Portugal has long been a favoured tourist destination for Europeans, but thanks to some tax incentives introduced by the Portuguese government many tourists are now deciding to extend their stay.
Besides the obvious benefits of around 300 days of sunshine in the south coupled with the low cost of food and property, there are now three tax breaks that particularly appeal to retired people, foreign workers and business owners.
Tax Breaks for Pensioners
Foreign pensioners who stay in Portugal for at least 183 days per year can enjoy an exemption from paying income tax. This can mean a saving for some retirees of up to €30,000 euros a year. According to the Chamber of Commerce and Franco-Portuguese Industry, over 4000 people emigrated to Portugal from France last year, most of them of pensionable age.
Portugal is particularly attractive to the older generation due to the mild climate (kind to bones and joints!) and the fresh produce and healthy cuisine. In addition, the cost of living is generally 25% lower compared to the big European countries. And the safe environment, coupled with the friendly nature of the Portuguese – many of whom have excellent English, French and Spanish language skills – means Portugal is now among one of the top destinations for older expats.
Tax Breaks for Workers
For those who still work and are paying a high tax rate in their current country of residence, Portugal offers a tax category called a “non-habitual resident” where a low flat tax rate of 20% on earnings are applied.
This status can be kept for a maximum of 10 years and can be used by anyone in the following professions: actors, architects, artists, auditors, college professors, company managers and directors, computer technology and data processing professionals, dentists, doctors, engineers, musicians and scientists.
The other plus-point for workers is that rent and property prices in Portugal are very low, allowing many workers to live easily within their budget (and with the added advantage that many properties come furnished with either a private or communal swimming pool.)
Tax Breaks for Entrepreneurs
For non-European business owners looking for a quick way to take up Portuguese residency and take advantage of the tax breaks, there is a fast-track system called a Golden Residence Permit.
To qualify for this investor visa, the applicant must put in a minimum capital investment of €1,000,000 (this also includes investment in shares); create at least 10 jobs with the project; and acquire a property for a minimum of €500,000.
From a business point of view, Portugal has improved hugely in recent years now much of the red tape that bound the country previously has been cut – company incorporation can take as little as one day, licensing regimes have eased their requirements, and the buying and selling of real estate now follow much simpler procedures.
Golden Visa Portugal
The Golden Visa Programme in Portugal has proven to be the most popular scheme in Europe with Investors attracted to its ease and flexibility to obtain along with all the benefits it provides.
The visa programme was launched in 2012 and has been promoted by the government as an investment in real estate, there are several ways to obtain the visa with the most popular being an investment of 500,000 in to a freehold property in Portugal, there is a reduced version of this at 350,000 however there are certain criteria that must be met.
The visa allows you and your dependent family (Children & Parents) to gain a residency permit in Portugal for 12 months and is then renewed on a 2 yearly cycle, to qualify for renewal you simply have to spend a minimum of 7 days in Portugal per year. This visa will allow you to travel freely across Europe within the Schengen Zone.
The most attractive part of the visa is that after 5 years of title you can then apply for permanent residency within Portugal and after 6 years you can apply for citizenship, the basic requirements to qualify is the initial investment, a clean criminal record and the ability to spend a minimum of 7 days in Portugal each year, without the need to reside in Portugal this visa has become the most attractive and popular option across Europe.
Once residency has been granted you will have the right to live, work and study anywhere within the European Union, once citizenship has been granted you will become a European citizen and will have the same rights of anyone in Portugal.
Investment of 500,00€ or 350,000€ (reduced option)
Clean Criminal Record
No Requirement to Reside in Portugal
Permanent Residency after 5 Years for the whole family
Citizenship after 6 Years
EU Schengen Visa to travel freely from the beginning
Dependent Children & Parents all on 1 application
The most popular area for investment in Portugal in the Historical Centre of Lisbon, areas such as Baixa, Chiado, Principe Real, Cais Do Sodre and Santa Catarina are seeing continued growth and reinvestment by the government. The property market in Lisbon at the moment is very buoyant and in the historic centre there has been a huge amount of re-development over the last 4-5 years that will continue for the foreseeable future, one of the big attractions for investors is the returns from rental as tourism in Lisbon has grown from 6 Million per year to over 11 Million since 2006, with figures in 2017 up around 15%.
The Airport is now at capacity with over 24 million passing through it in 2016 and the government is trying to quickly push through a second airport to be finished by the end of 2019 to help lighten the load and allow more flights and routes into one of the fastest growing tourist destinations in Europe.
Source red. Eurostartenerprises.com