Portugal Golden Visa or Residency Through Investment
The Portugal Golden Visa is one of the most popular residence-through-investment visas in Europe. It is issued to non-EU nationals who can make a minimum investment of EUR 250,000 in Portugal.
Started in 2012, the program proved to be hugely successful and has seen thousands of families relocate to Portugal. Also known as the residence permit program, the Portugal Golden Visa is a five-year residency-by-investment scheme that offers the beneficiary the freedom to live in Portugal and travel freely to any of the Schengen region countries.
The Portuguese golden visa program is renewable after one year and subsequently after every two years. One is eligible for citizenship after five years as long as they meet the stay requirements.
Portugal; officially referred to as the Portuguese Republic is a country with a rich history. Despite being one of the smallest countries in Europe, it stands out as a country of firsts. It is home to some of the first explorers like Vasco da Gama, Bartholomeu Dias, Alvares Cabral, Prince Harry, and Francis Xavier.
Portugal stands as the oldest of nation-states in Europe and the Iberian Peninsula. Since pre-historic times, the Portuguese territory was continuously invaded, fought over, and settled. Thanks to its influence, Portugal has left a legacy around the world with 9 countries adopting Portuguese as its official language with currently about 250 million speakers around the world.
Fun Facts About Portugal
- It was the world’s first maritime power
- Portugal is the longest-lived colonial empire having spanned 600 years
- Portugal was the first of European nations to practice trans-Atlantic trade
- Portugal is the most Westerly point in Europe
- Portugal has a standing record of the shortest reigning monarch; 20 minutes
- It is the oldest nation-state in Europe
- Over 80 percent of the country’s population are Catholics
- Portugal had the longest dictatorship in Europe from 1926 to 1974
- The country is a founding member of NATO
- The Portuguese people are fatalists, thanks to their ‘fado’ tradition that says no one can escape their fate
- Portugal is home to the world’s oldest bookshop. The Livraria Bertrand bookshop in Lisbon was founded in 1732
Location and Geography
Portugal is located on the Iberian Peninsula, South-West of Europe. It is bordered by Spain to the East and North and the Atlantic Ocean to the South and West. Portugal’s territory also includes two archipelagos; Azores and Madeira. The Tagus River splits mainland Portugal and flows from Spain to Lisbon before meandering through into the Atlantic Ocean.
Portugal’s Northern landscape is mostly mountainous and indented by several river valleys. The South, however, is mostly characterized by extensive plains. This includes the Alentejo and Algarve regions.
Mount Pico is Portugal’s highest peak and is located on Pico Island in the Azores. The ancient volcano measuring about 7,700 feet (2,350m) is an iconic natural phenomenon of the Azores. The Serra da Estrela, on the other hand, is the highest mountain range in the country at 6,532 ft (1,991m) above sea level. This makes it one of the main attraction sites for winter sports enthusiasts and skiers.
Portugal generally experiences a Mediterranean climate, but some regions experience other variations. This is all thanks to its proximity to both the Mediterranean and Atlantic as well as its unique position to the southwest tip of Europe.
The southern regions are sunny and dry with hot/dry summers and rainy/mild winters. This, however, changes as you head north where the weather patterns become wetter and cooler, especially during winter.
Snow is sometimes visible in the mountains to the northeast of the country. Generally, Portugal’s weather is enviable and thus a haven for those looking to escape their native harsh weather.
Azores Island, on the other hand, posts a moderate marine climate with some mild temperatures all year round. Subtropical weather is noted in Porto Santo and Madeira Islands that experience dry weather throughout the year.
According to the World Economic Forum, Portugal’s economy ranks 42nd globally. The country’s economy is largely dependent on international trade, especially within the EU. It uses Euro as its official currency.
Portugal has experienced steady economic growth for the last five years. In the second quarter of 2015, for instance, the country registered a yearly GDP of 1.5%. Since then, the trend has been similar and this has resulted in a continuous drop in unemployment rates. In 2019, for instance, the unemployment rates in the first quarter stood at 6.3%. This is a great improvement compared to 2014’s 13.9%. Despite the 2008 financial crisis, the country has managed to improve its GDP from 11.2% in 2010 to 0.5% in 2018.
Some of Portugal’s leading drivers of the economy include the following:
- Manufacturing – Lisbon Setubal, Porto, and Braga cities hold about four-fifths of the country’s industrial capacity. Some notable industries in these regions include oil refineries, cement processing, chemical industries, fish and beverage processing.
- Trade – Portugal is big on foreign trade. Some of the notable imports for the country include automobiles, beverages, crude oil, wheat, and raw materials. On the other hand, the country exports machine tools, transport components, textiles, footwear, clothing, wine, paper pulp, and tomato paste.
- Service Sector –This accounts for over three-fifths of the economy’s total output. Tourism, for instance, has grown to become a major pillar of the country’s economy. Tourists from Germany, France, United Kingdom, and Italy make a majority of visitors to the country.
Transport and Telecommunication
Most of Portugal’s main roads can be traced back to ancient times. However, this infrastructure was largely neglected in the 20th century. It was not until the 21st century that most of the main roads received some upgrades. This was made possible through funding from the EU. This saw the development of ‘auto Estrada’; a four-lane superhighway that connects Porto to Lisbon.
Other notable road links include a motorway linking Madrid and Lisbon and a four-lane highway that connects Algarve and Lisbon.
The Vasco da Gama Bridge was once the longest bridge in Europe at 12.3 Km before the Crimean Bridge came to being.
Portugal also has an improved railway system. The metro system in Lisbon was extended in the 1990s to operate outside the city limits. Porto, on the other hand, has a robust light rail system and a section of it runs underground.
Other notable improvements in the telecommunications front include the airways system with the country’s main international airport being Portela Airport in Lisbon. The country’s ports also contribute to the country’s transport system. Some of the major ports in Portugal include Lisbon, Setubal, Sines, and the Port of Leixoes.
Portuguese Tax System
Portugal is one of the few countries in Europe considered as tax havens. Here, you can easily manage your property and wealth thanks to the friendly tax environment that allows you to dispose of your property with full tax breaks. Portugal’s tax system operates both in the national and regional governments. By 2018, the country’s tax revenue stood at 34.9% of the GDP. The common sources of revenue include:
- Income tax
- Corporate tax
- Social security contributions
- Value-added tax
Employment income is subjected to a progressive income tax system for anyone in the workforce. For property owners, a property tax of between 0.3% to 0.45% applies, and these rates are decided by individual municipal assemblies.
Portugal has been a democratic republic since 1974, thanks to the Revolution of the Carnations in the same year. Through its constitution adopted in 1976, the country runs on a semi-presidential system. This means the prime minister and the president share executive powers.
The president is the head of state and is elected directly for five-year terms by universal suffrage. The president can only serve two consecutive terms. He is the commander in chief of the armed forces and can appoint or dismiss a prime minister.
The cabinet that includes the prime minister and other ministers of government departments forms the country’s main policy-making body. The prime minister, on the other hand, is mandated to direct and implement government policy and is traditionally the head of civil service.
Portugal operates on a code-based civil law justice regime. This is divided between administrative and civil courts. Notably, the country’s judicial system is formally independent of the legislative and executive branches. The Supreme Tribunal of Justice is the highest judicial organ in the country. However, there is also a Constitutional Tribunal that rules on the constitutionality of laws. It consists of 13 parliament-appointed justices.
The district court is the lowest level civil court and is subordinate to the Appellate Court. Notably, the judicial district courts are mandated with the greatest jurisdiction and work to issue initial judgments on any case brought forth. However, a party may consider appealing to the Appellate Court. In case of further disputes on the ruling of law at this stage, parties may appeal through the Superior Court of Justice. Any judgment issued at this level is final with no further room for appeal.
The Portuguese may share certain affinities with Spaniards; their neighbors, but they also have their unique way of life. This lifestyle and traditional way of life have, however, been transforming sporadically as the rural population keeps declining and the urban centers expanding.
The Portuguese have a long tradition of music; singing and dancing form a major part of their leisure time. In fact, almost every village has its own dance floor famously known as ‘terreiro’. Each of the regions in the country has its own style of music and dance, but most of their songs are slower compared to those of their Spaniard neighbors.
Traditional garments like the ‘samarra’ (Fox fur jacket) and ‘cifoes’ (equestrian leather chaps) are still a darling to most residents.
The Portuguese cuisine mostly consists of seafood thanks to its extended coastline that stretches 943Km. The seafood would be prepared traditionally using native spices in villages, and such preparation would vary based on regions. With modernization, however, restaurants have become the favorite eating spot for most residents.
Pathway to European Citizenship
Getting a Portugal residency by investment means that you and your family can enjoy equal residency and travel benefits in the Schengen area. Apart from this, you become eligible for citizenship after only 5 years of residency.
Since Portugal allows for dual citizenship, you can apply for it and comfortably enjoy all its trappings without necessarily relinquishing that of your country of origin.
During the 5-year period, in Portugal, you only need to spend seven days in the first year and at least 14 days for the next two-year periods. You are free to spend the rest in your country of origin or anywhere else outside Portugal. Additionally, you can apply for Portuguese citizenship after the expiry of the 5 years.
The benefit of Portugal’s passport is that it is ranked the 5th strongest passport the world over. This gives you the liberty to travel to over 183 countries across the world, visa-free.
Robust Real Estate Market
After the infamous financial crisis in 2015, Portugal is aching to get back up on its feet, especially in real estate. As such, the demand in this industry is increasingly getting higher by the day. This is a perfect opportunity for any investors in real estate looking to leverage on its future financial benefits through the golden visa for Portugal.
Improved education system
Portugal boasts of being one of the best education providers on matters in the EU region. After receiving your golden visa, you are free to enroll your dependent children in either private or public schools across the nation.
The healthcare sector in Portugal is also increasingly improving. As such, you and your family members will get to benefit from its universal and modern healthcare system.
One of the most attractive provisions for the Portugal Golden visa applicants is the income tax benefits they get to enjoy.
This is especially so if you are looking to get the best out of your financial contribution or investment.
As a Golden Visa Portugal holder, you are exempt from paying extra taxes on income earned outside Portugal.
On the other hand, you may choose to register as a fiscal resident for the sake of tax remittance in Portugal. This is an attractive option as it means you can benefit directly from Portugal’s Non-Habitual Tax Regime (NHR). Such an arrangement allows you to enjoy tax-free incentives on given categories for a maximum of ten years. Some of the notable sources of income that may qualify through the NHR program include:
- Income from real estate
- Capital gains from real estate disposal
- Occupational pensions
- Self-employment and business profits from eligible occupations
In addition to this, any income earned in Portugal is subjected to a flat rate of 20% in the first ten years. In addition, you can easily bequeath your wealth to a dependent or spouse without incurring any extra gift or inheritance taxes during the Portugal golden visa period.
Citizenship opportunity for dependents
Notably, all of the above benefits are also extensible to your dependents. The same case applies when seeking Portuguese citizenship. During your visa application, you can include the following dependents:
- Spouse or partner
- Children under the age of 18 years old
- Dependent children not more than 26 years old on full-time study and not married
- Parents of either partner but only if they are over 66 years of age.
- Siblings that you are legally responsible for. Must be under 18 years of age.
The visa requirements may change over time as legislation continually evolves, however, currently, the applicant must:
- Be over 18 years of age
- Be Non-EU, Non-EEA, and Non-Swiss
- Have a certificate from relevant authorities attesting to clean criminal history. This must have been obtained within the last three months
- Spend at least 7 days in Portugal during the first year of residency and at least 14 days for each of the subsequent two-year periods
- Make a significant investment (refer to investment options section) for the benefit of the Portuguese economy
- Be the owner of the funds being invested and should not be proceeds of corruption or criminal activities
- Commit to maintaining the investment for a minimum of five years
- Have a valid passport
- Duly fill an official application form for the golden visa in Portugal. This is available from Portugal’s golden visa portal
- Provide two passport-size photos that meet the Portugal visa photo requirements
- Submit proof of valid health insurance acceptable in Portugal
Each of these documents must be translated into Portuguese before submission for Portugal’s golden visa application.
There are three different primary ways for the capital to be invested.
a) Make a capital transfer of at least EUR 1 million in a Portuguese Bank account. This investment may be in form of share capital, securities, or public debt instruments. Investors can do this as sole proprietors or independent entrepreneurs and are required to keep the investment for at least 5 years.
Documents needed are:
- Declaration from a Portuguese registered financial institution attesting to the transaction. This transfer must be free from any obligations or charges.
b) Invest EUR 350,000 into research activities in private and public entities that form part of the national technological and scientific system.
- A declaration from a private or public scientific research firm confirming the investment for purposes of Portugal’s golden visa.
- A declaration from a certified Portuguese financial institution attesting asset transfer
c) Invest EUR 250,000 to support the maintenance of national cultural heritage or other artistic productions in the country’s rural or urban area.
Documents needed are:
- A Declaration document from the Portuguese Strategy, Planning, and Assessment office. This should state the consultations made by the institution to attest your investment in support of maintenance and restoration of national heritage.
You can choose between two real estate investment options:
a) Real estate with a minimum investment of EUR 500,000
Documents needed are:
- A pre-contract agreement or acquisition deed for the said property
- Declaration from a Portuguese registered financial institution to prove the transfer of the asset.
- The registration certificate for the land together with endorsements, records and other registrations applicable as proof of ownership.
- A legal description of the said property where applicable
b) Make a real estate investment of at least EUR 350,000 to help refurbish properties in an area of urban development or those older than 30 years.
Documents needed are:
- All above-mentioned documents
- Declaration from a state-recognized institution that proves the real estate investment property lies in a regeneration area.
There are two distinct options available to invest through business:
a) Create at least 10 jobs for Portuguese nationals.
These must be full-time jobs and the investors must show the ability to maintain this all through the residency period.
Documents needed are:
- Individual employment contract papers between the employees and the employer
- In case of a company shareholder, an extract from the registrar of companies
b) Invest EUR 350,000 for increase or incorporation of the share capital of a Portuguese registered company.
While at it, you must maintain at least 5 permanent jobs for three consecutive years.
Required documents are:
- A declaration from a Portuguese financial institution to attest the transfer of assets.
Notably, any minimum threshold for the above investment options could be reduced by 20% in case the funds are committed to a low population area of the nation. The low population density, in this case, is defined as one with less than 75% GDP per capita or that with less than one hundred inhabitants per square kilometer.
Portugal is big on education, and this has seen several programs adopted to suit international students. Its higher education system is divided between private and public institutions. Here, both universities and polytechnics focus more on theory and research. Some of the popular degrees for international students include masters in
- General Engineering
- Leadership and management
- Biomedical engineering
- Computer sciences
Popular universities for international students include:
- University of Porto
- University of Lisbon
- Polytechnic of Leiria
- Polytechnic Institute of Braganca
How to apply
Undergraduate students can apply online through their official higher education website. Graduate students, on the other hand, can apply through the official website of their chosen university.
Students can check out available scholarships for financing options
The process for Portuguese golden visas starts with the applicant making an initial visit to Portugal to complete a number of formalities.
Arrival in Portugal
On arrival, the applicant will need to:
- Meet and get orientation from lawyers to fully understand the initial application process
- Give powers to the attorney
- Make a final selection for the property and make reservations for the same
- Obtain a fiscal number
- Open a bank account
Required to have on you:
- Schengen visa and a valid passport
- A utility bill to prove address
- Bank statement
- Return flight ticket
- Credit card to help in payment of the various fees
- Passports of all dependents to be included in the initial application
Before going back to your home country, ensure the funds for the property have been transferred to your Portuguese bank account. This will help the lawyers to go ahead in completing the purchase of the property in case this investment option is chosen.Week 1
After all the documentation is in order, the investor, together with their dependents must travel to Portugal to provide their biometrics and submit their Golden Visa application.
After submission of the residency application, the Portuguese immigration services will analyze and certify the documents before approving or refusing the Portugal golden visa. Usually, this process takes between 6 and 9 months.Week 4
Residency card issue
Upon approval, you will be required to pay residency fees. You will then be issued a residency card within 4 weeks. This card will have a validity period of 2 years. During this period, you will be required to fulfill the residency stay of at least seven days per year.Month 6-9
Residency card renewal
The renewal of Portugal’s golden visa is relatively straightforward. During this time, the investor, together with his dependents, should travel back to Portugal as a physical presence is required.
During the renewal visit, the investors should:
- Prove that they stayed in Portugal for at least seven days per year
- Reassure that they still own the property or the minimum investment of EUR 250,000 is still intact
- Prove that they have not accrued any debts after their first approval for Portugal’s golden visa.
- Provide valid documents submitted during the initial application process
This is a program adopted by Portugal to award investors from outside the EU region with residence permits in Portugal after meeting the minimum investment requirements.
An applicant will need to invest at least EUR 250,000.
Applicants are taxed on their worldwide income only as long as they stay in Portugal for at least 183 days per year during the Portuguese golden visa. Through the NHR scheme, Portugal also offers an attractive tax-free incentive for up to 10 years, but this depends on your tax bracket.
Yes. With Portugal’s golden visa, Investors get an opportunity to generate at least 10 jobs through a Portuguese business. This comes down to 8 jobs in case the business is in a low-density area.
Not during the Portuguese golden visa period. The language test will only be applicable when applying for Portuguese citizenship.
Citizenship by investment requires that you maintain your minimum investment for at least five years. During this Portuguese golden visa period, you ought to have spent at least seven days in Portugal for the first year and at least 14 days for each of the subsequent two year periods.