The Golden Visa has become an absolute success model for investors that seek - next to a good investment - a save and stable future for them and their family. Launched in 2012 the Golden Visa program has been actively promoted internationally by the Portuguese government.
We summarise everything you need to know about the Golden Visa program in Portugal into the most comprehensive guide in the market. We also dedicated a hole section to the local real estate market in Portugal, investment funds or the best way to start a company in Portugal. If you have questions or remarks just let us know!
There are many benefits for the Golden Visa program in Portugal. The main benefits are listed below:
Update February 2020:
Contrary to what has been widely disseminated in international news, the Portuguese Golden Visa program is changing, but it’s not over. Portugal remains one of the most wanted destinations in the world both for tourism and Golden Visa Programs. Within the discussion of the state’s budget, the Portuguese Parliament has approved an authorization to amend the Golden Visa Program legislation. This amendment constitutes in fact an opportunity both for Portugal and for international investors.
The Secretary of State to the Prime Minister has stated that in order not to affect any ongoing situations, these amendments could only enter into force in the beginning of 2021.
The Portuguese Non-Habitual Tax Regime grants qualifying individuals the possibility of becoming tax residents of a white-listed jurisdiction whilst legally minimizing income tax on certain categories of non-Portugal income for a period of 10 years. Golden Visa holders automatically qualify for the Portuguese Non-Habitual Tax Regime (NHR).
The Golden Visa in Portugal is extendable to family members like:
Any grown up who is not a citizen of the EU, EEA or Switzerland can apply for the Golden Visa. The applicants have to make an respective investment in Portugal and also have a clean criminal record. Currently the Golden Visa applications from Iran are suspended. The SEF does not accept the application for safety reasons which where not explained in more detail to the public. The Portuguese embassy in Pakistan is currently closed.
The requirements for the Golden Visa in Portugal are:
The following options meet the criteria for the citizenship by investment in Portugal:
A lower density area which gives you a 20% reduced investment complies to the NUT3 level with fewer than 100 inhabitants per squared kilometer or GDP per capita less than 75% of the national average.
Note that you can not get a bank loan or mortgage in Portugal to buy a property. You have to prove that you bring the capital 100% to Portugal. Of course you can apply for a mortgage in your own country.
The transfers to purchase the property as well as to deposit money in Portugal have to come from accounts in your name. You can not transfer money or make purchases from other peoples or company accounts
Along with the Portuguese Golden Visa application, several documents are needed
to obtain the Golden Visa:
The applicants need to show commitment to maintain their investment for a minimum of five years, plus evidence of their investment
The Portuguese Golden Visa application can be submitted online via the Portuguese Immigration and Borders Service’s (SEF) website. The application takes up to 6 months for approval.
You need the following certified documents from a Portuguese consulate or the embassy of your country translated into Portuguese
On top of those documents, you have to prove that you are committed to maintaining your investment for at least five years, as well as proof of your investment. Some examples of proof you can provide are:
First you have to realized the investment in Portugal. After the investment you can start to apply for the Golden Visa Portugal. The application is made by your lawyer and it takes up to 3-6 months for approval. If you also want to apply for your family members, it will be done at the same time. The first applicant pays 532,70 EUR processing fee, each additional family member pays 83,10 EUR.
You can find a cost simulation for the 350k and the 500k real estate solution for a family of four here. The general costs for a family of four without the investments costs a simulated below:
The application for the Golden Visa in Portugal follows a stricts process that has to be considered. Your lawyer will guide you through the enire process.
1. Decide how you want to make the investment - Before you apply for this visa, you need to have already made your investment. Investing in real estate can take anywhere between one to three months to finalize.Some options also include the renovation of a property. You do not need to wait until the renovations are finished as long as you can prove that you have already deposited the necessary funds in a Portuguese bank.
2. Start preparing and compiling your documents - You should start gathering documents for your application as it can take a few months to obtain them all. This can be done in parallel to finding the object in your investment category.
3. Get the Portuguese tax number and open a bank account in Portugal - You’ll need to get a Portuguese NIF and open a Portuguese bank account, as well.Both task can be done by you fast when you are in Portugal or remotely if you give somebody like Pearls of Portugal or a lawyer a power of attorney.
4. Finalize the investment - You have to decide on a concrete investment and transfer the funds needed to complete your investment to your Portuguese bank account. Please not that the money has to be transferred from an account in your name. Then you can do the investment. In the real estate option the final call should be done by the lawyer that is responsible for the application process.
5. Translate the necessary documents into Portuguese - The translation has to be certified by a Portuguese notary or a Portuguese consulate in the country of origin to meet SEF’s requirements.
6. File the initial application to the SEF - This steps should be done by a lawyer but you can also take this step by yourself. The Estrangeiros e Fronteiras (SEF) has an online portal where you can submit your application. You have to pre-register before you can apply.
7. Book your interview - Once you are pre-approved, you can then make your appointment. In bigger Portuguese cities like Lisbon and Faro, it can take up to three months to get an interview. If you schedule your interview in a less populated district, you might be able to reduce your waiting time.
8. Attend your appointment and a biometrics collection session - In your appointment, an immigration official will interview you, and they will collect your biometric data. If you are applying with your family, be sure to bring them along so that you can submit all of the applications simultaneously.
9. Wait for the final approval - Once your application has been approved, you will pay an authorization fee of 5324,60 EUR per applicant. After 10 days you will receive your residence card, which is valid for 1 year.
10. Use and renew the application - The residence card is renewable for two-year periods. In the second year you must submit your biometric data (fingerprints, etc.), present a current criminal record and pay a fee of 2662,30 EUR per applicant. In addition, the cost of the renewal process is 532.70 EUR for the main applicant and 83,10 EUR for each additional family member.
For the final application for the 4th and 5th year, you must submit your biometric data, present a current criminal record and pay a fee of 266,30 EUR per applicant. In addition, the cost of the renewal process is 532, 70 EUR for the main applicant and 83,10 EUR for each additional family member.
11. Become a Portuguese Citizen - After the last renewal process, you can renew your Golden Visa in Portugal or apply for a permanent residence permit, if you’ve maintained your investment and your minimum residency requirements.
1 - What is the NHR regime?
The non-habitual tax resident (NHR) status is a tax regime created to improve Portuguese international competitiveness. This regime targets non-resident individuals who are likely to establish a permanent or a temporary residence in Portugal. Golden Visa holders automatically qualify for the Portuguese Non-Habitual Tax Regime (NHR).
2 - What are the benefits of the NHR regime?
The NHR regime establishes, under certain conditions, IRS exemptions on foreign source income, as well as a limited 20% taxation of income from employment and independent personal services, in both cases if deriving from listed of high value added activities.
3- How do you acquire tax residence in Portugal?
Staying for more than 183 days in the Portuguese territory, whether these days are consecutive or not, in any 12-month period beginning or ending in a given tax year;
If staying for a shorter period in the Portuguese territory, on any day of the period referred above, a dwelling under circumstances that lead to the presumption of an intention to hold and occupy it as a place of habitual abode;
4- What is the procedure to register as tax resident in Portugal?
Registering as a tax resident in Portugal is a requirement to obtain the non-habitual resident status, which means that those wishing to apply for the regime generally must:
5 - For how long may you enjoy the NHR status?
Non-habitual resident individuals may enjoy the status for a ten-year period. After this period they will be taxed under the normal IRS tax regime.
6- Once you have the NHR status, what are the tax requirements?
After obtaining the non-habitual resident status it will be necessary to file annual tax returns in Portugal, stating your worldwide income and expenses.
7- For how long are the benefits of the regime granted?
The NHR status is granted for a ten-year period.
8 - What types of income are eligible for exemption under NHR regime?
Foreign-sourced passive income (interests, dividends, certain royalties, other income from capital, capital gains and income from immovable real estate) derived by NHR is exempt (without progression except in the case of capital gains on real estate) in Portugal, provided that it is potentially liable to taxation in the source State (i) under the rules of an existing Double Tax Treaty (DTT) or (ii) in the absence thereof, under the rules of the OECD Model Tax Convention if such income is not deemed to arise from a State, region or territory included in the Portuguese tax havens’ blacklist nor from a Portuguese source under the IRS Code territoriality rules.
Foreign-sourced income from pensions falls under the IRS exempt (with progression) if not deemed to arise from a Portuguese source under the IRS Code territoriality rules.
Foreign-sourced employment income is IRS exempt (with progression), provided that it is effectively taxed in the source State (i) under the rules of a DTT or in, the absence thereof, (ii) of the OECD Model Tax Convention, as long as such income is not deemed to arise from a Portuguese source under the IRS Code territoriality rules.
Foreign-sourced employment income is IRS exempt (without progression) in Portugal, provided that it is income derived from high value added activities of a scientific, artistic or technical nature and it is effectively taxed in the source State (i) under the rules of a DTT or in, the absence thereof, (ii) of the OECD Model Tax Convention, as long as such income is not deemed to arise from a Portuguese source under the IRS Code territoriality rules.
Foreign-sourced income from independent personal services is IRS exempt (without progression) in Portugal, provided that it derives from high value added activities of a scientific, artistic or technical nature, as defined by Ministerial Order, and is potentially liable to taxation in the source State (i) under the rules of an existing DTT or (ii) in the absence thereof, under the rules of the OECD Model Tax Convention, if such income is not deemed to arise from a State, region or territory included in the Portuguese tax havens’ blacklist nor from a Portuguese source under the IRS Code territoriality rules.
9 - What types of income are eligible for reduced rates under NHR regime?
Income deriving from employment or independent personal services of a domestic or foreign source but not qualifying for the mentioned exemptions will be liable to autonomous taxation at a special 20% flat rate and not to the general and progressive IRS rates (currently of up to 53% for yearly taxable income above € 250.000), provided that it derives from high value added activities of a scientific, artistic or technical nature.
CEO Frederik Pohl
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