Setup visibility level for project when transfering for a group

app/services/projects/transfer_service.rb

@@ -34,9 +34,12 @@ module Projects
           raise TransferError.new("Project with same path in target namespace already exists")
         end
 
-        # Apply new namespace id
-        project.namespace = new_namespace
-        project.save!
+        # Apply new namespace id and visibility level
+        project.tap do |p|
+          p.namespace = new_namespace
+          setup_visibility_level(p, new_namespace)
+          p.save!
+        end
 
         # Notifications
         project.send_move_instructions(old_path)
@@ -68,5 +71,15 @@ module Projects
         namespace.id != project.namespace_id &&
         current_user.can?(:create_projects, namespace)
     end
+
+    private
+
+    def setup_visibility_level(project, new_namespace)
+      return unless new_namespace.is_a?(Group)
+
+      if project.visibility_level > new_namespace.visibility_level
+        project.visibility_level = new_namespace.visibility_level
+      end
+    end
   end
 end

app/views/projects/edit.html.haml

@@ -210,6 +210,7 @@
                     %li Be careful. Changing the project's namespace can have unintended side effects.
                     %li You can only transfer the project to namespaces you manage.
                     %li You will need to update your local repositories to point to the new location.
+                    %li Project visibility level will be changed to match namespace rules when transfering to a group.
               .form-actions
                 = f.submit 'Transfer project', class: "btn btn-remove js-confirm-danger", data: { "confirm-danger-message" => transfer_project_message(@project) }
       - else

spec/services/projects/transfer_service_spec.rb

@@ -38,4 +38,27 @@ describe Projects::TransferService, services: true do
   def transfer_project(project, user, new_namespace)
     Projects::TransferService.new(project, user).execute(new_namespace)
   end
+
+  context 'visibility level' do
+    let(:internal_group) { create(:group, :internal) }
+
+    before { internal_group.add_owner(user) }
+
+    context 'when namespace visibility level < project visibility level' do
+      let(:public_project) { create(:project, :public, namespace: user.namespace) }
+
+      before { transfer_project(public_project, user, internal_group) }
+
+      it { expect(public_project.visibility_level).to eq(internal_group.visibility_level) }
+    end
+
+    context 'when namespace visibility level > project visibility level' do
+      let(:private_project) { create(:project, :private, namespace: user.namespace) }
+
+      before { transfer_project(private_project, user, internal_group) }
+
+      it { expect(private_project.visibility_level).to eq(Gitlab::VisibilityLevel::PRIVATE) }
+    end
+  end
+
 end