The story of Irina and Dmitry. Investing in income-producing real estate in Portugal.

The story of Irina and Dmitry. Opening a business and investing in profitable real estate in Portugal.

Table of Contents

Our family has long been interested in moving to a warm country, closer to the sea. Domestic resorts did not really appeal to us. I think many people understand why. Unfortunately, the standard of living of many Russians, poor infrastructure, and poor quality of service with fabulous taxes and real estate prices in the south of Russia – not exactly the neighborhood which was dreamed about.

We looked at several countries where we would like to settle permanently. And after a careful assessment of all possible options, and there were many of them: Bulgaria, Cyprus, Turkey, Malta, we decided to choose Portugal.

We want to share our conclusions to help those who are now thinking about purchasing overseas property with the choice of a favorable country to live in, whether it’s for a smart investment, a residency with a subsequent residence permit, or permanent residency opportunities.

I think the nuances that are important to us are also relevant to most people considering moving to countries that are as favorable as possible in all factors.

Now let’s get into the details in order. Why Portugal?

Why Portugal?

The story of Irina and Dmitry. Starting a business in Portugal and investing in profitable real estate in Portugal.
The story of Irina and Dmitry. Opening a business and investing in profitable real estate in Portugal. 7

How to decide to open a business in Portugal

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Climate

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This European state is located in the southwest of the Iberian Peninsula. Portugal has a comfortable, subtropical Mediterranean climate. The weather is almost always sunny. Winters, as such, by Russian standards, is absent. The average temperature in January is not lower than +10 ° C. In summer, the thermometer column keeps on a comfortable range for the Russians from +25 to 30°С.

Five percent of the land of the country is covered with forests. They are dominated by conifers and eucalyptus, which are very good for us who are used to evergreen forests. The water temperature of the Atlantic Ocean, which washes most of the country in the summer months, is about + 20 °.

Water temperature in the Atlantic Ocean most of the country in the summer months.

Economics

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In recent years, Portugal’s economy has grown steadily. The paper industry is well developed here. The state is actively engaged in the extraction of minerals. One of the main sources of replenishment of the state budget is tourism.

Thousands of Europeans annually come here to see the beautiful country, with its cozy towns and authentic architecture. Tourists do not miss out on the opportunity to enjoy the local cuisine and wonderful wine.

What was the main thing for us when choosing this country as a place for future permanent residence? In addition to several economic factors, clean air, excellent climate, proximity to the ocean, good environment, tasty and inexpensive food, and low crime rate. The welcoming attitude of the local population to newcomers is also encouraged.

It is interesting that in large cities, there are decent-sized Russian communities. In other words, there is always someone to talk to in your native language besides your family. And if you are not suddenly leaving your settled place but systematically preparing to move abroad, the adaptation period will be concise. In addition, our elderly parents can come and live here for months without any problems. This means that there will be no homesickness.

There are quite a few obvious advantages in business projects and training for a family like ours: mom, dad, and two teenage children. So let’s move on.
What to start preparing to move to another country
With a serious workload, it was difficult for us to determine the main points of the move on our own. We saw ourselves in Russia, visualized life in Portugal. But how to understand all the details of our dream to make it happen quickly, clearly, and without unnecessary bureaucracy?

We have heard from friends about the company MoveToCascais, which has been helping our compatriots with their relocation to Portugal for several years. That is already something. I did not want to rush into all sorts of search and comparison of experts in the matter. Fortunately, we have our own real estate agency in Moscow, and we know the subject quite well, so we were selecting the company to work with quite a bit of preconceived ideas.

I was pleasantly surprised that we were not charged for detailed and extensive consultation. Already at the initial stage of cooperation, we decided on the region we wanted to move to and the type of property.

In the future, we purchased service of M.consultant, after which a client card was set up, assigning us a personal consultant. The friendly manager answered all our questions clearly and competently. I was pleased with his competence in knowing the legal nuances of organizing the move and buying real estate. The specialist who was assigned to us was on call virtually 24/7. We are very grateful for his entire process. Let us share with you what it entailed:

  • virtual tours of the regions and cities in our chosen country, indicating the pros and cons of living in them;
  • assistance in choosing a school for the sons, as well as sports sections in worthy specialized organizations.
  • clear instructions on how to gather and prepare all necessary documentation;
  • finding options for profitable investments;
  • advice on special tax status (NHR), which is very important for optimizing income and minimizing taxes. In Portugal this program shows excellent results, even compared to Cyprus.

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Now some facts about the immigration program and the requirements for investors.

Portugal immigration program
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Portugal immigration program

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This state’s immigration program guarantees investors complete freedom of choice. You can safely invest in any number of objects, any purpose. This can be land plots and commercial real estate. In this case, all investments are repayable and potentially profitable. All of these objects are allowed to lease. Obtained by the purchase of property, “Golden Visa” gives the right to visa-free travel to the Schengen area and allows almost permanent residence in Portugal.

The distinctive feature of the program “Golden Visa” from similar products in other European countries is that the money invested by the citizen will work for him, bringing a good dividend. And the host country will not receive such a tempting, expensive “gift” from its new resident. Because of this, this program is top-rated in Europe.

Portugal legislation “Golden Visa” is issued for 2 years. It can then be extended twice for another 2 years if the entire period of time the property remains in your possession. After 5 years, it is possible to apply for permanent residency. And the next year – to citizenship. As a result, the average period before obtaining a Portuguese passport is 6 years. To become a full citizen of the state, you must successfully pass the language exam. Dual citizenship must be allowed in Portugal. And you do not need to give up your Russian passport.

What are the requirements for investors

  1. A senior citizen of a “third country”, i.e. non-EU country.
  2. The corresponding investment in the economy. As a rule, it is a purchase of real estate with a budget of at least €500 thousand. But in reality the state offers a variety of options, varying in amount and in the object of investment.
  3. No criminal record in Portugal.
  4. No refusal of a visa or entry into the EU.
  5. Health insurance for the entire stay in the state.
  6. Presence in Portugal for at least 2 weeks every 2 years.
  7. Safety of investment for 5 years.

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Now, here’s the fun part. Citizens who have received VNG for investment, Portugal confers all the rights of a resident of the EU. It guarantees several other benefits to program participants. For example, they can travel to Schengen countries without obtaining visas and spend up to 90 days in the EU without any explanatory documents.

In addition, the investor, who is a full resident, can keep their savings in any European bank. Also, he can carry out transactions through international banks absolutely legally. Business owners get special conditions to avoid double taxation.

The investors’ children are entitled to receive higher education in any university in Portugal. Upon graduation, they receive a European diploma, which entitles them to work in any EU country.

We received all this information from the manager of MoveToCascais. The agency’s specialists are constantly monitoring the current political and economic situation in Portugal and other areas of life in this country.

Now, let’s get down to business. We had some free money, which allowed us to buy an investment property in the resort city of Algarve. And in doing so, we did not have to sell an apartment in southwest Moscow. Lisbon and other cities far from the Atlantic coast, we did not even consider.

The southernmost region of Portugal
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Southmost region of Portugal

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The Algarve region is located in the south of the country. It is popular with locals and tourists alike. If you are looking for the best beaches and hotels, this is the place for you.

As for us, we preferred to live in a place with 300 days of sunshine a year, good ecology, mild winter, and warm summer, excellent cuisine, rich in seafood and all possible derivatives of them. Perhaps, in our view, it is something close to paradise.

With the help of our personal advisor from the MoveToCascais agency, we found several houses that met our family’s needs without leaving Russia. In our search, we decided that we wanted a house that was relatively close to the ocean and had a part that we could use as a rental property.

This rental housing format is quite popular with investment property buyers in Portugal.

What to look out for when buying property

An interesting fact which has a significant impact on costs: the payment for repairs and building materials can be included in the stated investment budget. But for everything to go smoothly, a clear and detailed renovation plan is needed. It must be submitted to the Service for Foreigners and Borders (SEF) for approval. This step should be taken even before the purchase of the property to ensure that, firstly, the investment is calculated correctly, and secondly, that the SEF is accepted.

Please note that officials in Portugal are very responsible for their positions and responsibilities; bribery is not acceptable. So decide in advance who you want to assist in preparing the project and getting competent legal support. In our situation, all these tasks were successful. They quickly resolved with the help of the same company MoveToCascais.

In our situation, all these problems were solved successfully and quickly.

So, after careful calculations, deep thought, and some family arguments, we settled on two options. Well, it’s time to hit the road. After all, we can’t make up our minds about the dream home we planned to live in happily ever after remotely.

Getting to the final choice
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BEGINNING THE FINAL SELECTION

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The agency manager told us that the costs of selecting an investment property, including the cost of flights and hotel accommodations, maybe partially included in its cost at a later date. This procedure is a special agency. Yes, they will not be fully compensated, as it sometimes happens in similar schemes in Bulgaria, Turkey, or Cyprus. But if we consider that it is necessary to fly to Portugal to register documents more than once, thank goodness for that.

The flight from Moscow to Lisbon takes about 5 hours. Portela airport, where we landed, was pleasantly surprised with its infrastructure and modern design. By the way, it is currently the main air gateway of Portugal.

It was, of course, possible to fly to Faro – the capital of southern Portugal, but unfortunately, from Russia, there are only charter flights. But, this information, we clarified for the future, from this small town you can fly directly to many countries in Western Europe. That is not bad enough for a town of no more than 120,000 inhabitants.

When we arrived at the airport, we were taken to the airport for a visit.

We were met at the airport by a representative of the MoveToCascais agency. On the way, we enjoyed the story of our accompanying person about local sights and other interesting things. The drive to the Algarve, and more specifically to the resort town of Vilamoura, took just over 2 hours.

It took us a little more than 2 hours to reach the Algarve.

Our neighbors in this option would be people from Russia, Ukraine, Spain, and Portugal itself. In principle, we were happy with this option, but unfortunately, it would have been problematic to have a separate apartment to rent out.

So we moved on to consider the second option.

Did it happen?!
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Is it really happening?!

There’s such a thing as seeing a house and immediately knowing it’s yours! The house, built in the mid-1950s, which we took a cab to, astounded us with its incredible, somehow elegant appearance.

The bluish stone walls twined with wild grapes, the wooden shutters, the solid tile roof all made us feel like this was our future home. In photos and video reviews, everything looked simple and ordinary enough. But in reality, it was a wow effect! Maybe it was the fact that the owner took care of the presentable appearance of the house. You could feel that the walls and the facade had been painted recently.

And when the MoveToCascais manager who accompanied the transaction arrived, we entered the yard. It’s hard to convey the scents of flowering shrubs wafting in the warm air. You can enter the house from the street side and a small courtyard. This two-story building is as if divided into two parts, which was originally required. We were planning to rent part of it out.

The inside of the house was fresh and clean. Even though it was 70 years old, the living room, kitchen, and bedrooms were almost no need of renovation. Later, we needed to buy some of the living room furniture and appliances: TVs, refrigerator, kitchen equipment.

The price of this house was very good.

The price of this house was within our budget. Together with the additional investments, they purchase cost 458 thousand euros. The total area of the property is 167 m2. The right-wing has 3 compact bedrooms, 2 bathrooms, living room connected to the kitchen area. The left-wing had everything necessary for a cozy studio apartment, which nowadays is always in demand. One bedroom with a bathroom, a roomy living room, also combined with the kitchen area. This is where we accommodate our family and friends. The rest of the time, tenants who find us through Booking or Airbnb come here. It’s a high income because that part of the house is never empty.

Now that we have been in Portugal for more than two years we are thinking about a new investment. Our Moscow real estate agency is still working. Therefore my husband has to fly to Russia frequently. And I wouldn’t mind taking up the hotel business here. Fortunately, the flow of friends and acquaintances and their acquaintances are inexhaustible. Quite share their attention and love for travel and holidays in Portugal. As an option, we are now considering buying another house we want to convert into a hotel.

The sons, who have adapted to local life faster than my husband and I, are ready to help us with this new project. They are fluent in Portuguese and English, which will allow them to work in the hotel during the summer vacations.

The friendliness of the local population was unfamiliar to us at first. We, who were born and raised in the Soviet Union, were always expecting a catch. But this did not happen. Surprisingly, but despite the age at which we moved here, and we, by the way, were over 40, we got used to the beautiful language, positive emotions, the unhurried flow of life, the serene smiles of our neighbors. And now we can easily pass for Portuguese.

, So life at 40+ is still just beginning, we echo the words of the famous movie heroine of the 80s. And it’s a shame not to take advantage of the opportunities offered to visit investors and their families by hospitable Portugal.

Well, if you need facts and more information on how to organize your move to this country, we are happy to tell you what documents are required for the registration of the property and how the process itself takes place.

List of documents for investment property

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Here, you need to keep in mind that all documentation issued abroad needs to be translated into Portuguese and notarized. Here is a detailed list of the documents required to complete the transaction:

  1. Passport or other identity document.
  2. Document proving legal entry into the state. In our case it was a Schengen multivisa that we had taken for a holiday in France a couple of years ago.
  3. Certificate of criminal record from Russia.
  4. Medical insurance covering the period of temporary stay.
  5. Documents proving compliance with tax obligations. We have provided a Russian declaration of income as well as a certificate of no debts, translated into Portuguese.
  6. PIN.
  7. Voucher confirming the payment of the state fee for the “Golden Visa”.

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We were fortunate to have the agency specialists help us with the preparation and translation of all these documents, as well as with the communication with the authorities. It is convenient when we can get everything in one place. Moreover, by the time of purchase, we talked quite closely with the managers of MoveToCascais, and they understood us literally at a glance.

Signing the purchase agreement
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Concluding a sales contract

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Escritura – the final transaction is done at a notary’s office. In the office, the notary carefully examines all documents, as well as their reliability. You can go to a specialist only after paying taxes, having a receipt in hand. After that, the procedure of paying the entire amount of the transaction takes place. The seller receives a remittance of the amount held by the buyer in a Portuguese account or in a special account of the law firm which accompanies the transaction.

Before the parties sign a compromise document, which in this case is the contract of sale, the notary should always read it aloud. If one of the parties does not speak Portuguese, an interpreter familiar with the subject can be called in. Most often, this role is performed by a realtor or lawyer.

State registration of the transaction

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After the purchase and sale agreement is signed, notarized copies of the document are sent:

  • to the Land Registry (Conservatoria do Registo Predial), where the new owner is registered;
  • to the tax authorities.

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To find out why moving to PORTUGAL is a great solution for 2021.

*The material reflects the story of the hero of the article as interpreted by the author; concerning the described methods and processes of obtaining a residence permit – they may not coincide with the actual opinion of the editors of move to cascais on this subject. 

УЗНАЙТЕ, ПОЧЕМУ ПЕРЕЕЗД В ПОРТУГАЛИЮ – ОТЛИЧНОЕ РЕШЕНИЕ В 2021 ГОДУ

*Материал отражает историю героя статьи в интерпретации автора; относительно описанных методов и процессов при получении ВНЖ – они могут не совпадать с реальным мнением редакции MoveToCascais по этому поводу. 

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