Portugal is number one in Europe in terms of ease of residence.
The Portuguese government is hungry for foreign investment and offers a wide diversity of residency visa features designed to attract other types of people.
It is cutting-edge and adaptable, introducing new visa features such as its Digital Nomad Visa, introduced in October 2022, as a reaction to changing global migration trends.
It is also home to one of the largest golden visa systems in Europe. Portugal’s Golden Visa has generated more than $6. 5 billion since its inception in 2012.
The government has made changes to the Golden Visa, basically similar to minimum investment thresholds and geographical restrictions, which came into effect in early 2022.
Still, the show remains popular. However, the adjustments raise a question: if you need to perform abroad, do so when you can, as long as you’re eligible for the opportunity you’re considering.
You never know when you won’t be able to have that opportunity anymore, either because the needs are replaced and you no longer qualify, or because the opportunity is eliminated entirely.
In the face of this ever-changing situation, what are the characteristics of the residency visa for the average American who needs to do so in Portugal?
Your first option is to do it as a tourist. This allows you to stay throughout the Schengen area, adding Portugal, for 90 days in a consecutive 180-day period.
This can last 90 days straight in a Schengen country followed by 90 days outside the Schengen zone, or you can spend 30 days indoors and 30 days outdoors continuously.
To stay longer, you will need a residency visa. Here’s a look at the most productive residency features in Portugal and which option it’s best suited for.
The passive source of income or D7 visa allows third-country nationals to unload residency in Portugal simply by proving that they can count on a reliable and uninterrupted passive source of income (whether it is monetary investments, a pension, or a source of rental income). .
This visa is more suitable for other people who need to live in Portugal than for natural investors. This is the visa option used by most retirees, although it is not technically a retirement visa.
Officially, you must obtain a passive source of income equivalent to the Portuguese minimum wage, which is approximately $825 per month, to qualify for the D7 visa.
In reality, approval depends on the discretion of the immigration officer processing your application. A higher source of monthly income (around US$1,300) will increase your chances of approval.
A savvy immigration attorney can navigate those complexities.
If you follow this residency process, you will want to spend at least 183 days in Portugal, making you a Portuguese tax resident.
The visa is valid for two years, after which it can be renewed for 3 years. You will need to spend six consecutive months or 8 non-consecutive months in Portugal in order to renew your license.
Thanks to your prestige of residency in Portugal, you will be able to spend the rest of the year in the Schengen country of your choice. As a legal resident of an EU country, you can spend up to 90 days at a time in any other EU or Schengen country.
The Portugal Golden Visa program allows third-country nationals to obtain residency by making investments above certain thresholds in predetermined economic zones.
Designed to attract foreign investment, it is best suited for those who need a quick residency in Portugal with few strings attached.
It provides a minimum physical presence of only one week per year on average (i. e. , 3 five days for the five years of consistent permit validity). If you don’t need or can’t spend most of your time in Portugal, this is the option for you.
And unlike the D7 visa, you don’t necessarily want to be a tax resident of Portugal under the Golden Visa program.
As long as the investment is secured in Portugal, the Golden Visa apartment permit does not expire, as long as it is renewed. You will need to keep your investment for the purposes of the Golden Visa apartment permit.
You can qualify for Portugal’s Golden Visa program in 3 ways:
Starting and running a business is rarely an option for everyone, and making an investment in a country’s art or heritage is more of a gift than an investment.
Real estate is the simplest option, and qualifying in this way can be incredibly affordable: just €280,000. To be eligible for this amount, you will need to acquire an asset that is at least 30 years old and located in a low-density or underdeveloped area.
However, this restriction is very restrictive, as much of the country beyond Lisbon and Porto is eligible. The difficulty may be locating an asset in those spaces that is more than 30 years old and promoting it at a value sufficient to reach the threshold.
Many older homes across the country are in need of renovation and therefore have great prices. The cost of renewal may be included in your total investment to reach the Golden Visa threshold, but this means that you will have to opt for a renewal.
If you buy an asset that is less than 30 years old in a sparsely populated area, the investment required is €400,000. If you’re buying a new asset outside of a sparsely populated area, you’ll want to invest €500,000.
Investment in real estate advertising is geographically limited.
The Portugal Digital Nomad visa allows third-country nationals who self-hire or hire through a company that is not founded in Portugal to download residency. It is best suited for professionals who get their source of income online.
This visa requires you to earn 4 times the minimum wage, which is approximately US$3300. You will need to prove that you earned this amount within the last 3 months or more.
This type of visa requires you to spend 183 days per year in the country, so it also requires you to be a tax resident. You’ll want to submit tax residency documents with your application.
The Digital Nomad Visa is a one-year permit. If you continue to qualify, you can renew it twice for two years in a row.
Portugal is the easiest place in Europe to get a second passport through naturalization.
Regardless of the address you take to identify residency, you can get citizenship after five years of legal residency or 10 years of illegal residency.
Yes, you read that right. Portugal allows you to apply for citizenship if it turns out that you have been living in the country illegally for 10 years or more.
You’ll want to submit a Portuguese check as part of your citizenship application. You don’t need to be fluent; All you want is to have a fundamental knowledge of Portuguese.
Portugal allows you to have nationalities, which means that foreigners can download Portuguese citizenship without having to give up their previous citizenship.
In addition to being a very important step in the internationalization of your life, a Portuguese passport is a resilient document that allows visa-free access to 114 countries, a visa on arrival in 48 countries, and an Electronic Travel Authorization (ETA) in 3.
The tax burden of living or making an investment in Portugal is not necessarily greater than it may be in the United States. Sometimes it can be less painful. It all depends on how your profits are generated.
In general, a retired American does not have to pay more taxes on their retirement and/or their Social Security source of income than if they lived in the United States.
Portugal is lately proposing what it calls a tax regime for non-habitual citizens. This allows new citizens who have not been tax citizens of the country for more than five years to apply for a 10-year tax exemption. This means that the maximum of your source of income for those 10 years will be tax-free in Portugal.
If you have a portfolio that generates rental income, dividends, or interest income, you should dig a little deeper into the main points of the applicable tax code.