Visa residence in Portugal

With the introduction of Portugal’s “Golden Visa” and a special tax regime for “non habitual residents”, Portugal has become a destination of choice for many non-EU nationals.

The Golden Visa enables non-EU residents not only to be resident in Portugal, but also to move freely within the Schengen Zone.  The “Non Habitual Residents Regime” means that they can, in addition, enjoy low taxes, or, in some cases, freedom from taxation in Portugal.

In order to qualify for a Golden Visa you must meet one of the following investment criteria:

  • Invest at least €1 million in Portugal.  This can be achieved by transferring €1 million to a bank account in Portugal, or the acquisition of equity in a company or companies in Portugal.
     
  • Creation of a business which employs at least 10 people in a full or part time capacity.
  • Purchase and retention of a property for a consideration of at least €500,000.

In order to renew your Golden Visa you must be present in Portugal:

  • For 7 days in the first year.
  • For 14 days in the subsequent two years.

Once you have been resident in Portugal for 6 years you can apply for Portuguese citizenship and obtain a Portuguese passport.

NON-HABITUAL RESIDENTS SCHEME (NHR)

The NHR regime is available to individuals who have not been tax resident in Portugal for the previous 5 years but who are now tax resident in Portugal. To be tax resident in Portugal you must spend at least 183 days a year in Portugal.

You can enjoy the NHR regime for 10 years after which you will be taxed at standard Portuguese tax rates.

The tax rates applicable during the 10 years that you can benefit from the NHR are:

Type of Income

Taxation Rate

Portuguese source:

  • Employment income
  • Self-employment income

Taxation at a 20% flat rate
(instead of taxation at progressive rates)

Foreign source:

  • Self-employment income

Taxation at a 20% flat rate
(instead of taxation at progressive rates)

Foreign source income, regardless of  activity or origin:

  • Employment income
  • Investment income and capital gains
  • Real-estate income
  • Pension income

Exemption if the income is “liable to tax” in the source state under a tax treaty

Passive income included in the regime comprises: interest, dividends, capital gains, other income from capital and income from immovable property.

With regard to pensions, Portuguese Law requires that effective taxation takes place in the source country.

There are a number of additional reasons why Portugal is an attractive location:

  • Pleasant climate
  • Low cost of living
  • Excellent healthcare
  • Good communication links: 278 daily flights from Portugal to destinations worldwide
  • A low crime rate

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