different Investors

• U.S. Investors – Often familiar with mutual funds and ETFs, U.S. investors may appreciate open-ended funds’ daily liquidity and transparent NAV reporting. The potential for portfolio diversification beyond U.S. markets is a significant draw.
• Brazilian Investors – Accustomed to high interest rates and inflation, Brazilian investors might favour bond-heavy funds that hedge against currency risk and offer predictable income. Tax considerations under Brazil’s new IBS/CBS regime also influence after-tax returns.‍
• Turkish Investors – Citizenship-by-investment programmes are common in Turkey, making investors sensitive to regulatory compliance. Daily liquidity and low volatility can help meet both residency and capital-preservation goals while maintaining exposure to European markets.