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 summarized everthing 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 and the best way to do the investment. 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:
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 investments options meet the criteria for the Golden Visa Portugal:
A lower density area which gives you a 20% reduced investment complies to the NUT3 level with fewer than 100 inhabitants per kilometre squared 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 deposite money in Portugal have to come from accounts in your name. You can not transfer money or make purchases frorm other peoples or company accounts
Low density areas Portugal
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 investement 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 at the real reaste section below. 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 Portuguse tax numbe rand 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 atorney.
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 transfered from an ccount 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 neccessary 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 youself. 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.
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.
The application for a Golden Visa is not a complicated process. Since the launch of the program many thousands applications were successfully approved. Nevertheless it is strongly recommended to hand the entire process into the hands of an experienced law firm. There are many internal SEF rules that are not public but are only known by experienced lawyers. They may cost more then other players in the market. But the money is well invested considering the overall amount that is invested the the Golden Visa project.
We work with highly experienced law firms that have a proven record of successful Golden Visa applications. Our partners work with packages which means they provide you with all the necessary services for a fixed price. This way there will be no unnecessary extra charges along the process and a guaranteed support in the following years.
The lawyer services for the Golden Visa in Portugal contain the following portfolio:
Buying real estate in Portugal is the most favorite option for most applicants to get the Golden visa in Portugal. Pearls of Portugal is specialized in finding the best real estate for Golden Visa applicants and making the purchase as cheap and safe as possible. We work 100% for you as a buyer agent and do not market an overprized portfolio. The market is our portfolio and we find the best offers in the market for you. We offer all services related to the purchase of real estate und bureaucratic processes for our customers. We quarantee of course absolute confidentiality.
We take care of all the necessary work like searches, viewings, price negotiations and also legal checks. This way you can easily buy real estate form abroad without the necessity to be in Portugal all the time.
One of the options to obtain the Golden Visa is to buy real estate in Portugal. This option is very attractive because the Portuguese real estate market is not only interesting for Golden Visa applicants but also for other international investors especially from Europe because of the low prices and high rents. Many Golden investors have only focussed on Lisbon to make their real estate purchase. However, Lisbon is only one out of many lucrative areas in Portugal to invest into real estate.
Portugal has developed in the recent years to a prime holiday destination in Europe with 26 Mio. tourists in 2019 (dinheirovivo.pt). The cities in Lisbon and Porto attract many tourists due to their good connection with low price airlines and cruise ships. The entire Algarve is a famous region for classical beach holidays. The atlantic coast of Portugal is among the top destinations wordwide for surfers. The national park Geres in the north of Portugal and the Douro are well known hiking. The wine regions of Portugal attract many tourists because of their wine excursions. Therefore besides to Lisbon you have excellent potential to do short term renting in the entire Portugal.
There is also an extremely high potential for long term renting. Many smaller cities have opened their Universities to international students which created a huge demand for student housings. In general their is a huge lack of housing in the cities. That is why international investors have started also to purchase real estate in this segment because the price are quite low and the rents have gone up resulting in a high rentability of for long term renting.
From our point of view there are strong reasons why real estate is a very good option to obtain the Golden Visa:
We simulated a business case for a 350k real estate investment for a short term (touristic) renting objective. The business was made under the following conservative and realistic assumptions:
Even with this conservative case the annual capital growth rate is 6,93% after taxes. Of course the succees of an investment depends on the purchase of very good real estate. We from Pearls of Portugal are specialized to find this kind of properties for our clients. If you would like to have a simulation for personal investment strategy please contact us.
The business case is an simulation based on market experience and market figures. Actual investments can vary in their results
The most popular investment option for the Golden Visa in Portugal is a purchase of real estate. There are 4 types of investment options. The invest of 500,000 EUR in any type of real estate and in any part of Portugal is the original and least complicated option. The amount is reduced to 400,000 EUR (20% discount) if the real estate is located in a low density area.
The third option is to invest 350,000 EUR in renovating a property that is over 30 years of age or located in designated urban renewal areas. The 350k is therefore the sum of the real estate and renovation costs. The fourth option is again a 20% cheaper investment of 280.000 EUR if the real estate is located in a low density area. The pros and cons of the investment options are described below.
Requirements: You have to invest a total 500 TSD EUR in Portugal regardless where and how many properties you buy.
Recommended real estate types: There are four recommended options in the 500k range. If you are intested in an optimal return of investment you should buy 2 apartments in the center of Porto or Lisbon for touristic renting or buy 3-4 apartments in Porto or Lisbon for longterm renting. If you would like to have a good return of investment and maybe would like to move to Portugal in the future you should buy a larger apartment in the center of Porto and Lisbon for touristic renting or buy a bigger house at the silber coast or the Algrave and rent it to tourists. You can also buy land (only) in the 500k option.
Evaluation: The 500k option is the savest in terms of the Golden Visa approval and also the option with the best return of investment perspective. Reselling in the cities is much easier and the markets grow better than other areas. Because of the high growth rates and the restrictions for touristic renting in Lisbon, Porto is currently the better choice to invest. Touristic properties can always be rented with good returns to the longterm market.
Requirements: You have to buy real estate in Portugal that has more than 30 years and that needs to be renovated. The renovation costs will be considered when applying for the Golden Visa program. So the 350 TSD EUR will be the sum of the real estate costs and the renovation costs. Instead of the 30 years can can buy a property that is located in a regeneration area. Due to the more complicated definition the house age is a far more recommendable option. The renovation have to be at least 20% of the cost of the property. So if the house costs 300 TSD EUR the renovations have to costs at least 60 TSD EUR.
Recommended real estate types: There are two recommended types of properties for this option. Either you buy one apartment to renovate in the center of Porto or Lisbon and rent it to tourists or you buy a smaller house to renovate in the two cities to renovate it and turn it into 2-3 apartments and rent them to tourist. You can also do long term renting with them in the local market.
Evaluation: The returns of renting will be good but not as high as in the 500k option with several properties because you have to invest more in one or max 2 properties to renovate. The option is still reasonable because you can buy a good real estate in the best areas in Portugal and usually the real estate should gain significantly value through the renovations. Such projects need to be approved by SEF as qualifying for the reduced investment amount and it is critical to ensure the right project and legal advice is obtained before embarking on such investment
Requirements: You have to buy real estate in Portugal that has more than 30 years and that needs to be renovated. The renovation costs will be considdered when applying for the Golden Visa program. So the 280 TSD EUR will be the sum of the property costs and the renovation costs. Instead of the 30 years can can buy a property that is located in a regeneration area. Due to the more complicated definition the house age is a far more recommendable option. The property has also to be located in a low-density are in Portugal.
Recommended real estate types: There are two recommended types of properties for this option. There a good vacation properties in the national parks especially in Gerês. So you buy a vacation property, renovate it and rent it to tourists with good to moderate income perspectives. The second option is to buy agricultural real estate with a house to renovate. This options is valid for land that have wine, olives or especial nuts like almonds or cork.
Evaluation: The cheapest option is reasonable with moderate return of investments. The low-density areas make reselling more complicated. The application process is also more complex. Such projects need to be approved by SEF as qualifying for the reduced investment amount and it is critical to ensure the right project and legal advice is obtained before embarking on such investment
Requirements: You have to invest 400 TSD EUR in one or more properties in a low density-area in Portugal.
Recommended real estate types: The best real estate for this option are bigger agricultural land with housings or touristic complexes like camping parks or small hotels.
Evaluation: This option is the least recommended option unless you are specifically interested in farming or larger touristic activities in the interior of Portugal. However the application is much easier than in the option 280k or 350k.
The 350k option for the Golden Visa was designed by the government to increase infrastructure renovations in the Portugal. To make this option more attractive the government reduced the total investment to 350k instead of 500k. If the investment is well made, the 350k option is a very good option not only because of the 150k that can be saved.
A 350k EUR investment implies the acquisition of a real estate asset with construction completed at least 30 years ago or located in an urban rehabilitation area, with execution of rehabilitation works for a total value of at least 350.000 euros. This amount can be lower by 20% if the property is found in a low density area.
The investments for renovation works are not very high in Portugal. Substantial renovations with new bathrooms, windows, floor, plumbing, electricity paintings are
Important are the rehabilitation works. Many applications fail because the investors underestimate the importance of showing the SEF (Immigration and Borders Service) the necessary documents or attempt to just do minor renovations in the real estate. The SEF only accepts fundamental renovations. Here are same important points to consider:
Real estate is an optimal choice to make profit during the your Golden Visa application. There are various solid ways to invest into the local real estate market. We summarized the main five of them. Investing into apartments and renting them to tourists is currently the most popular alternative among investors. However, if the Golden Visa investment is broken up into several properties you can also make a very good investment in the local renting market.
In contrast to other European countries, tourism and the renting of real estate enjoys a positive reputation in Portugal. Accordingly this is also promoted by the municipalities. As a private person you can very easily register a small business for rental purposes and apply for the nedded licences. This usually takes about 2 days.
From an Golden Visa investing point of view, apartments in the two major cities of Porto and Lisbon are the best options, but also real estate in the classic holiday regions such as the Algarve or Alentejo are particularly suitable alternatives. For apartments in the cities there are clear requirements for successful letting. Appropriate apartments must be centrally located with access to the subway. In addition, it must be a historic and renovated building in very good condition.
Established apartments generate an average of 25-35 TSD EUR per year. The management of theses apartment is taken over by professional administrators which manage of all important tasks of the rental. These are remunerated with 20-30% of your turnover. After taxes the landlord remains with about 65% of their turnover as profit. Corresponding properties are around 250.000 EUR as a minimum investment.
Commercial real estate had a rather weak development in the recent years. The purchase costs for good locations are therefore around 1000 EUR per square meter. Nevertheless the market is interesting as the conversion of commercial space to official living space has become much easier due to the lack of housing. This will soon lead to a sharp increase in conversions and thus in a higher demand für comercial places.
In addition, commercial real estate such as a shops is interesting because you can already acquire the appropriate real estate with fairly low budgets. Smaller stores cost around 35.000 EUR in the big cities. The gross return for related properties is around 10%, which is a solid return compared to more expensive Golden Visa investment opportunities. In addition, the commercial space can be rented in the long term and has no high renovation costs.
Similar to other European countries there is a very strong lack of housing in urban areas in Portugal. The rate of privatley owned properties used to be 95%. In recent years, the market has developed into a strong rental market. Particularly in demand are smaller apartments in classic residential buildings which are not located in the center but in connection with the inner cities.
The entry price for 2-3 bedroom apartments is around 150 TSD EUR and is therefore much more affordable than in other major European cities. The rents are usually at 8-11 euros per square meter. With the Golden Visa investment of 350 TSD EUR you can achieve a gross rent of approx. 2000 EUR per month.
Portugal is a classic holiday destination with a strong increase in demand from foreign tourists. The market for hotels and the supply of hotel real estate is correspondingly well developed. Objects with 10-20 beds can already be purchased with 400.000 EUR. Smaller objects can also be purchased much cheaper. Many investors focus less on a traditional main building but on the construction of mobile units through which the capacity can be successively expanded.
In addition to the efficient management of the hotel and the location the underlying concept behind capital investment is most decisive. There are a lot of classic hotels in Portugal. In order to prevail on the market, it is therefore necessary to occupy a niche or a strong feature in the market. This concept should already be considered when searching for the right property. For smaller budgets the construction of a hostel in the big cities or a pilgrim hostel in the north of Portugal is suitable.
Portugal has a long tradition in agriculture and is well known for its wine and olive oil production. There exist also many smaller markets with higher margins like cork trees or nuts like almonds that have stable markets. General fruits like oranges or all kind of vegetables are not recommendable because of the strong competition in Europe especially from Spain.
Farm land in Portugal is usually less expensive because the plots are located more in the interior parts of Portugal. This makes also the acquisition of houses much more cheaper as they are required for the Golden Visa approval.
Most applicants for the Golden Visa would like to have an overview of the total costs involved. Therefor we simulated the costs for the most popular options for a family of four for the real estate Golden Visa application. The cost overiew covers the acquisition costs and the applications cost.
Source: Martinez Echevarria
Source: Martinez Echevarria