Portugal

The European nation of Portugal is one of the oldest on the continent. Full of natural wonders, exquisite historical sites, mouth-watering cuisine, and unique culture, Portugal is one of the hottest tourist destinations on the continent and one of the best places for immigrants to pursue their dreams.

Geography and Climate

Portugal is the farthest western country on the European continent, sharing the Iberian Peninsula with Spain. Because of this location, it has access both to the Atlantic Ocean and the warmer waters of the Mediterranean Sea.

Portugal has beautiful mountains in the north that lead into rolling hills. The south, on the other hand, is characterized by rolling plains, leading to silky beaches.

Portugal has an archipelago of islands, being the Madeira and the Azores, world-famous for their natural habitats and beautiful scenery.

Portugal’s climate is the stereotypical Mediterranean climate, with a high amount of sunshine all year round, and because of this, an average temperature of over 18 degrees Celsius. The sea is warmest in the winter there, so going to the beach is always an option.

History and Government System

Portugal is a republic and has had a bloodless history on home soil since it was created. The monarchy was abolished in 1910, even though it has had a colorful century. Since 1982, Portugal has been a full democracy when the constitution was revised to remove ideological elements. The Chief of State is the President, who is directly elected for 5-year tenures.

Portugal’s foreign relations

Portugal has very warm relations worldwide, as they have one of the largest economic zones (the 3rd largest in the world) and are more focused on diplomatically dealing with any issues than taking any drastic action. This stance has come from the requirement to remain independent in the face of foreign adversity.

The Portuguese ability to barter has led them to have almost no political disputes over land with any nation, the only one being a small town with Spain.

Portugal shares a particularly close historical tie with the UK, the oldest military Alliance globally, dating back to 1386. This relationship is an excellent example of how they are astute at keeping stability, as maintaining this Alliance was tested when Portugal became a Republic in 1910.

Population and Language

Portugal has a population of over 10 million people, with a growing percentage being foreign-born. A large number of people retire here from all around Europe Not only because of quality affordable public healthcare but also because of the stunning weather and beautiful villas available.

The primary language spoken is Portuguese, but the people have a high rate of being multilingual, with many speaking English, Spanish, and French.

Portugal is 95% ethnically Portuguese; the rest being from a wide range of the world, particularly Northern Europe and Brazil.

Culture

Portugal has a rich and varied culture, dating all the way back to the Romans. They have an appreciation for the arts, with a great deal of music, drama, and dance institutes scattered throughout the country. All the villages have dancing areas, which gives a homely feel wherever you may go.

Football is the most popular sport, with many great careers in football coming out of Portugal, including the legendary Cristiano Ronaldo!

Economy and Currency

Portugal’s economy is strongly linked to the EU, as it is a member of the union and part of the Eurozone, with the majority of its trade going on within those boundaries. The economy is growing steadily and has set good monetary policy in line with the Eurozone’s averages. The official currency is Euro.

Conditions of Employment

With many companies moving from the UK to Portugal, the demand for languages other than Portuguese has increased, creating a welcoming environment for those from anywhere in the world with knowledge of any main European language.

If you have EU or EEA access or a Swiss passport, you won’t need a Visa, but outside of these areas, there are complications. Due to a saturated job market, quotas in place aren’t beneficial to those outside of the previously mentioned areas.

A Residence Certificate is required to stay in Portugal for more than six months.

Residence Permit

The Portuguese Golden Visa is designed to attract foreign investment to Portugal and speeds up the process for investors from non-EU countries for a residence permit.

This Visa is based on a real estate investment that can be lived in, or a more intensive path that requires the building of a business, with many other options such as the highly popular fund option; in which an applicant invests €350,000 into a Portuguese fund to claim the Golden Visa.

Included in the investment, which itself varies between €280,000 and €500,000, is the residency for your family. Besides your spouse, dependent children, even those over 18 who are still in study, along with dependent parents (aged 65 and over) can qualify.

In terms of real estate investment, the location and type of the property determine the minimum investment threshold:

• 500,000 euros or more for any property,
• 400,000 euros or more if the property is in a low-density area,
• 350,000 euros or more if the property is in an urban rehabilitation area,
• 280,000 euros if the property is an urban rehabilitation area and low-density area.

Work Permit

Once you have a residency permit, it becomes far easier to get work in Portugal as you will be applying internally rather than as a non-EU resident. This process will save having to risk a contract job that has short and potential volatile probation periods. Along with this, dependents will be able to work too.

Acquisition of Citizenship

Portugal has the most streamlined route to potential citizenship from gaining a residence permit, requiring very little time in the country itself. That process takes five years and a total of five weeks in the country. The process is quite simple, you spend one week per year in Portugal for five years and at the end of the fifth year, you are eligible to apply for permanent residency and citizenship. The minimum stay requirement of seven days per year to obtain citizenship is one of the factors that makes the Portuguese Golden Visa so attractive.

Guide to Buying Real Estate in Portugal

Buying real estate in Portugal is quite simple, you sign a purchase agreement, pay the amount, and the seller transfers the property to you. Buying real estate in Portugal for the Golden Visa, however, is more complex than that.

Since the Golden Visa has tiers and specifications for an eligible property you need to ensure that the real estate you are buying is eligible for the Golden Visa. You also need to ensure that you are getting good value for money and that real estate is not just a means to an end. Finally, you should buy real estate that you can make a financial return on, either through renting it out or selling it and making a profit through property appreciation after the five-year holding period is done.

All in all, you need good real estate in an attractive location that is also easy to liquidate at the exit. To find a property like this you need inside knowledge of the Portuguese real estate market, the knowledge we at Smart Citizenship have in abundance and are happy to share with you. We can find you the best property for your budget that allows you to apply for the Golden Visa, and even make a nifty profit off it throughout your holding period.

Who is eligible for residence?

Any person from any country with a clean criminal record can apply for residency through the residence by investment scheme.

Who is eligible for citizenship?

The requirements for Portuguese Citizenship after residence are concise, once the residence is completed, you will need to have three things to qualify for citizenship after gaining residency, which are:

• No criminal record,
• No unpaid taxes in Portugal,
• You have stayed in Portugal for the minimum period of seven days per year for the last five years prior to applying,
• You have passed a Portuguese language test.

Reasons to Invest in Portugal

If not for the villa, the stability of the country is really at the forefront. Even if it theoretically didn’t have a route to citizenship, it would still be a fantastic investment. You gain a second home in a social environment that is incredibly safe, with Portugal ranking as the 3rd safest country in the world according to the 2020 Global Peace Index.

Forbes has described Portugal as the best place to live and retire post-Covid, which is reinforced by the international buyers’ market improving during the lockdowns.

Here are some stats that highlight demographic, economic, and sector-specific attractions in Portugal:

• Portugal is economically in line with the rest of Europe and has had a growing GDP for over five years in a row now.
• Portugal ranks very highly in several sectors, particularly in Lisbon, which is ranked as the 3rd best accommodation, 4th in quality of Urban life, and 6th in the cost of local living. These are all from the Expat City Ranking 2020.
• These high rankings are reflected all over the country, which also had a knock-on effect of having one of the lowest crime rates in Europe, where according to the 2019 Global Finance Safety Index rankings, Portugal is the 4th safest country in the world.

How to Proceed in the Investment Process

Choosing the correct service firm is the most important part of beginning your investment process. Consider these criteria when choosing a firm:

• Understanding your investment needs,
• Finding you the investment that suits your investment and risk profile,
• Providing full investment and Golden Visa services under one roof,
• Adorning a customer-centric approach customized to your preferences,
• Possessing intricate knowledge of the Portuguese market and economy to provide you with investments that yield the best ROI,
• Providing you with a robust exit strategy in case you want to liquify your investment.

We at Smart Citizenship provide all the above and more; the easiest way to begin the investment process is by contacting us today.

Taxation

Portugal’s tax regime falls in line with EU regulations, meaning residents and citizens of the country get their tax’s worth in countless benefits. Living in Portugal for six months a year qualifies you as a tax resident. Here are some of the main taxes in Portugal;

Property Tax – annual property tax ranges from 0.3-0.8% depending on the type and value of the property.

Income Tax – income tax is bracketed in Portugal and is calculated based on the amount of income, as shown here:

Other Taxes – Portugal has other taxes such as inheritance tax (10%), capital gains tax of 28% for individuals and 25% for companies, If the money from a sale is re-invested, then only 50% of the net taxable income will be subject to capital gains tax.

Another interesting tax regime in Portugal is the non-habitual resident (NHR) route. You can apply to become an NHR to gain colossal tax incentives such as:

• Fall under a special personal income tax scheme for a 10-year period,
• Obtain tax exemption on most foreign-sourced income,
• Pay a 20% flat rate for certain Portuguese source incomes (from specific professions and from self-employment), as opposed to normal Portuguese income tax rates of up to 48%,
• Become part of a white-listed tax environment within the EU,
• A tax exemption for gifts or inheritance to direct family members,
• No wealth tax,
• Free remittance of funds to Portugal.

The conditions for becoming an NHR are quite simple and fall in line with the Golden Visa:

• You must have the right to reside in Portugal, and a Golden Visa is one of the options
• You must not have been a Portuguese tax resident in the previous five years, another box the Golden Visa and its limited residency requirement ticks.

To qualify as a non-habitual tax resident, an individual must be considered as a tax resident in Portugal in a certain year and cannot have been a tax resident in the previous 5 years. An individual is deemed to be a tax resident in Portugal if one of the following conditions is met:

1. More than 183 days are spent in Portugal in any 12-month period starting or ending in the fiscal year concerned; or
2. Having spent less than 183 days in Portugal, an individual maintains a residence suggesting being a habitual residence in Portugal in any period within the above 12-month.