TAX BENEFITS

Golden Visa – Residence Permit for Investment (ARI/RPI)

Since 2012 Portugal has allowed non-community citizens from third countries not belonging to the European Union or the European Economic Area to enter and remain in Portugal if they are going to engage in investment activities in the country.

Investment in the property sector is one of the activities that provide access to RPI status. It can be used as an individual or via a company incorporated in Portugal, or in another EU state, with a permanent establishment in Portugal.

Investment conditions if made until the end of 2021

a. Acquisition of real estate must amount to €500.000 or higher, without any restrictions to the kind of real estate or to its intended use.

b. Minimum investment amount is reduced to €350,000, in case the property has been built at least 30 years ago or if it is located in an area of urban rehabilitation and the total amount of acquisition and rehabilitation works is equal to or greater than the referred amount.

c. The amount to be invested will benefit from a 20% discount should the property be located in an area of the country with a low-density classification.

Starting in 2022, such conditions to obtain a Golden Visa via property acquisition are restricted to:

a. Acquisition of real estate must amount to €500.000 or higher, without any restrictions to the kind of real estate or to its intended use.

b. Minimum investment amount is reduced to €350,000, in case the property has been built at least 30 years ago or if it is located in an area of urban rehabilitation and the total amount of acquisition and rehabilitation works is equal to or greater than that amount.

c. Should the property be intended for residential purposes, the investment will only be valid if such property is located in an area of the country with a low-density classification. This excludes the metropolitan areas of Lisbon, Porto and most of the Algarve region.

d. Investment in commercial properties can be made in any area of the country.

The application process for a Residence Permit for Investment begins after the investment has been made. After it has been accepted, beneficiaries enjoy the following benefits:

  1. Entering Portugal without a residence visa;
  2. Living and working in Portugal, with the obligation to remain in the country at least seven days in the first year and no fewer than 14 days in subsequent years;
  3. Travelling to the 26 Schengen states without needing a visa;
  4. Being entitled to family reunification;
  5. Applying for a permanent residence permit pursuant to the Foreign Citizens’ Law (current version of Law 23/2007 of 4 July);
  6. Being able to apply for Portuguese citizenship by naturalisation, if they meet the other requirements set out in the Nationality Law (current version of Law 37/81, of 3 October).

Text written in Q1 2020. Sources:
European Union; Portuguese Immigration and Border Service (Serviço de Estrangeiros e Fronteiras – SEF).

Tax scheme for non-habitual residents (NHR)

In 2009, the Portuguese government set up a tax scheme for non-habitual residents (NHR). The idea was to attract non-resident professionals engaged in high value-added activities or receiving income from intellectual or industrial property rights or know-how, as well as beneficiaries of pensions obtained abroad. The scheme is valid for 10 consecutive years and cannot be extended.

In general terms, the benefits for holders of the status are as follows:

Net income from employed or independent work received in Portugal for high value-added activities of a scientific, artistic or technical nature, as described above, on the part of non-habitual residents in Portugal

– Special rate of 20%, if the aggregation option is not exercised; plus an extraordinary rate of 3.5% – Double taxation on income received abroad is eliminated by the exemption method

Pensions and passive income received abroad
– Exemption from taxation in Portugal provided that they pay taxes in the source country in accordance with the double-taxation agreement, even if they are not taxed in the country of origin

Income from employment abroad
– Exemption from taxation provided that it is taxed in the source country in accordance with the double-taxation agreement, or, if there is no such agreement, if this income is taxed in the source country and is not considered to have been obtained in Portugal

Income from self-employed work abroad resulting from the provision of high value-added services of a scientific, artistic or technical nature
– Exemption from taxation, provided that it can be taxed in the source country and is not considered to have been obtained in Portugal.

Scheme’s main requirements

  1. Meeting the conditions for being considered a tax resident in Portugal;
  2. Not having been taxed as a tax resident in Portugal in any of the five years prior to the application;
  3. To have remained in Portugal for more than 183 consecutive or non-sequential days in any 12-month period starting or ending in the year in question; or
  4. Having remained less time, but owning and occupying a habitual residence in Portugal on any day in the said 12 month period.

Text written in Q1 2020. Sources: Decree-Law 249/2009, of 23 September; Portuguese Tax and Customs Authority (Autoridade Tributária e Aduaneira – AT), https://www.portaldasfinancas.gov.pt

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