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Viewing posts categorised under: Golden visa regime

Moving to Portugal | Visa Options

By Mark Quinn - Topics: Golden visa Portugal, golden visa regime, Moving to Portugal, Portugal, Tax in Portugal
This article is published on: 19th December 2021

19.12.21

Non-EU citizens, including the British post-Brexit, who wish to permanently settle in Portugal, must apply for a visa for the right to stay. EU citizens on the other hand have the right to freedom of movement and therefore have an automatic right to stay, so do not need to apply for a visa.

There are several visa options available in Portugal and the most common are the Golden Visa and the D7 visa.

Both visas allow access to the Schengen area, ultimate permanent residence or Portuguese citizenship, and a gateway into the Non Habitual Residence (NHR) tax scheme.

The key difference between the two programs comes down to one of cost versus flexibility. The D7 visa is clearly a lower cost route to Portuguese residency, both in terms of the fees and that there is no investment requirement as for the Golden Visa. However, the D7 route does have substantially longer minimum stay requirements.

Tax dimension
Whilst both visa options grant you legal residency in Portugal, one key difference with the D7 is that it automatically triggers tax residence status in Portugal. This may in fact be a positive thing for many people, given the existence of the NHR program which can result in substantial tax savings.

Whichever route you chose, please ensure you are implementing planning both before your move and after you have established Portuguese tax residency, and put in place planning now that will still be effective after the end of the NHR period.

We can analyse your situation and help decide whether tax residency and NHR status in Portugal is obtainable and will benefit you.

We have written dedicated guides to visa options and the Non-Habitual Residence scheme, both of which can be found on the Portugal page of our website.

Portugal’s Non-Habitual Resident (NHR) Tax Code & Golden Visa Regime

By Spectrum IFA - Topics: golden visa regime, non-habitual resident, Portugal, Residency, Tax, tax advice, Uncategorised
This article is published on: 5th August 2016

05.08.16

It is not an exaggeration to say that Portugal’s NHR and Golden Visa regimes offer two of the most beneficial tax and residence arrangements available in the world.

The NHR Tax Code

  • The NHR tax code is designed to attract foreign individuals to Portugal to entice investment and increase employment opportunities in Portugal
  • NHRs are Tax Residents of Portugal but they can benefit from preferential tax rates and in many cases, receive income and interest, which is totally exempt from Personal Income Tax (PIT)
  • Any person who has not been resident in Portugal in the past 5 years and who subsequently becomes resident of Portugal may be entitled to apply for this status
  • The NHR is valid for 10 years – and may well be extended in the future
  • Individuals who qualify must apply by 31st March in the year following registering as a resident of Portugal

Tax Treatment of *Foreign Source Income (generated outside Portugal)

Category Taxation in Portugal
Pension Tax Exempt
Real Estate Rentals Tax Exempt
Interest Tax Exempt
Employment Tax Exempt
Capital Gains Tax Exempt
Self employment Exempt-as long as obtained from abroad

* Sources of income from any of the 81 “Black Listed” territories will not qualify under the NHR tax code

Portugal Source Income

Any income generated in Portugal will be taxed at a flat rate of 20% instead of at the normal progressive rates: up to 48%

Certain professions, such as architects, engineers, doctors, university professors, auditors and tax consultants and other esoteric occupations may also obtain a favoured tax status.

In essence then, anyone who qualifies for residence in Portugal and who can meet the NHR criteria can obtain the these tax privileges .

Importantly, as well as taking tax advice in Portugal, candidates for the NHR tax Code should ensure that they have informed their home country’s tax authorities that they are leaving to avoid any risk of double taxation.Please note, however, that other countries may challenge such residency status by arguing that in accordance with their domestic rules the relevant person should be considered resident in such jurisdiction. If that becomes the case, i.e. if there is a conflict of residency where two countries consider the same individual resident in both their respective jurisdictions, the tie-break clause established under the tax treaties will apply.

In the case of the United Kingdom, the new Statutory Residence Test (SRT) “maze” can exclude a claim of non UK residence, or inhibit the number of days one can visit the UK in the first three years of non-UK Residence unless certain steps are taken.

How can we help?

  • We can advise and assist in obtaining NHR with suitably qualified Portuguese associates and assist in obtaining applying for the NHR tax code treatment
  • We can refer clients to our UK tax advisors who will ensuring that the correct procedures are adopted so that the SRT non-resident status is met. This will ensure, with the agreement of HMRC, no UK tax returns being necessary in the future
  • Likewise, our qualified Portuguese associates, will provide the necessary forms under the Portugal Double Tax Agreements to ensure any UK non- Government pension income is paid gross

Golden Visa

Who Can Apply for the Golden Visa
Third State citizens involved in an investment activity, either individually or through a company conducting, at least, one of the following operations in national territory for a minimum period of five years:

I) Capital transfer with a value equal to or above 1 million Euros;
II) Creation of, at least, 30 job positions;
III) Acquisition of real estate with a value equal to or above 500 thousand Euros.

It covers shareholders of companies already set up in Portugal, or in another EU State, with a stable residence in Portugal and with tax obligations fulfilled.

  • The investment function established for the Golden Visa has to made and maintained for a minimum of 5 years from the date of which the Golden Visa is established
  • The Golden Visa is initially valued for 1 year, renewable for each 2 year period required
  • Holders of the golden visa may need to evidence that they have stayed on Portuguese territory for at least 7 days in the first year and 14 days in the subsequent 2 year renewal periods
  • After the 6th year, the Visa holder is eligible to apply for Portuguese citizenship, if they so desire

How can we help?

In conjunction with our Portugal Legal associates we can guide applicants through all aspects the process of obtaining the Golden Visa permit.