Launched in October 2012, the Portugal Golden Visa program allows non-EU citizens to gain residency permits by spending as little as two weeks in the country every two years. Designed to attract much-needed international capital following the 2008 economic crisis, this residency-by-investment scheme has been a great success, with almost 11,000 participants so far, around one thousand new applicants every year and over €6 billion raised.
With its superb climate and high quality of life, Portugal has long been a popular destination among expats and retirees alike. So what exactly is the Portugal Golden Visa program, and how easy is it to take advantage of it?
In brief, the advantages are:
- a range of investment options including real estate
- a requirement of spending just seven days in Portugal per year
- straightforward renewal after two years for a further three years
- visa-free access to all countries within the Schengen Area
- the possibility to apply for Portuguese citizenship within five years
Eligibility and Minimum Investment
Any non-EU/EEA/Swiss national can apply for the Portugal Golden Visa. Applicants must be at least 18 years old and hold a clean criminal record from their home country and from Portugal. The investment funds must arrive from outside Portugal, and made in one of the following:
- Real estate – further details below
- A minimum of €500,000 subscription in a qualifying Portuguese venture capital fund
- Capital transfer of a minimum of €1.5 million
- Formation of a company that creates a minimum of 10 new full-time jobs (or 8 in a low-density area)
- Investment of a minimum of €500,000 in an existing Portuguese business, where the incorporated business must create a minimum of 5 new full-time jobs for at least 3 years
- Donation of a minimum of €250,000 in preserving national heritage in Portugal, or a minimum of €500,000 in a research and development activity
The investment amount may be in the form of a loan from a non-Portuguese financial institution. Once permanent residency or Portuguese citizenship is attained, the investment is no longer necessary and may be sold or liquidated, as desired.
Real Estate Investment
Over 90% of all Portugal Golden Visa applicants have chosen the real estate investment option, and thanks to its booming tourism industry and high rental yields, Portugal is considered a prime destination for property investors.
To comply with the Portugal Golden Visa Program, the property must be worth over €500,000, or, if in an urban rehabilitation area, at least €350,000. These amounts can be reduced by 20% if the investment is located in a low-density population area.
Residential properties in Lisbon, Porto and other mainland coastal towns do not qualify in the scheme, although commercial properties in these locations do. Golden Visa real estate purchases are allowed in the country’s interior and in the autonomous regions of Azores and Madeira. Attractive destinations that qualify include parts of the Algarve and areas such as Braga and Guimaraes in the north-west.
Providing the minimum amount is met in total, several properties may be acquired. If multiple applicants are purchasing one property for a larger purchase amount, their investments may be combined, so for example, if two siblings purchase real estate worth €1 million, both may apply for the Portugal Golden Visa, as they are each spending €500,000 in total.
Necessary Documentation
It is highly advisable to retain a Portuguese lawyer or specialist agency to assist with the application process. The following documents are necessary to apply for Portugal Golden Visa Program, ideally issued within three months of your Golden Visa application submission:
- Copy of a passport or other government-issued travel document
- Proof of evidence of the qualifying investment, such as a deed or promissory sale agreement and proof of deposit payment, or proof of fund subscription
- Declaration from Portuguese financial institution confirming the transfer of funds
- Proof of healthcare coverage, either from the National Health System in Portugal or from an internationally covered insurance company
- Certified copy of the criminal certificate or a Police clearance letter from country of origin
- A completed form authorizing the immigration authority SEF to access criminal records in Portugal
- A sworn declaration on compliance with the minimum investment requirements for the necessary time period of five years
- Documents outlining good standing with the Portuguese Tax and Customs Authority and Social Security system, issued within 45 days of the form submission
- Portuguese Golden Visa application form
- Receipt of application payment
Documents can be legalized either by the Portuguese Consulate or by the Apostille of The Hague Convention. Original documents must be accompanied by a certified translation in Portuguese.
Portugal Golden Visa Government Application Fees
- Initial Application Fee: €5,325 per main applicant, dependents over 18 between €500 – €2000, and under 18 years old free of charge
- Renewal Application Fee: €2,663 per main applicant, dependents over 18 between €500 – €2000, under 18s free of charge
- Processing Fee: at beginning and renewal, €533 for main applicant, €83 for dependents
Please note: these fees were correct at the time of writing.
Family Life in Portugal
The application process is simultaneous for the main applicant and their dependents. These include spouse, children under the age of 18, dependent children under the age of 26, provided that they are full-time students and not married, and parents of the main applicant, if over 65 years old or 55 and dependent.
Golden Visa applicants may include their same-sex partners. Portugal is one of the most LGBT-friendly countries in Europe.
Applicants who live in Portugal full-time under the Portuguese Golden Visa scheme are required to have medical insurance. They will also enjoy full access to all public services including healthcare and education. State schools follow the Portuguese curriculum, but there are numerous private British and American international schools.
Obtaining and Renewing the Golden Visa
On successful application, an appointment must be scheduled with the immigration authority SEF to submit biometric data, or fingerprints. Approximately four months later, the cards will be ready, and valid for two years.
Between 30-90 days before the card’s expiration date, the SEF appointment must be repeated and any updated documentation, such as criminal records, resubmitted along with the application processing fee.
The renewed Golden Visa residence permit will be valid for three years, within which time at least 21 days must be spent in Portugal. At the end of the fifth year, there are three options:
- Apply for Permanent Residence in Portugal
- Apply for Citizenship in Portugal
- Continue with the Golden Visa temporary residence program
Those who decide to become a permanent resident or a citizen in Portugal are free sell or liquidate their investment if desired.
Become a Portuguese Citizen
The citizenship application typically takes anywhere from six months to a year, and Portugal allows for dual citizenship. Citizenship provides visa-free access to 188 countries and the ability to live, work and study anywhere within the European Union. In order to qualify, applicants must have:
- Passed a basic Portuguese A2 level language test
- No outstanding tax payments in Portugal
- Clean criminal records from Portugal and home country
Tax Benefits
The Portugal Golden Visa Program does not bring any tax responsibility unless over 183 days of the year are spent in Portugal, in which case, you become a tax resident in Portugal.
Through the Non-Habitual Residency (NHR) program, the country offers certain exemptions from income tax for the first 10 years of residence. In 2020 the program was revised, however, and now exempts foreign pensioners from getting tax breaks on their pension income.
Social Security contributions are not required, but private health insurance will be necessary to cover any healthcare costs in Portugal.
Real Estate Tax Implications
Buying a property in Portugal involves annual local taxes and, if the property is rented out, rental income taxes.
- Annual Local Taxes: Imposto Municipal Sobre Imoveis (IMI) is the annual tax rate paid by property owners in Portugal. The IMI tax rate ranges from 0.3 percent to 0.8 percent depending on the type, age and location of the property.
- Property Rental Taxes: Regardless of residency, the income from Portuguese property rental is always taxable in Portugal. The net rental income faces a flax tax rate of 28%, while maintenance, repair costs and IMI may be deducted from this tax amount.
In Conclusion
The Portugal Golden Visa has quickly become one of the most popular investment immigration programs in the world. If the idea of owning property in a country with a wonderful climate and quality of life, while enjoying the right to travel freely around the EU, the Portugal Golden Visa program might be right for you. Boa sorte!
