Typical view of the Algarve Coast, Portugal
Transfer of Tax Residence to Portugal: Residency by Investment and Portuguese Golden Residence Visa for Investors, Pensioners and Retirees
Portuguese Residence Permit for Investment Activity
("Autorização de Residência para Atividade de Investimento em Portugal")
Apply for the Portuguese investor visa
Description of the Portuguese Residency by Investment Program
The Residence Permit for Investment Activity in Portugal ("Autorização de Residência para Atividade de Investimento em Portugal", ARI, also known as Portuguese Investor Visa or simply "Golden Visa") offers to non-EU/EEA investors (i) temporary residence in Portugal and, after 5 years (ii) permanent Portuguese residence and, after 6 years (iii) Portuguese citizenship.
The Portuguese passport (which is valid for 5 years) and the Portuguese national citizen card ("cartão de cidadão") provide freedom of movement and residence in all states of the European Union (here) including Iceland, Liechtenstein, Norway, Switzerland, and the United Kingdom. In other words, Portuguese citizens can live and work in any country in the EU including the Schengen area.
The Portuguese passport follows the standard EU passport design, with a burgundy red cover that contains images of the Portuguese coat of arms. However, the most recent 2017 version features a set of 20 elements of the Portuguese UNESCO World Heritage throughout its interior pages.
The Portuguese passport gives visa-free travel (or visa on arrival) to 186 countries. Dual citizenship is allowed under Portuguese nationality law (that is, a second passport is possible in Portugal).
| Launch date | October 2012 |
|---|---|
| Promoter | Serviço de estrangeiros e fronteiras (SEF) |
| Popularity | Between 2012 and 2020, Portugal issued over 9,000 golden visas amounting to €5.5bn of total investments (plus over 16,000 investor visas for family members) |
| Composition (2012 - 2020) | 50% Chinese, 11% Brazilians, 6% Turks, 5% South Africans |
| Change of rules | September 2015 |
| Lifecycle (since April 2020) | Temporary residence permit issued for 2 years |
| 1st renewal issued for 2 years | |
| 2nd renewal issued for another 2 years |
What Are the Conditions to Get Citizenship in Portugal?
The Portuguese golden visa leads to Portuguese citizenship after 6 years of residence in Portugal, which is a relatively short waiting time when compared to other European residency programs:
Pathways towards European Citizenship in Comparison
- Golden Visa in Australia (here): Australian citizenship after 5 years
- Golden Visa in Gibraltar (here): British citizenship after 5 years
- Golden Visa in Austria (here): Austrian citizenship after 6 years
- Golden Visa in Greece (here): Greek citizenship after 7 years
- Golden Visa in Italy (here): Italian citizenship after 10 years
- Golden Visa in Monaco (here): monegasque citizenship after 10 years
- Golden Visa in Spain (here): Spanish citizenship after 10 years
- Golden Visa in Switzerland (here): Swiss citizenship after 12 years
Conditions for Acquiring Portuguese Citizenship
Anyone wishing to apply for the Portuguese citizenship (here) must meet these conditions:
- Be over 18 years old
- Have legally resided in Portugal for more than 6 years
- Demonstrate sufficient knowledge of the Portuguese language: Level A2 as per the CEFR
- Not have been convicted of a crime that is punishable in Portugal by a prison sentence of 3 years or more
- Not be involved in any activities related to terrorism
What Are the Key Benefits of Living in Portugal?
- Portugal's golden visa is among Europe’s most successful residency by investment programs to date
- It has no language requirements and upper age limits
- Portugal offers high-quality of life with an appealing climate (the average temperature is 17°C) and relatively low living and property costs in comparison to other major European cities
- Lisbon is Portugal’s business and economic hub, accounting for more than a third of national GDP amid a fast-growing technology and start-up scene
- With a 98% increase in prime real estate prices between 2010 and 2020, Lisbon has outperformed many other cities (except Berlin)
- According to a 2020 report by Savills (here), Lisbon's prime real estate market looks set to outperform other European cities in the near term
- In Portugal there is no inheritance tax and no gift tax between direct line relatives
- The Portuguese residency program gives permission to the entire family (including dependant children) to study and work in Portugal ("Family Reunification"). Children above the age of 18 are deemed dependant under the Portuguese Golden Visa if (i) they are unmarried (ii) unemployed and (iii) enrolled in an institution of higher education
- The Portuguese residency program provides visa exemption for the Schengen area (here) for the entire family
What Are the Key Downsides of the Golden Visa in Portugal?
- In 2014, the ARI program was shaken by a noisy corruption affair related to unsound practices when reviewing visa eligibility, leading to 11 arrests and the resignation of the Interior Minister
- The Portuguese SEF is known for its slow handling of golden visa applications (up to 6 months), a fact which was partly mitigated by the hiring of 140 new staff at Portugal’s Border Agency in 2016
- In January 2019, the Portugal's golden visa program survived defeat in a parliamentary vote after heavy criticism by left-wing party Left Bloc (8.3% of seats)
- In April 2019, the Portuguese Minister of Foreign Affairs said that the Portuguese residency program was "useful and should be preserved" while some improvements were needed, in particular effective tax sharing about golden visa holders (following OECD recommendations)
- In 2020, the Portuguese Government decided to exclude from the golden visa program real estate purchases in Portugal’s largest tourist hubs, including the Algarve coast, Lisbon, and Porto (here) effective 01.01.2022
- In November 2022, Portuguese Prime Minister Antonio Cosa said that several visa schemes offered by Portugal were being re-evaluated. In particular, he said that the
Portuguese golden visa "probably has already fulfilled [its] role and, at this moment, is no longer justified"
(here). However, later in November, Portuguese MPs, including Costa's own Socialist Party,
voted against ending the golden investor visa
(here), without, however, reaching a conclusive agreement about its future - which remains uncertain, in our view.
What Are the Physical Presence Requirements in Portugal?
| Application for permit | Required (open bank account, select property, submit biometrics) |
|---|---|
| First year | Not less than 7 days |
| Subsequent years | Not less than 14 days |
How Much Is the Personal Income Tax in Portugal?
| Income | Progressively up to 48% |
|---|---|
| Investment, rental income, interest, capital gains | 28% (the rate is 35% if the income derives from a tax haven) |
| Capital gains on shares | 28% (exemption of 50% on disposal of micro and small cap) |
| Inheritance / gift tax | 10% (on Portuguese assets only if transmitted outside the direct family) |
> Exemption from inheritance and gift tax ("imposto do selo") applies if the heir is the spouse, descendant, or ancestor of the deceased.
> Principle: residents are taxed on their entire worldwide income while non-residents are taxed on their Portuguese-source income only
What Is the Portuguese Non-Habitual Residency (NHR) Status?
- Individuals that were not Portuguese tax residents in any of the 5 years before becoming Portuguese tax residents may request a special, "non-habitual", tax residency status for 10 years
- Non-habitual residents (NHRs) are since 2010 exempt from tax on certain foreign-source income (such as rental, interest, royalties and dividend income, in addition to capital gains) if the income may be taxed (as per a DTT or the OECD Model Convention) in the source country which, however, must not be a listed tax haven (here)
- The Portuguese NHR exemption regime applies for 10 years provided that the individual continues to meet the criteria (> 183 days in Portugal and/or primary residency in Portugal as at 31 December of any given year)
How Much is the Real Estate Tax in Portugal?
| Property tax (IMI) | 0.3 - 0.8% p.a. (the tax is 7.5% if the owner is located in a listed tax haven) |
|---|---|
| Additional property tax (AIMI) | 0.7% p.a. (the tax is 7.5% if the owner is located in a listed tax haven) |
| Stamp duty | 0.8% (typically paid by the buyer) |
| Real estate transfer tax (IMT) | 6% (typically paid by the buyer; the tax is 10% if the buyer is located in a listed tax haven) |
| Brokerage fee | 5 - 6% (typically paid by the seller) |
How much Is the Corporate Income Tax in Portugal?
| Income, capital gain | 21% |
|---|
What Are the Conditions to Get the Portuguese Golden Visa?
1) Investment (personal or via company) of €1,000,000 (without credit) into Portuguese public debt (i.e. treasury bonds) via a Portuguese bank.
> The Portuguese government bond route accounts for approximately only 5% of all Portuguese golden visa applications.
> Portuguese 5-year government bonds currently (21Q4) yield -0.10% p.a. The credit rating of Portugal is BBB as per S&P.
OR
2) Purchase of Portuguese real estate worth €500,000 (residential or commercial, in personal name or via a HoldCo, including co-ownership) for a holding period above 5 years, free of charges as evidenced by a (i) property SPA (ii) proof of transfer of the full purchase price via a Portuguese bank (iii) a certificate from the Portuguese land registry.
> The "Portuguese second home" real estate route accounts for approximately 95% of all golden visa applications in Portugal.
OR
3) Purchase of Portuguese real estate worth €350,000 with construction dating back more than 30 years or located in an urban regeneration area, for refurbishing.
OR
4) Capital transfer of €500,000 for purchasing shares in investment funds or venture capital geared to capitalize small and medium Portuguese companies that, in turn, must present a feasible capitalization plan.
What Are the Required Documents for the Portuguese Golden Visa?
- Proof of absence of conviction for a crime punishable by a sentence over 1 year in Portugal (for all applicants) not older than 3 months, certified and translated into Portuguese
- Proof of adequate health insurance not older than 3 months (for those applicants who plan to settle in Portugal)
- No alert in the Schengen Information System (SIS)
- Application for a Portuguese Fiscal Number ("Número de Identificação Fiscal" - NIF), that is, the Portuguese TIN (here), which is necessary for buying Portuguese property, open a Portuguese bank account, getting a Portuguese credit card, or signing a Portuguese mobile phone contract
- TIN from home country (here)
What Are the Costs of the Portuguese Golden Visa?
| Due diligence and handling fee | €15,000 (includes property search and personal bank account opening in Portugal) |
|---|---|
| Government processing fee | €533.90 |
| Permit issuance fee | €5,336.40 (per person) |
| Permit renewal fee (after 2 years) | €2,668.20 (per person) |
| Timeline (from execution of SPA to final approval) | 4 - 6 months |