Individuals seek out Portuguese residency for many different reasons. Some may consider moving to Portugal for a lifestyle change or to secure a pleasant destination for their retirement years. Others may not care to move to Portugal at all, preferring to use their Portuguese residency status as a means to travel freely through the Schengen Zone or have greater access to the European Union (EU) market. Whatever your reasons, obtaining residency through the Portugal Golden Visa Program will mean abiding by the country’s tax regime.
In This Article:
- What is the Portuguese Golden Visa Program?
- How Are You Taxed in Portugal?
- Other Benefits Associated with the Program
- Book a Free Consultation
To better prepare you for what you can expect when acquiring Portuguese residency, we provide a breakdown of taxes for Portugal Golden Visa residents.
What is the Portuguese Golden Visa Program?
Launched in October 2012, the Portugal residency and Golden Visa Program is a legal process based on the law that invites foreign investors from non-EU countries to obtain fully valid residency permits in Portugal for themselves and their families.
The Portugal Golden Visa Program consists of a few simple steps and requires applicants to be at least 18 years of age, in good health, possess no criminal record, have confirmed investment sources and successfully pass due diligence checks. Individuals can apply as single applicants or as a family.
Eligible family members include the spouse of the main applicant and children (biological or adopted) under 18 years of age. Parents and children older than 18 years old can be included in the application if they are dependent on the main applicant.
If all the minimum criteria are met, applicants to the Portugal residency by investment program are required to purchase property in Portugal or make an alternative investment into the country – such as job creation or investing in a small local business – before the application can be filed.
By fulfilling minimal requirements, you may be eligible for Portuguese citizenship after 5 years of holding your residency.
Successful applicants will receive their residency permit and will gain the right to live, work, travel and study in Europe as well as gain access to Portugal’s healthcare and consumer rights. Portugal has a minimal residency that requires residents to visit the country for only 7 days per year for 5 years – the rest of the time can be spent wherever they wish.
How Are You Taxed in Portugal?
There are two things we can all be certain of in life – death and taxes. No matter where you go in the world, you will always be required to pay some form of tax. The real question is, how much tax will you be paying?
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Surprisingly, Portugal is a highly tax-efficient home when compared to other European Union countries, the United Kingdom and the United States. Once you are a Portuguese resident, you could potentially pay:
- Income tax of up to 48%
- A ‘solidarity tax’ of 2.5% or 5% on higher incomes
- 28% on interest income
- Tax on capital gains when selling property and investments
- An annual wealth tax of up to 1% on property interests worth over €600,000
Non-habitual Resident Tax Regime
However, in 2009, Portugal implemented the non-habitual tax regime (NHR) to attract High-Net-Worth investors and professionals to the country. People of any nationality can potentially qualify for NHR if they have not been residing in Portugal within the previous five calendar years. The regime allows for substantial tax savings over a 10-year period for Portuguese residents who qualify. Therefore, only those who first acquire residency through the Portugal Golden Visa Program can then become eligible for the non-habitual resident tax regime.
Tax Benefits of the NHR
- Benefit from a special personal income tax treatment over 10 years.
- Possibility of enjoying a tax exemption on almost all foreign income sources
- 20% flat rate for certain Portuguese income sources (from specific professions as well as income from self-employment), as opposed to the usual Portuguese income tax rates of up to 48%.
- No minimum stay requirement.
- Become part of a white-listed tax environment within the EU.
- Tax exemption for gifts or inheritance to direct family members.
- No wealth tax.
- Free remittance of funds to Portugal.
Expats living in Portugal can benefit from the Non-Habitual Resident (NHR) tax codes, which grant substantial exemptions for the first 10 years of residence.
Other Benefits Associated with the Program
- Freedom of movement: As a permanent resident of Portugal, investors are also classified as a resident of the European Union. They will gain freedom of movement without restrictions in the Schengen Area.
- Health & Education: Investors and their families can enjoy quality education in schools and universities and world-class healthcare across Portugal and Europe.
- Minimal residency required: The program requires a minimal physical residency in Portugal of 7 days per year.
- Pathway to citizenship: When investors fulfil all the residency program requirements and hold their residency for 5 years, they are then eligible to apply for Portuguese citizenship.
- High-ranked passport: The Portuguese passport is ranked in the top 5 passports in the world for ease of travel.
- Ease of travel: Once residents of Portugal obtain citizenship, they can then enjoy visa-free or visa-on-arrival travel to over 185 countries and territories, including the USA, Singapore and Hong Kong.
Book A Free Consultation
When applying to any Citizenship or Residency by Investment program, please be sure to render the services of a government authorized agent and advisor like Savory & Partners. The internet is rife with fraudulent companies offering scams that promise citizenship or residency within an implausible timeframe and at an impossibly low price. If it’s too good to be true, then it probably is.
Savory & Partners is a government-approved agency that specializes in High-Net-Worth individuals applying to any Citizenship or Residency by Investment program. We are a British Authorised Agent with decades of experience who has helped over 1200 families obtain second citizenship and have a 100% success rate in the industry.
If you would like to apply to the Portugal Golden Visa Program or want to learn more about the other European residency through investment programs on offer, then contact us today for a free online consultation and one of our agents will happily aid you in your endeavours. All of our team members have at least 5 years of experience in Citizenship and Residency by Investment Programs.
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