Portugal Golden Visa Program – 2023 Guide
The Portugal Golden Visa Program, officially known as the Portugal Golden Residence Permit Program, is a five-year residence-by-investment scheme designed for non-EU nationals. Established in 2012, this program allows investors to live, work and study in Portugal while enjoying visa-free access to Europe’s Schengen Area.
Importance of the program for Non-EU Nationals
For non-EU nationals, the Portugal Golden Visa Program presents a unique opportunity to gain residency and potential citizenship in a European Union country. The program offers a variety of investment options, making it flexible and accessible to a wide range of investors. Furthermore, the program has a minimal physical presence requirement, making it an attractive option for those who wish to maintain their primary residence outside of Portugal while still enjoying the benefits of EU residency.
Understanding the Portugal Golden Visa Program
The Portugal Golden Visa Program, also known as the Portugal Golden Residence Permit Program, is a residence-by-investment arrangement established in 2012. The program was designed to attract foreign investors, providing them with a pathway to fully valid EU residency permits.
Benefits of the Program
Visa-free travel in Europe’s Schengen Area
One of the key benefits of the Portugal Golden Visa Program is the ability to travel visa-free within Europe’s Schengen Area. This provides a significant advantage for business and leisure travel.
Right to live, work, and study in Portugal
The Golden Visa Program grants the right to live, work, and study in Portugal. This opens up a wealth of opportunities for personal and professional growth.
Eligibility to apply for citizenship after five years
After five years of legal residency, Golden Visa holders are eligible to apply for full Portuguese citizenship. This can be done without having to relinquish any other passport the individual may hold.
Low physical presence requirement
The program has a low physical presence requirement, with investors required to live in Portugal for just seven days during each year of residency. This amounts to just 35 days over the five-year period.
Quality of life in Portugal
Investors and their families can enjoy the high quality of life that Portugal offers, including its excellent infrastructure, high-level security, and strong political stability. Portugal is also renowned for its local cuisine and wines, rich culture and heritage, and favorable climate.
The Investment Options Available
Capital transfer
Investors can choose to make a capital transfer of a minimum of EUR 1.5 million into a Portuguese bank account or approved investments.
Property acquisition
Investors have the option to invest in Portuguese property with a minimum value of €500,000. They can invest either as individuals or as joint legal entities. However, if the property is located in a low-density area, the minimum investment requirement is lowered to €400,000.
Alternatively, investors may choose to invest in Portugal property that requires restoration. In such cases, the minimum requirement decreases to €350,000. To qualify, the property must be either more than 30 years old or located in a designated area of urban rehabilitation. If the property is in a “low-density area,” the minimum requirement is further reduced to €280,000.
Business investment
Investors can choose to create a minimum of ten new jobs or invest EUR 500,000 for the incorporation or increase of the share capital of a company registered in Portugal.
Real estate and capital transfer options due to end soon
Under the “Mais Habitação” law, due to be enforced in September, the Portuguese Golden Visa program will no longer include the investment-related categories of capital transfer or real estate for residential purposes and rehabilitation.
Despite the conclusion of the program for these specific categories, the final version of the law explicitly states that all applications submitted before the new law’s implementation will be processed in accordance with the existing rules and regulations. Moreover, investors and their family members will have their renewal rights fully assured.
You are strongly advised to proceed with your investments at the earliest opportunity. By acting promptly, investors can initiate and submit their processes before the potential conclusion of the Golden Visa program (probably in mid-September).
Eligibility Requirements for the Program
To be eligible for the Golden Visa Program, applicants must be over the age of 18, make a significant investment beneficial to the Portuguese economy, have no criminal record, own the money they seek to invest, commit to maintaining the investment for at least five years, and make an average minimum stay in Portugal of seven days a year over the five-year period.
Application Process for the Portugal Golden Visa
The application process for the Portugal Golden Visa is straightforward and can be broken down into four basic steps. It’s important to note that the process may require the assistance of advisory firms experienced in handling Golden Visa applications.
A Step-By-Step Guide to Applying
- Sign a retainer agreement: This is the first step in the application process. The agreement is with an advisory firm, which will act as your advisor for the application, due diligence, and legal processes.
- Visit the Portuguese embassy: The next step involves visiting the Portuguese embassy to attest the required list of documents.
- Transfer the investment amount: The investment amount, along with any applicable fees, should be transferred into an approved Escrow account.
- Travel to Portugal: The final step involves traveling to Portugal to undertake the required biometrics and submit the application for permanent residence, along with supporting documentation.
Time Frame for the Application Process
The process to acquire a Portuguese residence permit through investment takes over 18 months. The first permit is usually issued for one year; however, following the Covid-19 pandemic, it is now issued for two years. Thereafter, the permit may be renewable for two subsequent periods of two years.
Role of Advisory Firms in the Application Process
Advisory firms play a crucial role in the application process. They provide strategic management support and private advisory services to international clients. They have a profound understanding of the needs of high-net-worth individuals and families and can help navigate the complexities of the Golden Visa application process.
Costs Associated With the Portugal Golden Visa
Understanding the costs associated with the Portugal Golden Visa is crucial for potential investors. These costs include the initial investment, government fees and other potential costs.
Breakdown of Government Fees
In addition to the initial main investment, applicants will also have to pay the following government fees:
- A processing fee of €533 for each family member included in the application
- A Golden Visa issue fee of €5,325 for each family member
- A residence permit renewal fee of €2,663 annually for each family member
- Variable fees for translation, legalisation (Apostille Stamp), or issuance of documents
Other Potential Costs
Other potential costs include fees for advisory services and guidance throughout the application process. These costs can vary depending on the firm and the level of service required. It’s important to discuss these costs upfront to avoid any surprises later on.
Family Inclusion in the Portugal Golden Visa Application
The Portugal Golden Visa Program allows for the inclusion of family members in the application. This section provides information on who can be included and the rights and privileges they enjoy.
Who Can Be Included in the Application
These are the family members who can be included in the Portugal Golden Visa application:
- Your spouse or partner.
- Children under the age of 18.
- Children over the age of 18 who are still financially dependent on you and are enrolled in full-time education and unmarried.
- Siblings under the age of 18 (either yours or your spouse/partner’s), provided you or your partner are their legal guardians.
- Dependent parents over the age of 55, either yours or your spouse/partner’s.
Rights and Privileges of Family Members Included in the Application
Any family member included in the Golden Visa application will receive a separate Portuguese residence permit card and enjoy the same rights and privileges as the main applicant. This includes the right to live, work, and study in Portugal, and visa-free travel within Europe’s Schengen Area. Portugal also accepts dual citizenship, and there is no mandatory requirement to renounce your original citizenship.
Validity and Renewal of The Portugal Golden Visa
Understanding the validity period and renewal process of the Portugal Golden Visa is crucial for maintaining your status as a resident.
Initial validity period
The Portugal Golden Visa is initially valid for one year. However, following the Covid-19 pandemic, it is now issued for two years.
Renewal Requirements and Process
After the initial period, the visa can be renewed for two-year periods, as long as you have successfully maintained your investments in Portugal. To maintain your Portugal Golden Visa after making your property investment, you are required to stay in the country for at least seven days during the first year and for fourteen days during years two and three, and again in years three and four.
The fact that you do not have to live in Portugal permanently to renew your Golden Visa or receive permanent residence or citizenship is one of the significant attractions of the Portugal Golden Residence Permit Program. After five years, you are eligible to apply for citizenship. Note that you can only apply for Permanent Residence if you are living in Portugal for more than 183 days per year.
Tax Implications for Golden Visa Investors
Understanding the tax implications is an important aspect of the Portugal Golden Visa Program. The taxes you pay in Portugal depend on whether you are registered as a resident or non-resident.
Taxation for Residents and Non-residents
Non-residents are not taxed on income deriving from their business operations abroad if they do not live in Portugal. They only pay tax for income obtained from business conducted within Portugal.
If you are a Portugal resident, you have to pay tax on any income obtained abroad. Income in Portugal is taxable if it derives from employment, pensions, director’s fees, investment income, rental income, and capital gains. The current tax rate in Portugal ranges from 14.5% to 48% (the latter for income higher than €80,882). All rental income in the country is taxed at a 28% flat rate.
Portuguese Non-Habitual Residence Tax Regime (NHR)
The Portuguese Non-Habitual Residence Tax Regime (NHR) is a regime that allows qualifying individuals to become tax residents of one of the “white-listed” EU jurisdictions while legally paying no taxes on most foreign-source income.
Portugal’s NHR allows high-worth investors to enjoy significant tax reductions and exemptions. An investor who retires to Portugal and becomes a tax resident in the country can benefit from these tax breaks for up to ten years.
The scheme was introduced in 2009 specifically to attract high-worth individuals. NHR residents benefit from a flat tax rate of 20% (reduced recently from a much less favorable 48%), with the possibility of receiving tax-free foreign income, including pensions.
Conclusion
The Portugal Golden Visa Program offers a wealth of benefits for non-EU nationals, including the right to live, work, and study in Portugal, visa-free travel within Europe’s Schengen Area, and the potential for Portuguese citizenship after five years.
The program offers a variety of investment options, making it accessible to a wide range of investors. The application process, while requiring some time and effort, is straightforward and can be navigated with the help of experienced advisory firms.
For those seeking a pathway to EU residency and potentially citizenship, the Portugal Golden Visa Program is an attractive option.
With its flexible investment options, low physical presence requirement, and high quality of life in Portugal, it’s a program that offers significant benefits for investors and their families.
If you’re considering making an investment that can provide you with these benefits, the Portugal Golden Visa Program is certainly worth considering.
