I. INTRODUCTION
In recent years many people from several nationalities have been moving to Portugal seeking for an unique fresh start. The country’s strategic location in the European Union (EU), along with advantageous tax and investment policies tailored for foreign investors, makes it an appealing destination for investors and those seeking new opportunities. As a gateway to the Schengen Area, Portugal offers a seamless connection to Europe, while also being a global player through its numerous international agreements and memberships.
II. THE ALLURE OF PORTUGAL
Portugal offers a diverse range of landscapes and lifestyles, making it an attractive place to live. Compared to many major worldwide, the cost of living is lower, which is appealing to retirees and those looking for a more affordable lifestyle. Furthermore, the country also enjoys a reliable and stable political system, grounded in strong democratic principles.
III. BENEFITS OF LIVING IN PORTUGAL
A. SAFETY AND HEALTHCARE Portugal ranks 7th on the Global Peace Index (2024), and it is recognized as one of the safest and most peaceful nations globally. Its healthcare system, ranked 12th by the World Health Organization, is known for its efficiency, accessibility, and quality of the care provided, in both public and private healthcare systems.
B. HIGH QUALITY EDUCATION AND TOP UNIVERSITIES
Portugal has developed an international reputation for its high-quality education system. Portugal’s universities are internationally recognized, especially in management and engineering. The country also boasts a high number of graduates, making it a hub for talent. Thus, according to the OECD, Portugal has become one of the main technological destinations and one of the EU countries with the highest rate of graduates.
C. OPEN ECONOMY
Portugal has established itself as a diversified and predominantly service-orientated economy, with a growing focus on technology and innovation. The industrial sector is undergoing a profound transformation, with robust investments in innovative solutions. Industries such as automotive, aeronautics, robotics, pharmaceuticals, MedTech and renewable energies stand out as pioneers in this modernization.
IV. WHY IS PORTUGAL SO POPULAR WITH FOREIGNER INVESTORS?
The property market in Portugal has seen significant growth across all the country, making it an ideal location for real estate investment offering lucrative opportunities for capital appreciation and rental income.
V. RESIDENT PERMITS IN PORTUGAL
Portugal offers several residence permits, including the ones for investment, working purposes, studying and family reunification.
VI. RESIDENT PERMIT FOR INVESTMENT ACTIVITY PROGRAM (ARI)
The Residence Permit through Investment (ARI) is intended for foreign citizens who do not have European citizenship and requires an investment in Portugal, which should be made and maintained for a minimum period of five years.
Residence permits are initially granted for two years and can be renewed each two-years.
They provide holders with:
a) A residence visa waiver for entering Portugal;
b) Free access to the Schengen Area (29 countries);
c) Possibility of family reunification;
d) Opportunity of exercising a professional activity or carrying out a business in Portugal;
e) Access to the health and education systems, in the same conditions applicable to a Portuguese citizen;
f) Access to justice; and
g) Possibility to apply for permanent residence for ARI holders, after holding the
temporary permit for, at least, five years; or citizenship after five years, if necessary,
requirements are met.
❖ INVESTMENT ACTIVITIES
An investment activity should be carried out by an individual or through a company (in the case of a limited liability company with a sole quota holder), for a minimum of five years.
The eligible activities are:
a) Creating at least 10 jobs: investors can either incorporate a company or invest in companies already operating/based in Portugal. Investors are also given the possibility of creating 10 mandatory jobs individually, i.e., without incorporating a company in Portugal.
b) Capital transfers of EUR 500,000 or more to be applied to research activities carried out by public or private scientific research institutions that are part of the Portuguese scientific and technological system.
c) Capital transfers of EUR 250,000 or more to invest or support artistic output
recovery or to preserve Portuguese cultural heritage.d) Capital transfers of EUR 500,000 or more to be applied into the acquisition of participation units in non-real estate investment funds or in venture capital funds incorporated in Portugal, focused on the capitalization of companies. For the said purposes, the relevant the funds should have a maturity of at least five years, and at least 60% of the invested capital should be carried out in companies based in Portugal.
e) Capital transfer of EUR 500,000 or more to be applied to incorporate companies with a head office in Portugal, combined with the creation of five permanent jobs. This value may also be applied to investing in the increase of share capital of a company already incorporated, combined with creating at least five permanent jobs or maintaining jobs at least 10 jobs, (with a minimum of five permanent employees) and for a minimum of three years.
VII. PERMANENT RESIDENCE PERMIT AND PORTUGUESE CITIZENSHIP
The ordinary residence permits, and the residence permits granted under the investment program (ARI) offers the possibility of applying for a permanent residence permit, as well as the possibility of application for the Portuguese citizenship, in accordance with the criteria set out in the Portuguese law.
VIII. TAXATION IN PORTUGAL
According to the Portuguese tax legislation, the taxation in Portugal may arise depending on factors which establish the connection to Portuguese jurisdiction of income, acts and contracts or transactions, as per the following:
a) Residence/source of income: Personal Income Tax (PIT) or Corporate Income Tax (CIT);
b) Location of immovable property: Real Estate Transfer Tax and Municipality Tax;
c) Place where the acts/contracts are celebrated: Stamp Tax;
d) Place where the transaction is carried out: VAT.
❖ Personal Income Tax
Residents in Portugal for tax purposes (only in case the ARI holders live effectively in Portugal) are taxed on their worldwide income at progressive rates varying from 13% to 48%, for 2025.
Non-residents (in case the ARI holders do not live effectively in Portugal) are liable to income tax only on Portuguese-source income, which includes not only that portion of remuneration that can be allocated to the activity carried out in Portugal but also remuneration that is paid/borne by a Portuguese company or permanent establishment (PE). Non-residents are taxed at a flat rate of 25% on their taxable income in 2025.
❖ The “new NHR”
The Tax Incentive for Scientific Research and Innovation (the so-called “IFICI”) is a Portuguese tax regime which entered into force on January 1st, 2024 and replaced the Non- Habitual Resident tax regime (NHR regime).
This is an interesting regime to explore in case the holder of the Golden Visa intends to effectively relocate and live in Portugal. Under this new regime, individuals that qualify as tax residents in Portugal and who have not lived here in the previous five years and, in addition, carry out, in Portugal, one of the scientific research and technological innovation activities established in law, may benefit from the following tax benefits for a period of 10 consecutive years (non-renewable):
o PORTUGUESE SOURCED INCOME
A special PIT rate of 20% on qualifying employment income (category A) and qualifying self-employment income (category B), from Portuguese source.
An exemption from PIT for income from abroad, namely, employment and self- employment income, investment income (e.g., dividends and interest), capital gains and rental income. The foreign pensions and income derived from blacklisted jurisdictions remain taxable, under this regime.
IX. THE ROLE OF LAWYERS IN THE IMMIGRATION AND TAXATION PROCESS
Navigating the immigration process can be challenging, but professionals like J+Legal specialized guiding expatriates through visa applications, residency permits, and tax matters. Our expertise ensures that all legal requirements are met, simplifying the process for newcomers.
X. CONCLUSION
Relocating and investing in Portugal offers numerous benefits, from financial incentives to an exceptional quality of life. Whether you are interested in investment, safety, or a new lifestyle, Portugal provides opportunities for a fresh start. Contact J+Legal to explore the possibilities and start your journey to Portugal and we look forward to welcoming you in Lisbon soon.
LOURENÇO CÔRTE-REAL
Senior Associate and Golden Visa Project
Coordinator
Corporate, M&A and private Equity |
Immigration
[email protected]
MARIA NUNES DA FONSECA
Associate
Tax & Private Clients | Immigration
[email protected]
