Portugal's new Nationality Law has extended the residence period foreign investors must complete before applying for citizenship, and the consequences are already visible: hundreds of Golden Visa holders are preparing lawsuits against the Portuguese State.

President António José Seguro promulgated the new Nationality Law, which altered the rules used to count residence time toward naturalization. Under the reformed framework, the waiting period investors must serve before filing a citizenship application is now longer than under the previous rules. The exact treatment of time already accrued — and whether the new counting method applies retroactively to pending applications — is at the centre of the dispute now taking shape.

Golden Visa applicants, many of whom invested substantial capital in Portugal on the understanding that the route offered a faster path to a Portuguese passport, argue the change undermines legitimate expectations. According to the report, several hundred foreign investors are now weighing legal action against the State over the extended wait.

The stakes are significant. Portugal's Golden Visa programme, formally the Autorização de Residência para Atividade de Investimento (ARI), has attracted thousands of participants since its launch, with investment flowing into real estate, funds and job-creating enterprises. Citizenship was a core part of the programme's appeal. Lengthening the path to naturalization directly affects the value proposition for current participants and those who invested in recent years.

Who is affected

The reform touches two broad groups. First, existing Golden Visa holders and applicants who selected Portugal partly for its citizenship timeline; they now face a longer wait under the new residence-counting rules. Second, foreign residents generally, since the Nationality Law changes how residence time is calculated for naturalization purposes, not just for investors.

The investors preparing lawsuits contend that the State changed the terms after they had committed capital. Their legal strategy is still forming, but the scale — hundreds of potential claimants — signals a coordinated response rather than isolated grievances.

A second layer of uncertainty: tax

Compounding the citizenship dispute, a recent tax ruling has deepened uncertainty around Portugal's foreign resident tax regimes. Foreign residents — a category that includes many Golden Visa participants and other relocating professionals — now face an unclear picture regarding how their income will be treated.

The combination is difficult for prospective applicants. On one side, the citizenship route has lengthened. On the other, the fiscal framework that made relocation attractive is now less predictable. Together, these developments may cool demand for Portuguese investment migration, at least until the legal challenges and tax questions are resolved.

What changes in practice

For investors already in the system, the practical effect is procedural: citizenship applications that would have become eligible earlier must now wait under the extended residence-counting rules. Those considering legal action face the cost and timeline of litigation against the State, with no guaranteed outcome.

For those still deciding whether to apply, the calculus has shifted. The programme's terms at the moment of investment no longer reliably predict the terms at the moment of naturalization — a lesson this reform has made explicit.

What to watch

Key open questions include whether courts will treat the extended residence requirement as applicable to those who invested before promulgation, how the pending lawsuits unfold, and whether the government issues clarifying regulations on the tax ruling affecting foreign residents.

Readers with active applications or pending investments should consult the official publications of the Portuguese immigration authorities (AIMA) and the Ministry of Justice for the authoritative text of the new Nationality Law, and seek qualified legal counsel before acting on any aspect of the reform.