Portugal may be famous for its Port wine, fado traditional music, Piri Piri flavours and soccer superstars like Cristiano Ronaldo, but here at Nomad Capitalist, we believe Portugal’s main attraction is one of the world’s best EU Golden Visa programs.
As a European Union (EU) member state, Portugal offers a high standard of living in terms of work, healthcare, climate, infrastructure, stability, safety, and education.
Portugal’s quality of life is a big draw for those looking to live in a European country. And for those who can afford it, Portugal’s Golden Visa program is one of the best options to do just that.
Technically speaking, the ‘visa’ is a fast-track Residence by Investment program that grants non-EU/European Economic Area (EEA) citizens a Portuguese residence permit in exchange for a five-year investment in the country. This ‘golden’ residence allows the holder to obtain citizenship several years down the road if they meet the qualifications.
As always, any information provided here should not be considered tax or legal advice.
Instead, you should use this information to consider whether Portugal’s residence program is a potential solution for your individual needs.
The History of Portugal’s Golden Visa
Portugal hasn’t always welcomed foreigners, but when the Great Recession of the early 2000s devastated its economy, the country looked outward for solutions.
On October 8, 2012, Portugal introduced the first Golden Visa program in Europe to attract foreign investors who could replenish the government’s coffers and reignite its real estate market.
More than a decade later, it is clear that the program has achieved exactly what it set out to do.
Since its inception, Portugal’s Golden Visa has attracted over 12,000 investors and injected more than seven billion dollars into the Portuguese economy.
It’s worth noting that over 90% of all applicants obtained their Portugal residence permit via real estate acquisitions, which has been by far the most popular form of investment until now.
Recent Portugal Golden Visa Changes
Many people have been asking if Portugal’s Golden Visa has been suspended. What has actually happened is that Portugal’s parliament has passed a budget proposal to amend the Golden Visa Program’s underlying laws.
The passing of new legislation in October 2023 has closed the path to Portuguese citizenship through property investment.
However, although the real estate investment option has closed, Portugal’s Golden Visa program is still open. The government also announced that the 6–18 month duration of the Golden Visa application process will now count towards the 5-year period for qualifying for citizenship.
So now, the five-year period begins on the day an investor submits an application.
The most significant and problematic change is that the property investment option is no longer available. This has left many investors pondering if this Golden Visa is still a promising option.
So, what now that real estate is off the table? Thankfully, some appealing options remain, including company creation, donation to research activities, and investment in venture capital and private equity funds.
Another blow to Portugal’s Golden Visa came when the Non-Habitual Residency (NHR) tax regime was withdrawn for individuals who become new tax residents of Portugal. Under new budget rules, individuals who become tax residents in Portugal in 2024 will no longer be eligible to register under the NHR tax regime.
This means that the once highly attractive tax advantages, including a 10% flat rate on pension income and 20% on income tax, are no longer available to new applicants.
Changes like this will not be news to seasoned Nomad Capitalists. These programs are constantly changing. Usually, they either close down completely like the Montenegro citizenship-by-investment program or, like Greece’s golden visa, go up in price.
In Portugal’s case, the government changed the NHR tax regime for the same political reasons, namely a housing crisis and rising inflation and bowed to public pressure over incentives for wealthy real estate investors. It’s an evolving situation, with the new government elected in early 2024 signalling it may take a different approach, so this is an area worth keeping an eye on.
Either way, despite the recent changes, Portugal remains a good option if you are willing to invest in other ways.
The Benefits of the Portugal Golden Visa
Portugal’s top-notch Tier A passport allows holders to travel to 191 countries visa-free as of 2024, making it the third most powerful passport, according to our Nomad Passport Index.
While your initial investment in a residence permit will not automatically get you citizenship, it will set you on the path towards it. And, at just five years, Portugal’s naturalisation timeline is one of the shortest in Europe.
You don’t, however, have to wait for citizenship to enjoy the travel benefits available. Your Portugal residency visa permit will grant you visa-free travel privileges within the Schengen Area and many other countries around the world.
Having the Portugal residency visa permit in most Schengen countries, including 22 European Union member states, will give you more legitimacy when applying for visas in other countries. This is a particularly attractive aspect of Portugal’s Golden Visa for those with limited travel privileges with their current citizenship.
Aside from the Portuguese passport granting you the right to live in Portugal and eventually obtain citizenship, your residency visa will also allow you to work there legally. In addition, as a resident of an EU country, you have the right to live and work in any of the EU/EEA countries.
So, if you’d rather spend your time working and living outside Portugal while you wait for citizenship by naturalisation, you can.
Portugal’s only condition is that you spend at least seven days in the country during your first year with your Portugal residency visa and 14 days for each of the following two-year periods before applying for naturalisation.
The program is also considered relatively stable and is widely supported by political parties in Portugal. Even as it has made changes, the government has made a concerted effort to communicate that the program is still in effect and that investors will not experience negative impacts.
You are safe to assume that the government won’t change its mind again tomorrow and kick you out.
And if you happen to have crypto investments, you won’t incur taxes when you trade or transact cryptocurrencies in Portugal. So, it’s not all bad.
Finally, if a Golden Visa isn’t an option for you, there are other ways to become a resident of Portugal, including demonstrating certain assets, getting a job in the country, or having a Portuguese spouse or domestic partner.
Compared to these other residence pathways, the benefit of the Golden Visa is that it allows you to bypass all the standard requirements.
But note that while the Golden Visa removes the language requirement for residence, you will need to know some Portuguese to become a citizen.
At its core, the Golden Visa’s true appeal is that you will be given preferential treatment during the immigration process in exchange for your investment in the country.
Portugal Golden Visa Program Investment Types
The Portugal Golden Visa program requires investing in a business or making a capital contribution.
While the real estate option is no longer on the table, other options include starting a company and hiring Portuguese workers or making financial contributions to institutions or businesses in Portugal.
Each of these paths entitles you to a Portuguese residence permit, renewable twice over the course of five years before you can apply for Portuguese citizenship.
Citizenship comes with all the rights attached to being a citizen of the European Union.
Here are the details for the different investment types:
A Golden Entrepreneur Visa
If you’re an entrepreneur, then the Portugal Golden Visa is an option. The entrepreneur option is one of the most overlooked aspects of the Portugal Golden Visa program.
The main requirement is that you create a company and at least ten jobs in Portugal (or eight full-time jobs in a low-density area) and register each employee in the Portuguese Social Security system.
Additionally, you can invest a minimum of €500,000 in an existing Portuguese business. This investment should create at least five new full-time jobs that must be maintained for a minimum of three years.
The taxes involved in this setup include corporate and personal income tax. The corporate tax rate hasn’t risen in the last few years and seems to have plateaued at 21%. The personal income tax rate is progressive from 14.5% to 48%.
However, entrepreneurs considering hiring in Portugal should know that it doesn’t offer the cheapest labour in Europe.
But, it is also not the most expensive labour around, with a minimum wage of €820 (US$890) per month as of 2024. The monthly salary averages around €1,400 ($1,500) but is significantly higher in Lisbon at approximately €3,755 ($4,000) per month.
Is the Golden Entrepreneur Visa for All Entrepreneurs?
Portugal certainly isn’t cheap compared to the Eastern European countries we frequently talk about, but the program may still be the right fit for you and your business.
It is best suited to certain types of entrepreneur, especially those who are growing their business and employing staff around the world.
If you want to hire in Europe, Portugal could be a prime location to source content creators, back-office workers, salespeople, web developers and the like. As long as you’re willing to pay your employees subject to Portuguese standards, you can hire just about anyone.
Even under that setup, your employees wouldn’t have to live in Portugal full-time. They may occasionally work at an office in Lisbon but also travel around. If they’re subject to Portuguese immigration and tax law, they won’t have to live full-time in Portugal.
You don’t have to live in Portugal full-time either. Since the Golden Visa Program does not require you to be a full-time resident, you won’t have to move yourself or your entire company to the Iberian Peninsula to qualify.
If you maintain your residency by spending at least seven days a year in Portugal, you’re set.
Long-term physical residence in Portugal is not required to maintain your Golden Visa residence permit.
However, Portugal’s entrepreneur program is not a great fit for the one-person business start-up. It is a better fit for entrepreneurs with a larger, growing business that can sustain ten employees over at least six years.
It’s also an excellent fit for someone running a business overseas but who doesn’t necessarily want to spend much time in another country, let alone live there.
For example, we recently had a client from the US who wanted to continue living in the US. They have around 100 employees and want to move some overseas. In his case, they could hire ten Portuguese employees and automatically qualify for the second residency without living in Portugal.
If you have a smaller operation, are on a tight budget, and are interested in living overseas, Lithuania or another European country might make more sense.
In some countries, you can get a residence permit by hiring a few employees. In others, you can qualify by simply running a business — no employees needed.
The Portugal Golden Visa Entrepreneur Program is not for everyone. Nevertheless, it is a good option for someone with more money and more staff. And for someone who’s willing to spend more to hire in Europe.
Making Capital Contributions with Portugal’s Golden Visa
Outside of the entrepreneur route, there are also various capital contribution options. In light of the recent changes, this option has become much more attractive for its simplicity, but it will cost you more.
Portugal Golden Visa Investments options include:
- €500,000 – Venture Capital/Private Equity Fund
- €500,000 – Donation to Research Activities
- €250,000 – Donation to Arts
All these investments must be maintained for the full five years of your residence.
Qualifying investment funds change as new ones are introduced and the sign-up period for others ends. There are specific funds set up for the Portugal Golden Visa investors, but you can also invest in traditional private equity funds or venture capital funds.
The ones set up for the Portugal Golden Visa investors will have a shorter fund term –five years until you get permanent residence or become a citizen – less risk and lower yields. In contrast, the traditional funds have a longer minimum required fund term and higher returns.
It should be noted that because of the Foreign Account Tax Compliance Act (FATCA), not all funds are available to US applicants for the program.
As is typical with investments of this kind, all applicants need to provide proof of investment to the government. Take care to save the paper trail for all transactions you make.
Portugal Golden Visa Requirements, Documents, and Fees
It’s essential to ensure you meet all the Portugal Golden Visa requirements when applying for the Portugal residence permit.
To be eligible, you must meet several Portugal residency visa requirements:
1. Be a Third-Country National
This requirement simply means that you cannot already be a Portuguese citizen or a citizen of any EU or EEA country.
Over half of all current applicants are from China, but that number has decreased as applicants from other countries such as Russia, Turkey, South Africa, Brazil, and others have grown.
Applicants from countries other than these top five have grown from 1.8% in 2015 to over 11% in 2021 — a testament to the program’s growing popularity.
2. Make and Maintain a Qualified Investment for a Five-Year Minimum
As the primary applicant, you must keep the investment as long as you and your dependants have Golden Visa residency status. However, once you become a permanent resident or Portuguese citizen, you no longer need to maintain the investment.
3. Fulfill the Minimum Residence Requirement
You must spend at least fourteen days in Portugal during your first two years as a resident. After that, you’ll need to renew your permit, which they will grant for the next three years. During that time, you’ll need to spend a total of 21 days in the country.
You just need to spend a minimum of seven days per year in Portugal under the program.
4. Provide Proper Documentation
When it comes to the paperwork, Portugal’s process is more straightforward than many Caribbean Citizenship-by-investment programs.
You can now apply online through their Immigration and Borders Services portal, Serviço de Estrangeiros e Fronteira (SEF). If you want to save yourself the hassle, you can also have a legal representative file on your behalf.
Regardless, it makes sense to have a good understanding of the Portugal Golden Visa application process.
There are a few moving parts and potentially some things that can go wrong if you’re not careful.
The application process requires that you submit personal documents as well as proof of your investment, including the following:
- A passport or other valid travel ID
- Proof of your legal entry into the country (i.e., Schengen short-stay visa)
- A certified copy of a background check from your country of origin or residence
- A completed permission form which authorises SEF to access your Portuguese criminal records
- Proof of health insurance to cover your stay in Portugal
- A declaration stating that you are compliant with the investment requirements
- Evidence that you are in good standing with the Portuguese Tax and Customs Authority and Social Security systems
- A statement from your Portuguese bank that confirmed the transfer of funds
- Proof of payment of the Portugal Golden Visa fees.
All documents must be dated within 90 days of submitting your application.
On top of those documents, you need to prove that you are committed to maintaining your investment for at least five years. Some examples of proof you can provide include:
- Employment contracts for jobs that you created within the country
- A bank statement that displays your capital contributions.
The SEF also requires that documents be translated by a Portuguese notary or by a Portuguese consulate in the country of origin.
5. Pay All Related Fees
The Portuguese government knows that its audience consists of wealthy investors who want a passport that offers access to the EU and is willing to pay for it.
This Tier A passport does not come without a hefty price tag.
In addition to your financial investment, every applicant, including any dependants, must pay a fee of €5,000 ($5,364). Fortunately, when you renew your visa, the fees are cut to 50% of the original price.
In addition to those fees, there is a €533 (US$571) processing fee for the principal applicant and an additional €83 (US$89) for each family member. The processing fees must be paid with the initial application and each renewal.
Qualifying dependants include the applicant’s spouse and children under 18 years old; children over 18 can qualify if they are unmarried and in school. Retirement-aged parents in the family can also qualify for this visa.
While the Portugal Golden Visa involves less paperwork than similar programs, it’s a good idea to get professional help to deal with the country’s bureaucracy and ensure everything is done correctly. Lawyer fees for the Portugal Golden Visa process can cost anywhere between €4,000 to €5,000 (US$4,291–5,364).
Again, this program is costly, but you need to consider it a price worth paying in order to get the best.
Portugal Golden Visa: FAQs
The Portugal Golden Visa program underwent some changes in 2023. As per the ‘Mais Habitação’ proposal of the Portuguese Parliament, applicants can no longer apply for a Golden Visa in Portugal through real estate purchase, capital transfer, or investment in funds that have direct or indirect links with real estate. However, other investment methods, such as investing €500,000 in a non-real estate-related fund, like investment funds, including venture capital fund investment or scientific research, remain valid.
The Portugal Golden Visa is a particular type of visa that can be obtained by investing a minimum of €250,000 in cultural projects. This visa allows the holder to travel visa-free within the Schengen Area, relocate to Portugal and even apply for EU citizenship. The real estate investment option for the Portuguese Golden Visa is no longer available.
There are many variables to consider when determining the best option for an investor looking to obtain European citizenship. The suitability of a particular program depends on the investor’s criteria. However, when comparing the Golden Visa programs of Portugal, Spain and Greece, Portugal’s program has long been the preferred choice.
Family members, including spouse, minor and dependant children, and dependant parents of the principal applicant, can also obtain a Portuguese Golden Visa through family reunification.
The waiting time for the Portuguese Golden Visa application is subject to change and largely depends on the overall wait period at The Agency for Integration, Migration and Asylum (AIMA). Currently, it takes upwards of one year or more to obtain your Golden Visa permit once you have made your investment.
If you have a Golden Visa in Portugal, you are not required to live in the country full time. You only need to spend at least seven days there during the first year and no less than 14 days in Portugal for the subsequent two years.
So, Is Portugal Still the Ideal Expat Haven?
Portugal’s Golden Visa offers a unique path to citizenship without the need for full-time relocation to Europe. At Nomad Capitalist, we believe avoiding the herd mentality is essential when choosing your ideal destination.
Many people wrongly believe that if they get a Golden Visa, they won’t have to pay taxes, but this is usually not the case. While Portugal was once the exception, allowing investors to drastically reduce their tax burden by becoming non-habitual tax residents of Portugal, this is no longer the case.
Holistic planning in light of such changes is essential. Comprehensive planning is necessary to successfully combine Portuguese residence and eventual citizenship with an effective international tax strategy.
You must ensure that everything is perfectly aligned to avoid tax trouble further down the line.
Our team has helped seven- and eight-figure entrepreneurs like you to successfully obtain Portugal’s Golden Visa. If you are interested in the program and how it could fit you, apply for a strategy call today.
