Portugal has been a very popular topic of discussion for anyone discussing residency and citizenship in Europe. The country was once the sick child of Europe. But since it joined the European Union, Portugal has experienced a meteoric rise in its quality of life. The country is now a hotbed of start-ups and retirees. Many Europeans are retiring in Portugal due to its relatively warm winters, affordable cost of living, and favorable tax environment. The coast is particularly popular with British retirees and Portuguese people have now high English proficiency.
The last few years have seen the rise of the Portugal Golden Residency Program (ARI), popularly known as the Portugal Golden Visa. When the program started in 2012, there wasn’t much fanfare surrounding the program. The Canadian Immigrant Investor Visa dominated the Residence & Citizenship industry, but the suspension of the federal program was about to give new life to the US EB5 Investor visa. It was really five or six years later, when the first applicants started to receive their Portuguese citizenship without spending much time in Portugal, that everyone realized the real value of Golden Visa program. It was a BIG DEAL. You could gain EU citizenship within five or six years by spending only an average of 7 days a year in the country. In today’s global world, no one wants to be tied down to one place, and the Portugal Golden Visa was offering the flexibility that no other naturalization path in Europe would offer. Of course, UHNWI could bypass all the waiting by simply investing in the Malta citizenship program and the now-defunct Cyprus citizenship program. Malta’s citizenship by investment path to Europe is faster but much more expensive. Today, the Malta Exceptional Investor Naturalisation can provide you with EU citizenship in one and a half years but at a cash cost of at least $1m, money you won’t see again. In contrast, the Portugal Golden Visa started at roughly $300,000 in investment – money you’ll see again after five or six years.
Other paths to residency in Portugal either require less investment, like the Portugal start-up visa and the HQA, or none, like the Portugal D-7 visa. But most other paths to Portuguese citizenship require you to spend at least most of the year in Portugal. This is where the uniqueness of the Portugal Golden Visa applies. The Portuguese Nationality Law does not define ‘’the numbers of days” in years of residence. It simply states you must have at least 5 years of legal residence. The minimum stay in number of days is regulated by the resident permit you hold.
The Portugal Golden Visa is an average of 7 days a year, whereas the Portugal D-7 Visa is 6 months a year. But in the end, it depends on how long you’re planning to stay in Portugal each year (or in Europe). If you plan to relocate to Europe and your funds are limited, you might apply for a Startup visa or a D-7 visa. If you cannot commit to spending at least half of the year in Europe, then the Golden Visa or the HQA fits your profile.
Another important reason why Portugal is very popular is its favorable tax regime. The Non-Habitual Resident tax regime shields most foreign income from taxation in Portugal. An important thing to consider for Americans looking for EU citizenship is that NHR status doesn’t lapse once you become a naturalized Portuguese. If you were waiting for that EU citizenship before renouncing your American one to finally free yourself from US taxation, this can be a good plan. That’s why there are experts like us to guide you.
Why choose Portugal?
Portugal has become the main destination for Americans looking to obtain EU residency and citizenship. As a citizen of Portugal, you can relocate anywhere in the European Economic Area. As a resident, you can travel easily within the Schengen Area.
Here are the main reason why Portuguese citizenship is so popular:
- It offers an easy path to European Union citizenship. Like a few other countries in the EU, you can apply for naturalization after 5 years of residency. What distinguishes Portugal from the others is that while on a Golden Visa you don’t need to spend much time every year in Portugal. Technically, an average of 7 days a year can be enough. But as we will explain in the “Portugal Citizenship” section, it’s not necessarily as simple as advertised.
- Portugal is extremely safe. Lisbon’s homicide rate stands at 0.5 murders per 100,000 inhabitants. Compare that to Miami – at 18 murders per 100,000 inhabitants – and you have a place with 36x less chance of getting murdered.
- It has some of Europe’s warmest weather. Portugal has one of the warmest winters in Europe, with daytime temperatures around 60F.
- Low cost of living. In Portugal, you can pick up a property at any price. You can find one at $25,000 or $25,000,000. On average, property prices are lower than in other western European markets. If you’re coming from a US city, you’ll be pleasantly surprised by your purchasing power.
- A very advantageous tax rate. The NHR has significant pull across Europe. You can pretty much erase any tax liability on your foreign income while you’re a tax resident in Portugal. Even your Portugal income can be taxed at a very advantageous rate.
Taxation in Portugal
Portugal’s regular tax regime is on par with many of the other EU countries. The highest personal income tax bracket can hit up to 45% and sales tax/VAT are at 23% on most goods and services. Payroll and social security on salaries are capped at 35%. Local investment income, such as capital gains and dividends, are taxed at up to 28%. Corporate tax is relatively low at 21%. Portugal has no inheritance or wealth tax.
To become a tax resident, you must either be present for 183 days in a year or have residential ties in the country (meaning a property deemed your main home). If you have other homes in other countries, there may be a debate about whether Portugal is your main home.
The Non-Habitual Resident (NHR)
The NHR is available to foreigners that have not been habitual tax residents of Portugal anytime in the last 5 years. The special status is available for a period of 10 years and continues even after you become a citizen of Portugal. You will need to either spend 183 days in Portugal during the tax year OR have a property in Portugal available to you the whole year. This is where the Portugal Golden Visa combines very well with the NHR.
NHR on Local income
Employment and self-employed income are taxed at a flat rate of 20% for high-value professionals such as:
- Directors and executives of production, industry, services, and business companies;
- university teachers;
- engineering, IT, communication, scientific and related subject specialists and technicians;
- journalists and artists.
NHR on foreign income
Since 2020, foreign pension income has been taxed at 10%. Other foreign income can be tax-free in Portugal under certain conditions. Foreign employment income can be tax-free if it is taxed in the source state and not deemed to be a product of activities in Portugal.
Foreign investment income such as dividends, interest, capital gains and rental income, together with self-employment and professional income (in this case, only if derived from high value-added activities), can be tax-free if all the following conditions are met:
- it is taxed or is liable to tax in the source country according to the applicable Tax Treaty or to the OECD Model Tax Convention and is not deemed to have been generated in Portugal.
- it is not deemed to have been obtained in a tax haven by the authorities.
NHR status must be requested before March 31 of the year after you take up tax residency in Portugal.
|Type of Tax||Normal Regime||NHR|
|Employment Income tax||45%||20% on local income or none on foreign income if qualified|
|Corporate income tax||21%||21%|
|Investment Income||28%||28% on local income or none on foreign income if qualified|
Portugal Golden Visa
- Type: Investor Visa (min 5y hold)
- Financial Requirement starts at €200,000
- Processing time: 12 months
- Wait to Permanent Residency: 6.5 years
- Wait to Citizenship: 6.5 years
- Min Stay requirement under permit: average 7 days a year
The Portugal Golden Visa was launched in 2012 under the name Portugal Golden Residency Program. The program is known under the abbreviation ARI in Portugal and Golden Visa around the globe. Basically, the program offers temporary residence in Portugal to those that invest in Portugal. The temporary status can lead to permanent residence or citizenship after 5 years. If you’re approved, you can bring your family, including your spouse, civil union partner, children, and parents. Children of all ages can be approved if they are deemed “dependents” due to, for example, illness, mental issues, or simply because they are still in school. Even minor siblings can qualify if they are under tutelage. Parents can also qualify as dependents if they are financially dependent.
Portugal Golden Visa Financial Requirements
The program was amended in 2020 to reflect Portugal’s new economic objectives. Property prices in in-demand markets have been rising, so the government is applying cooling measures. From 2022, the investment amount has changed. You cannot make a qualifying residential real estate investment in Lisbon, Porto, or the coastal regions like the Algarve. Only residential investment in the Autonomous Regions of the Azores and Madeira or in the interior territories will qualify. Nevertheless, you can still invest in commercial real estate. We offer many similar properties to residential through our hotel projects. Instead of buying a condominium in Lisbon, you can purchase a “hotel room” that also generates income for you when you’re abroad.
- €500,000 real estate purchase in a commercial property or a residential property outside of Lisbon, Porto, or the coastal regions. (This applies to the other price ranges below.)
- €350,000 real estate purchase (including the costs of renovations) in properties older than 30 years or in an area of urban regeneration.
- €280,000 real estate purchase in properties older than 30 years and located in a low-density area, including the costs of renovations.
Other types of investment
- €250,000 donation in support of artistic production or in the recovery or maintenance of national cultural heritage OR €200,000 if made in a low-density area.
- €500,000 donation towards research activities of public or private entities that are part of the national scientific and technological system OR €400,000 if made in a low-density area.
- €500,000 investment in venture capital funds or other structured investment funds. The securities must have a maturity of at least five years, and at least 60% of the fund’s investment portfolio must consist of Portuguese companies.
- €1,500,000 in a Portuguese public debt instrument, securities, or share capital of a Portuguese company.
The artistic and scientific investments are often viewed as ‘’donations”, as recovering such investments is not easy. They are the lowest price points but are not very popular with investors. Most investors go for the real estate option or the fund options at €500,000.
Portugal Golden Visa Process and time frame
Approved applicants receive an initial 2-year resident permit. They can renew that permit for a 3-year permit after that. In essence, you will need to hold the investment until you change your status in the country, either when you obtain your permanent residence or citizenship. That usually means roughly 6 years. Investment in funds is negotiated with the funds themselves, and terms can vary from 6 to 9 years. Be careful to read the fine print, as there are often options for the fund to add an extra year in the terms.
The average processing time was 6 months before the Covid pandemic. The process was stretched to 9 months for a real estate purchase, because finalizing the transaction would take a few months versus simply transferring money to a fund or buying bonds. Due to the pandemic and the 2022 price change, the estimated processing time is reaching 12 to 18 months. This is mainly due to bottlenecks in booking biometric appointments.
Once you receive your initial resident permit, you will have to spend 14 days in Portugal during those 2 years (an average of 7 days per year).
Portugal Golden Visa Detailed Process
STAGE 1 – Before applying, you will need to select your investment option. Once this is done, you will need to open a bank account in Portugal and transfer the funds. Once you have all your documents, you can send your applications and part of the fees to the Serviço de Fronteiras e Estrangeiros (SEF).
STAGE 2 – After the request is pre-approved by the SEF, you will have to appear in person for an interview in any district of your choice. You will be asked to give your biometrics, finalize your investment, and produce documents proving the transaction. Booking the biometric appointment now takes a long time because demand largely outweighs the supply of slots.
STAGE 3 – After the SEF gives you your final approval, you will receive a residency card valid for two years after 10 to 20 days.
- Type: Passive income
- Financial Requirement: Show stable income of at least €7,200 a year
- Processing time: 2-3 months
- Wait to Permanent Residency: 5.5 years
- Wait to Citizenship: 5.5 years
- Min. Stay requirement under permit: at least 6 months a year
Less advertised than the Golden Visa, the Portugal D7 is the better option for those looking to relocate to Portugal. The financial requirements are also some of the most affordable on the continent and the least strict. The application process can be completed much faster than the Golden Visa.
To be eligible, you must demonstrate your ability to sustain yourself financially in Portugal without resorting to employment in the country. This is usually used by retirees living off their pension, but more and more businesspeople, freelancers, and remote workers are using this program. The program is often advertised online as the “Portugal Digital Nomad Visa”. This is technically incorrect, but the flexible nature of the financial requirements makes it possible for many people that can earn money remotely to qualify for the program.
The temporary status can lead to permanent residence or citizenship after 5 years. If you’re approved, you can bring your family, including your spouse, civil union partner, children, and parents. Children of all ages can be approved if they are deemed “dependents” such as due to illness, mental issues, or simply because they are still in school. Even minor siblings can qualify if they are under tutelage. Parents can also qualify as dependents if they are financially dependent.
Portugal D7 Visa Financial requirements
The financial requirements start at €7,200 a year, but this is rarely acceptable in practice. The actual amount of stable income depends on the family size and the location you are applying to. You also need to be smart in your approach, as renting an apartment for €10,000 a month when you are showing €3,000 a month of income will not make sense to the authorities.
The minimum financial requirement for the Portugal D7 Visa:
- €7,200 for the first adult;
- €3,600 for two or more adults;
- €2,160 per child.
This income can take the form of a pension, rental income, dividends, foreign salary, etc. You will need to show 6 months of monthly bank statements as part of the application.
The Portugal D7 Visa doesn’t require any investment in the country, but you will need to show you have accommodation in the country. This can take the form of a rental agreement or a purchase agreement. The rental agreement will need to be for at least 6 months, and preferably 1 year. Every time you want to renew your permit, you’ll need to have a lease agreement in place.
Portugal D7 Visa application process and time frame
Step 1 – The first step is to open a bank account and get NIF number in Portugal. This can either be done by travelling to Portugal yourself or getting our help in the matter by providing us with power of attorney to do so.
Step 2 – You then need to have accommodation in Portugal. That process can take some time, depending on your criteria. Airbnb and hotel reservations will not suffice. It’s advisable to sign an annual rental agreement.
Step 3 – Get an appointment at your nearest Portuguese consulate. Once you get a date, you need to present yourself and all the required documents. If everything is in order, you should get your approved D7 visa in a few days.
Step 4 – Travel to Portugal and register your arrival with the authorities. You will need to visit an SEF office and provide your address and biometrics. They will then give you a D7 resident permit, valid for 2 years.
Portugal Startup HQA Visa
- Type: Investor Visa
- Financial Requirement: Investment and donation
- Processing time: 1-2 months
- Wait to Permanent Residency: 5.5 years
- Wait to Citizenship: 5.5 years
- Min. Stay requirement under permit: at least one visit every 6 months.
The Portugal Startup HQA Visa is given to Highly Qualified Applicants in Portugal. What is referred to as the Portugal HQA program is an engineered product that allows applicants to receive sponsorship from a Portuguese university by funding their start-up ecosystem. At the same time, applicants can also open a company in the university Startup ecosystem and access numerous services on their own.
The temporary status can lead to permanent residence or citizenship after 5 years. If you’re approved, you can bring your family, including your spouse, civil union partner, children, and parents. Children of all ages can be approved, if they are deemed “dependents” due to illness, mental issues, or simply because they are still in school. Even minor siblings can qualify if they are under tutelage. Parents can also qualify as dependents if they are financially dependent.
Portugal Startup HQA Visa financial requirements
The Portugal Startup HQA visa requires at least a €175,000 investment. Of the amount, €5,000 will be used to capitalize your own company in the start-up ecosystem. You can invest more into a business activity in Portugal. The bulk of the amount, €170,000, will go to fund a university innovative Startup project, pay for 3 years of incubation for your company, and all the legal and immigration fees.
Portugal Startup HQA Visa application process and time frame
The HQA resident permit is renewed every 2 years. To renew, you would normally need to demonstrate you were living in Portugal for most of each year. But, as a businessperson, if your business activities require you to travel abroad, you can request an exemption from the minimum stay requirements.
Step 1 – Discuss your objectives with us, so we can plan for the best possible outcome. We’ll customize a plan based on your needs.
Step 2 – You need to have the investment amount in escrow. We’ll help you gather your documents and get your letter of support from the university.
Step 3 – You travel to Portugal. We’ll help you apply for residency at the SEF. In a few weeks, you’ll be asked to pick up your resident permit and provide your biometrics.
Portugal Startup Entrepreneur Visa
- Type: Entrepreneur
- Financial Requirement: have an innovative project
- Processing time: estimated 2-3 months
- Wait to Permanent Residency: 5.5 years
- Wait to Citizenship: 5.5 years
- Min. Stay requirement under permit: at least 6 months a year
The Portugal Startup Entrepreneur program provides residency in Portugal to innovative entrepreneurs who receive approval from an incubator.
The temporary status can lead to permanent residence or citizenship after 5 years. If you’re approved, you can bring your family, including your spouse, civil union partner, children, and parents. Children of all ages can be approved if they are deemed “dependents” due to illness, mental issues, or simply because they are still in school. Even minor siblings can qualify if they are under tutelage. Parents can also qualify as dependents if they are financially dependent.
Portugal Startup Entrepreneur Visa financial requirements
There are no minimum investment requirements related to the program, but the financial situation of the project should be coherent with its approach and objectives. It is up to the discretion of incubators in Portugal to decide if they are interested in endorsing your project. The qualifying factors are:
- the innovative nature of the project;
- its growth potential;
- scalability of the business in the market;
- the prospects that it will remain in Portugal after the program.
In addition, each applicant will need to have enough personal funds to support their stay in Portugal, in addition to having accommodation in the country.
Portugal Startup Entrepreneur Visa application process and time frame
Step 1 – The entrepreneur must identify and describe the project and its entrepreneurs. You should also upload relevant documents. You can also attach a presentation to help the incubator assess your project. After providing this information, the entrepreneur may send a request to one or more incubators, who will evaluate the project.
Step 2 – The entrepreneur must obtain a positive response from at least one incubator. The entrepreneur must complete the application information and make the submission through the online platform, for evaluation by IAPMEI. The information provided does not invalidate or replace the evaluation to be performed by the consular services and the Aliens and Borders Service within the framework of the entry visa or residence permit.
Step 3 – Once you receive your approval from IAPMEI, you can travel to Portugal with the remaining documents and apply for residency in Portugal.
Portugal Permanent Residence
Portuguese permanent residency is not required to apply for naturalization. Nevertheless, some decide to apply for permanent residency before applying for citizenship so they won’t need to renew their temporary residency while they wait for the naturalization process to be completed.
Permanent residency can be also obtained after 5 years of legal residency. The requirements are like that of Portuguese citizenship, but the language requirement is a bit lower.
- 5 years of legal residency
- Proof of A level (elementary) Portuguese language proficiency via a recognized certificate
- In the 5 years preceding the application, you cannot have a prison sentence of longer than 1 year.
- Proof of sufficient means by showing tax and social security declarations. You also need to have an address in Portugal.
In 2017, the Portuguese government amended its nationality law, reducing the 6 years of residence requirement to 5 years for naturalization. They also removed the need for applicants to demonstrate a strong connection with Portuguese culture, something that was left to the interpretation of immigration officers. Unfortunately, since then, the nationality law regulations have not been amended, which can still cause some officers to refuse naturalization applicants when they are deemed to simply be long-term tourists with no real roots in Portugal. This is unknown to most applicants that choose the Golden Visa as the path of least resistance; but be aware that you’ll need to do more than simply pass the language test and spend the average minimum of 7 days a year in the country. Fortunately, we’re aware of this glitch in the system and can ensure our clients won’t face any difficulties down the line. Many Golden Visa holders reach out to us in complete surprise after they’ve been refused. Fortunately, it’s possible to appeal the decision or simply reapply.
Portugal citizenship by naturalization
Naturalization of a foreigner can be done independently of the type of residence permit they hold. You do not need permanent residency to apply for naturalization, and the number of days you must physically present in the country is not specified in law. Instead, you must hold legal residency for at least 5 years. To be eligible to apply for naturalization, you need to:
- have at least 5 years of legal residency in Portugal
- be at 18 years of age or emancipated under Portuguese law
- provide a police certificate from the competent authorities of your country of nationality, and any countries where you have lived after the age of 16 years of age
- show proof of Portuguese language skill at a level of A2 (intermediate)
The process costs 250 Euros and normally takes 50 working days. Since the Covid pandemic, the process has taken 6 months for the authorities to issue a decision. The Portuguese passport is valid for 5 years and can even be applied for at the airport on the same day you arrive.
Many Americans and Canadians have Portuguese ancestry. Portuguese citizenship by descent is limited to grandparents. This means you can claim Portuguese citizenship by ancestry if you have at least one grandparent who is Portuguese.
Sephardic Jews who can trace their ancestry to Portugal before the expulsion of Muslims and Jews from the Iberian Peninsula can also claim Portuguese citizenship by ancestry.
Know that if you are claiming citizenship by ancestry from a grandparent or as a Sephardic Jew, you will need to demonstrate a link to the Portuguese community.
Otherwise, those that can claim Portuguese citizenship by birth are:
- the children of a Portuguese parent born in Portugal;
- the children of a Portuguese parent born abroad who declares the birth in the civil registry or requests Portuguese citizenship;
- persons born in Portugal to foreign parents of which one has resided legally in Portugal. This can be done at any time. This right is extended to the next generation only if the previous one completed it before death. No generations can be skipped.
- Persons born in Portugal who are stateless.
Portuguese Citizenship by Marriage
Portugal recognizes same-sex marriage and common-law unions. But be aware that you will need to show that status with a government-issued proof of civil union.
A foreigner married to a Portuguese national for more than three years can apply for naturalization. This can only be while the marriage is active. A divorce does not revoke citizenship.
You will need to show a link with the Portuguese community. This can be done if you have children or if you speak the language.
Portugal Dual citizenship
Portugal does not restrict dual citizenship. You won’t be asked to forfeit any other citizenship when you become a Portuguese citizen. You can hold more than one citizenship.
The Portuguese passport is one of the best in the world. Its market value is estimated at $558,000. As a Portuguese citizen, you can live and work anywhere in the European Economic Area. You also have visa-free travel to the US under the visa-waiver program for 90 days a year.