Rio bounces back

In addition to providing a base for Brazilian investors targeting prime cities across Europe, Athena Advisers' Rio de Janeiro office has now expanded to also offer handpicked residential opportunities in the city itself.

"Despite the recent political changes in Brazil, interest in the Rio market has remained strong, but it's the $27 billion of expected investment through government-owned fossil fuels that is the biggest catalyst," says Edouard Barthelemy, who heads up Athena's Rio office.

Fuelling the market

The privatisation of Brazil's oil and gas sector was one of the campaign platforms of the new Brazilian government, which took office on January 1st, 2019 and encouraged private players in this sector to return to the country. Recent auctions of government-owned underground areas of fossil fuel-rich land known as ‘pre-salt blocks’ have attracted industry giants such as Exxon Mobil, Chevron, BP & CNOOC, among others, generating foreign direct investment forecasts of around $27 billion.

"The sale of these pre-salt oil fields will have a direct impact on both Rio's economy and property market," continues Barthelemy. "Rio de Janeiro's oil province accounts for about 50% of the 2.8 million barrels produced per day in Brazil.

When oil flows, people follow and we've seen a big increase in property search mandates from those in the industry. Also, with the privatisation leading to the construction of more oil platforms and ships, the growth in international demand will only continue. We expect to see a lot more US, Chinese, French and other European investors coming to Brazil and Rio in particular."

Recent figures from the Ministry of Labour show that US citizens were the top nationality for requesting work permits in 2018, followed by the Philippines, UK, China & India.

Residency-for-real-estate Programme

Operating since November 2018, the new Brazilian Visa Programme allows foreigners who buy real estate in Brazil to apply for a residency permit.

With around 2.5 million foreigners living in Brazil, this programme aims to make it easier for foreigners to live and invest in the country whilst boosting Brazil’s economy, which was floundering under the previous government. The idea now is to synchronise the expansion of certain sectors like oil and gas with a convenient residency scheme, thereby increasing foreign direct investment.

Mandatory requirements

The minimum investment, either for resale or new build, is BRL 700,000 (EUR 162,000) the northern and north-eastern states) and BRL 1m (EUR 232,000) for the other regions. This applies to both residential and commercial real estate, excluding rural properties.

The investment must be validated by a Brazilian bank and the immigration authorities. Once it’s been approved, the investor receives a temporary 2-year residency permit. After two years of property ownership, a permanent residency is then available. Additionally, the investor must live for at least 30 days in Brazil in order to apply for residency. After four years of residency, the investor and his family can apply for naturalisation.