The Golden Visa is an immigration opportunity offered by many European countries. We want to talk about one of the young developed states – Portugal. After all, holders of a golden visa in Portugal can take advantage of seven undeniable advantages, which will be discussed in the article.
That’s right – we called Portugal a fashionably developed country. Despite a long history, it was in the 21st century that Portugal began to actively defend its economic and political position. The country’s leadership changed, and new attractive laws were written. Some of them guarantee a high standard of living for foreigners, the right to obtain citizenship in just 5 years, and the benefits of investing in real estate and business.
The new vector of work is aimed at expanding the benefits of the investment document “Golden Visa”, which is issued to people investing in Portugal. It is necessary to invest in real estate (any objects are suitable, special attention is paid to dilapidated buildings). You can buy government bonds, shares of Portuguese companies, or participate in the expansion of jobs.
Let us tell you what the essence of the Golden Visa. It is a way to move permanently in the country as a tax resident. The investor is granted a residence permit for Portugal in exchange for an economic infusion. The residence permit is not only an opportunity to start a new life in a developed country but also the opportunity to travel around Europe.
About the program at a glance
The Golden Visa was introduced by the Portuguese government in 2012. It was a reaction to the crisis of 2008: the country’s GDP had fallen seriously, unemployment remained high, and the real estate sector was bankrupt. The golden visa could offer foreigners a residence permit, and in return, it asked for investments in critical areas of the economy. For 4 years a golden visa managed to stabilize the economy a little – the GDP grew by 3%. And now the program attracts an additional 800 million euros thanks to foreign investors who want to get citizenship in Portugal.
From 2012 to 2020 a total of more than 6 billion euros has been attracted, which has helped to revive the economy and particularly affected the growth of the real estate market. So far, 10 thousand investors and 15 of their relatives have received a residence permit. The countries from which investors come are China, Turkey, Brazil, South Africa, and Russia.
The program is constantly changing, mainly due to the stabilization of some regions and the deterioration of the situation in others. So, people who invest in priority areas get more benefits.
Examples of innovations:
- Reduced the investment threshold for homes and buildings over 30-35 years old.
- Reduced threshold for investing in properties that are located in economically depressed areas, rural areas, and low-density communities.
- For the renovations need to invest a minimum of 350,000 euros (in Greece, for example, from 500,000 euros).
- The minimum amount to invest in any other object – 500 000 euros.
Now anyone who wants to get a residence permit in Portugal can invest. What benefits does the financial donor get? The main thing is the opportunity to live permanently in a country that is successful in 2020 and will only grow in the future. Why you should choose Portugal for investment – read on.
Portugal Golden Visa. Top 7 reasons to choose Portugal for investments and residence permits
We will look at the important economic and legal reasons.
1. The conditions of the residence permit program.
2. Tax exemption.
3. Mortgage 1.5%.
4. One of the best European real estate markets.
5. The capital Lisbon is the best city for investment according to BIG4 reports.
6. Portugal is the 3rd safest country in the world.
7. According to Forbes, the southern region of Portugal – the Algarve – is one of the top 10 places to live during and after COVID-19.
Conditions of the program and obtaining a residence permit
We can say with certainty that Portugal has the best residence permit program in the European Union with the right to obtain a passport in 5 years.
Here are just some of the conditions of the program.
A quick start to citizenship. If your goal is to get citizenship, the golden visa provides the best opportunities. You can apply for a citizenship passport in 5 years. In comparison, under other programs, you can talk about a passport only after 6 years. And it is not a fact that the applicant will meet all the requirements and get a positive result on his request. Investors get the “green light” in most cases.
Taking advantage of the golden visa, you can live permanently in Portugal and immediately enjoy all the benefits of the European country.
No language or history tests. Almost all European countries require a test of language and history before entering the country for permanent residence. Investors in Portugal will not have to learn Portuguese or English or pass any other exams.
Program Loyalty. Typically, residence permit programs have serious requirements: once every six months to travel to the country, to stay a total of more than 4 months during the year, etc. Portugal imposes a minimum of conditions:
- It is obligatory to stay in the country for a total of only 7 days per year. The investor has complete freedom of movement.
- A residence permit is also issued for spouses and children under 26 years of age, who are supported by parents or live in the same house.
- You can choose a convenient investment program. The minimum budget is 250,000 euros.
An important point: all real estate investments are liquid. The market is successful and competitive even within the European Union. For example, Greece and Italy can not provide 100% liquidity in their sectors.
It is also worth mentioning the procedure for obtaining a residence permit – it is transparent and simple, and takes no more than 6 months. It is possible to use the service MoveToCascais, which helps with the paperwork and relocation. Then the period of obtaining a residence permit will be reduced to 2-3 months.
Why choose Portugal?
First of all, it is a great subtropical climate. It is always warm and sunny here. The good weather makes the streets look beautiful and energizing. Residents of Portugal rarely suffer from depression. Perhaps this is also due to the good economic conditions. There are high salaries, and a stable economy (which means consistently low prices for food and necessities).
For freelancers, there are co-working rooms and cafes. For office workers, there are modern equipped offices. There’s a progressive labor code that protects the rights and health of employees.
Even more benefits:
- high salaries;
- a wide variety of products;
- goods of European quality;
- the local population is friendly to foreigners;
- environmentally friendly cities.
The 10-year tax exemption program
Portuguese tax rates are lower than in other countries. But that is not the only attraction – there is a possibility to avoid paying fees completely for 10 years. Everything is legal and happens under the “exclusive tax regime” for all residents who invest or do business. The reduced cost of doing business for 10 years is a great start for any private entrepreneur. It is possible to adapt to the market of the new country and cover part of the costs.
All tax residents – people who spend more than 183 days a year in Portugal and pay taxes – qualify for the tax exemption.
Read more about tax rates in Portugal
There are taxes associated with buying or owning real estate. An investor who injects capital into the real estate sector can pay tax under certain circumstances. Namely – if he becomes the owner. In this case, it will be necessary to pay:
- Stamp duty or Imposto do Selo, IS. The rate is 0.8%.
- Property Transfer Tax or Imposto Municipal sobre Transmissões.
- IMT, the rate ranges from 6 to 6.5%.
- Annual property tax or Imposto Municipal sobre os Imóveis, IMI. Rate – from 3 to 8%, varies depending on the type of property and the region.
If you sell real estate and are a non-resident taxpayer, you must pay capital gains tax on the difference between the purchase and sale price. The rate is 28%.
When running a business, taxes on income and profits received on the territory of Portugal become important. The preferential rate is 25%. From income derived by renting out real estate, dividends and other investment income must pay 28% taxes.
The rate can be progressive, depending on income, up to 48% (if income is above 80 thousand euros).
If you are a resident and also a citizen of a country with which Portugal has signed a double taxation treaty, the following rate applies:
- 15% – tax on dividends;
- royalties – 10%;
- capital gains – 10%.
Taxes can be waived if you are granted residency status on a Golden Visa and reside in the country for 183 days or more.
Also, an investor can be exempt from taxes on income from professional activities and employment. Exempt tax treatment is documented at the town hall and tax office.
Read more about the exclusive tax regime
Non-Habitual Residents is relevant for foreign tax residents, who receive a residence permit and permanently reside on the territory of Portugal.
Important! You can get the regime only if the person has not lived in Portugal before, and the residence permit has not been in the last five years.
“Greenlight” from taxes gives creative people, doctors, IT specialists, scientists, and owners of large capital, investors under the Golden Residence Permit program.
Holders of the exceptional tax status can pay no income tax of 20%, tax on employment or business activities, as well as retirement income for 10 years.
Move to Cascais staff can help you understand all the nuances of Portugal’s tax base. Certified specialists with many years of experience will provide you with basic information on taxes as well as comprehensive information on your field of activity.
A few years ago, the government of Portugal put forward new conditions for the registration of mortgages by residents and non-residents. Yes, it is in this country everyone can buy real estate. In other countries, only citizens and tax residents have the right to do so. In Portugal, everyone can buy a house or apartment. And members of the golden visa may arrange a mortgage at 1.5% per annum. It is not even necessary to be in the country.
What are the conditions for registration:
- the loan taken by the investor must not exceed 80% of the total purchase price;
- the amount of the mortgage cannot exceed 50,000 euros;
- the loan is granted for a period of 5 to 30 years, but no more;
- fixed-rate starts from 3,9%;
- floating rate is made depending on the value of the market indicator and the bank interest, but the interest is not less than 3.6%;
- the loan can be repaid prematurely;
- 500 euros are administrative fees;
- the acquired property must be insured, the borrower must also be insured.
All the requirements that are imposed on the mortgage applicant are justified by the fact that the bank wants to be insured against unforeseen circumstances. And the only guarantee of this is the solvency of the borrower. To obtain a mortgage in Portugal, you need to confirm your ability to repay the loan within a specified period. It should be understood that before granting the money, the bank will check all income and obligatory expenses. These categories include wages from the main place of work, the interest that one gets from investments, monthly spending on utilities, other loans, or mandatory payments.
What documents do you need to bring with you:
- Foreign passport.
- Document from your workplace in English or Portuguese. It depends on which one they can give you. It must contain your personal information: Full name, what position you work in, passport details, and what salary you receive in euros. It all has to be signed and sealed by the director.
- Declaration from the tax office. Obligatorily translated into Portuguese. It is certified by apostille.
- All data from the bank in which you opened a salary account for the last 6 months. Make sure in advance that the payments correspond to the amounts shown on the 2 PIT.
- Certificate, which confirms the place of residence.
- An identification code – it is issued to the taxpayer at the place of residence.
- Letter from the bank, if you took a loan there.
- Certificate of income and a receipt that you have the necessary amount for the first payment.
When you have finished collecting all the documents, you need to translate them into English and Portuguese and have them certified by the relevant department of the Consulate or the Portuguese Embassy. When you get pre-approval, the bank will start the valuation of the property and calculate all the necessary amounts. When you receive the final report from the bank, you will need to open a current account at 1.5% in the bank where you take the mortgage.
Portugal is in the top European real estate rankings
The real estate market has always been and will always be one of the most profitable. Many ratings compiled by European economists confirm that the most profitable to invest in real estate in Portugal, Montenegro, Italy, Switzerland, Greece, France, Germany, Poland, and Bulgaria. Portugal, as the leader of the list, has the highest rate of market liquidity.
Buying a home in Portugal protects you from many problems. So, your investment is sure to pay off, the property is always relevant and can be sold quickly. This is almost the only market where the invested money is capitalized. And this is even though Portugal was included in the ratings only a few years ago, and the market has been in a stable state since 2012. The speed of money turnover inside equals the speed of the influx of new people who are willing to invest in real estate. And if you buy a house now for one price, in time you can sell it for 10-20% more.
In addition, you do not have to draw up documents and come to the country, as a resident to do business. All you need to do is once the paperwork, and then your apartment begins to live its life and bring income through the rental. This is ideal for those who want to invest in real estate.
The market dynamics since 2019 have started to grow with a percentage of 7.92% year-round. Analysts believe that such growth will continue at least until 2021. What will happen next is still difficult to calculate. But there are no factors for a decline. In addition, another bonus is the chance to obtain a residence permit, which will allow you not only to reside in Portugal but also to move freely throughout the EU.
What else puts Cascais in the top cities to buy real estate?
The processing time takes only 2 months – and it is much lower than in Poland or Italy. If you decide to invest in real estate, which is located near the sea, it can be rented. This is a legal way to make money. And given the climate in the country and house prices at the moment, you will recoup your investment within 5 years. After that, you will begin to receive a net profit.
In addition to low prices for the property itself, which vary depending on how far from the sea and the center of the apartment is located. They are also advantageous in that they are extremely cheap to maintain. Major utility bills – electricity, gas, and water. They cost 120 euros a month for owners of homes. You can choose the region where you want to buy real estate. Wherever you buy it, it will bring you profit. Why?
Because the regions are divided into three types. One is great for work, one is great for school, and one is great for vacation. So no matter where you choose, you always stay in the black. Not only do those who come to the resort need somewhere to live, but also those who come here to work or study. And if the house in the resort area you can rent is more expensive, but not permanently, the one that is in the industrial area can be rented seasonally to those who come to make money.
After five years of life, the one who invests money and all his family members will be able to officially receive not just a residence permit, and the citizenship of the EU.
Lisbon is the best city to invest in according to BIG4 reports
Lisbon is the city of young startups. Only here you can find a large number of interesting business ideas: both realized and in need of financing. The index of business success is one of the highest in all of Europe, and investing is considered one of the most profitable investments.
Lisbon beats even Berlin and British cities in a study by PwC and the Urban Land Institute. The researchers concluded that global projects of municipal importance gave such results. These include construction projects to expand the city limits by building new residential facilities. All this will take an already successful real estate market to a new level.
Because of the large number of entrepreneurs, business centers are being actively built. These are modern buildings, fully oriented for the work of companies and firms. Innovative offices are in development – a new word in the design of administrative buildings.
Portugal is the 3rd safest country in the world
It is important not just to live in a beautiful place, but to be sure of your safety. You can go out at night and not worry about your safety. You can leave your phone in a cafe and pick it up the next day unharmed. This is caught by the financial success of most citizens. Also, Portugal has a well-developed judicial and law enforcement system, which protects your rights and life. Equally important is the mentality of the inhabitants, among whom criminals are much less common than the European average.
Another interesting fact is the right to self-defense. In Portugal, it is like in Texas. A man has the right to defend himself and his family, his home, and his property. But most likely it will not come to that, because every Portuguese knows: human rights end where other people’s rights begin.
Where to live after COVID-19
The epidemic has triggered several new crises. The economic one, for obvious reasons. A crisis in employment, services, education, and medicine. The world has changed, and individual space, medical security, the right to work remotely, and self-education are now highly valued.
Portugal’s western region of the Algarve leads the way in this, being one of the world’s top 10 places to live well during and after the pandemic.
First of all, there is a well-developed medicine, special virus departments, and equipment for the critically ill. A sick person will not be treated in the corridors of an overcrowded hospital.
Secondly, there is a program with a family doctor, where you can be observed with any disease and receive timely skilled care.
In general, Portugal has very well-developed medicine and educated doctors.
All anti-epidemiological restrictions are in effect in this region, but along with this business lives. Entrepreneurs are not affected by the successful actions of the local government.
You can legally study and work remotely if you see fit. The freelance market is competently regulated, and the tax rate is not burdensome.
If you are looking for the fastest and easiest way to move to another country for permanent residence, then pay attention to the golden visa. It benefits you – the opportunity to live in a modern city should not be missed. And it is beneficial to the host country because you will become an investor and will be bringing in active capital.
Recall the most important thing to know about the golden visa:
- This is an immigration document issued by the Portuguese Embassy or Consulate.
- It is issued only in some countries, programs and offers may vary.
- The investor chooses a program, officially makes a contribution, and receives a residence permit.
- Where you can invest: active and passive investments can be directed to the development of the real estate market, and job creation.
- Portugal also offers the purchase of government bonds. In some periods it is possible to buy shares of state companies.
Portugal offers the best conditions for obtaining a golden visa. This is not surprising, because it is the Portuguese launch of the program in 2012 was the most sensational and popular. Here the minimum deposit can be as little as 250 thousand euros. For comparison, the minimum prices in other countries:
- Ireland – € 500,000;
- Netherlands – € 1.25 million;
- Luxembourg – € 500,000;
- Cyprus – € 300 000;
- Italy – € 1 million;
- United Kingdom – £ 2 million;
- France – € 300,000;
- Spain – € 500,000.
We spoke about the main economic reasons to choose Portugal for investment and relocation. Recall that these are the liquidity of the real estate market, the transparency, and success of the Portuguese golden visa program, and the attractiveness of the country (legal protection, security, and cities built for people).
If you want to invest in Portugal, but do not know where to start – contact the specialists of Move to Cascais. We deal with visas and investment projects and help people with moving to Portugal. We know how to start the process of obtaining a residence permit, how to fill out paperwork, and how to negotiate with the Portuguese side. With us, you get 100% success and save time!