Friendly tax and residency rules add to the appeal of the Portuguese lifestyle
The beaches and lifestyle have attracted foreigners to the Algarve for years, but these days there’s another great reason to relocate to Portugal – favourable tax rules.
Non-residents, including Brits, who move to Portugal and haven’t been resident there for the previous five calendar years can qualify for a scheme that offers substantial tax benefits. Called the Non-Habitual Resident (NHR) regime, it was introduced in Portugal in 2009 to encourage wealthy individuals and families to move to Portugal to live and work.
As a qualifying NHR who is in employment or retired, you receive beneficial tax treatment for the first 10 years of living in Portugal – in fact, some retirees could find that their foreign pension income is tax free. Other tax benefits in Portugal include the absence of wealth tax – unlike some other European countries – and benign inheritance tax rules.
Meanwhile, foreigners from outside of the EU are taking advantage of Portugal’s Golden Visa Programme, a five-year investment-based residence scheme for non-EU nationals launched in 2012.
The investment can be made directly through an individual or a company in an EU member state with a presence in Portugal. The real estate investment option is €500,000, the Capital Transfer is €1million, and the job creation option requires the creation of 10 jobs. These are interchangeable. There is a physical presence requirement of seven days in Portugal in the first year, then 14 days over a period of two years.
To the end of September 2014, the Portuguese Government had exceeded its expectations for the take-up of Golden Visas, issuing more than 1,500 worth a total €950million, and with 80 per cent being granted to Chinese citizens.Read more