What is Portugal Golden Visa?
The first Golden Visa program was launched in Portugal on October 8, 2012. As Portugal’s real estate market lost its value, Portugal Golden Visa had been introduced to bring new funds. Portugal’s Golden Visa is offered in accordance with the Ministry of Foreign Affairs through AICEP (Department of Consular Affairs and the Portuguese Trade and Investment Agency).
The program enables non-EU/EEA citizens to obtain residence permit for a 5-investment in Portugal. According to SEF (Portuguese Foreigners and Borders Service), Portugal Golden Visa has issued more than 6500 permits so far. The total investment into Portugal as a direct result of the program has reached €4,000,000,000. You may find more information at Portugal SEF Golden Visa official site.
Portugal’s Golden Visa programme is now quite a decorated one. According to the report of The Global Residence and Citizenship Programs 2017-2018, Portugal’s Golden Visa Programme is world’s best residence by investment program. It is the third consecutive year for Portugal to be announced to have the top residence by investment program across the planet. The report uses ten indicators, namely: citizenship requirements, compliance, financial requirements, processing time and quality of processing, quality of life, reputation, taxation, time to citizenship, total costs, and visa-free access. From all these indicators, Portugal’s program achieved 79 points out of 100.
Portugal Golden Visa Statistics
Above you may find the most recent statistics regarding the Portugal Golden Visa as of June 2020
Eligibility Criteria for the Portugal Golden Visa
Any non-EU/EEA nationals who are older than 18 years old can apply for the Portugal Golden Visa provided that they make a substantial investment into the country. The country requires the investment to be maintained for five years.
One of the biggest advantages of Portugal’s Golden Visa program is that its investment requirement is 350,000 Euros. Also, it is defined as residency by investment, but it does not require a significant physical residence. As mentioned before, the applicants’ continued presence in the country is not necessary for naturalization as long as a certain limit had been met. This limit is 7 days for the first year, and 14 days for the two subsequent years.
Investment Options of Portugal Golden Visa
- Money Transfer
In this method, the investor transfers at least €1 million to Portugal. They might choose to follow these different routes:
a. A bank deposit;
b. The purchase of a shareholding in a Portuguese company or the incorporation of a single-member private limited company having a paid-up share capital of at least €1 million, such company is free to invest wherever and in whatever it wants;
c. The purchase of Portugal sovereign debt instruments;
d. The purchase of Portugal traded securities.
The investors may choose to invest in Portuguese property of at least €500,000. They may choose to invest as an individual or as a joint legal entity. If the property is in a “low density area”, minimum requirement gets reduced to €400,000.
Real Estate and Rehabilitation
The investors may choose to invest in Portugal property that is in need of rehabilitation and restoration. In this case, minimum requirement decreases to €350,000. The property either has to be built more than 30 years ago or has to be located in a designated area of urban rehabilitation. If the property is in a “low density area”, minimum requirement gets reduced to €280,000.
The investors might prefer to create a business that creates 10 new permanent jobs. The number decreases to 8 if the business in a “low density area”.
The investors may select the option to invest €350,000 in scientific research that is conducted by accredited institutions that are part of the national scientific and technological system. If the project is in a “low density area”, the amount decreases to €280,000.
The investors can also invest at least €250,000 in the artistic production or the recovery or maintenance of the national cultural heritage that is conducted by accredited institutions. If the contribution is made in a “low density area”, the minimum requirement decreases to €200,000.
The investors might choose to invest at least €500,000 in units of a Portuguese fund that invests in the share capital of small or medium sized businesses.
Property Renovation Option of Portugal Golden Visa
To be able to use the property renovation option of Portugal Golden Visa, investors must make sure that the building is approved by the Town Hall (Camara Municipal). Therefore, the property that is to be purchased must either be confirmed at the Town Hall by the previous owner, or be examined by an architect who is hired by the investor and reported to the Town Hall afterwards.
The Golden Visa investment in this option involves the property price and the ex-VAT cost of the contracted renovation works. Other expenses such as assistance fees, government fees and taxes do not count towards the investment amount.
Portugal Golden Visa Application Process
Portugal Golden Visa application process now starts online. Online application is the initial step which involves the copies of the required documentation. Once the initial request is approved by Serviço de Fronteiras e Estrangeiros (SEF), the investor has to attend an interview in person.
Before, the interview would be made at the location of the investment. However, now SEF allows the investor to choose the location of the interview. This change particularly reduces the waiting time throughout the process.
If other family members are to be added into the main application, all of the applications must be made simultaneously. A processing fee of €532.70 is paid for the first applicant and €83.10 for each of the remaining family members. At the end of the application period, the main applicant must pay an approval fee of €5,274.40 for each applicant. It usually takes 10-20 days for the one-year residency card to be issued and sent.
It is technically possible for the investors to go through the application period on their own, but it strongly advised against since the process might get really complicated at times.
Opening a Bank Account and the NIF Number
The Portuguese NIF number is a tax identification number. It is used for many activities regarding Portuguese taxation system or real estate. It is used when paying taxes, making official purchases and going through other legal or official activities. The Portuguese NIF number is issued by the Portuguese Tax Authority. It is best to have an NIF number as soon as possible even if there is no permanent residency required. Even for a short-term residency, it is a must to get it sorted out quickly.
The Portuguese NIF number is a 9 digit number issued specifically for each person. It is found on any written document with the Portuguese Tax Authority. It is also found on tax cards and Portuguese citizen ID cards.
Getting a NIF number from Portugal is required for Portugal Golden Visa. It is required to be able to open a bank account. It is required to be able to buy and sell property. Investors must have a bank account in Portugal to have their investments confirmed, and to open a bank account, investors must have a Portuguese fiscal number (NIF). Therefore, to be able to have any financial flexibility in Portugal, NIF number is needed.
Following documents have to be submitted by Golden Visa applicants:
1. For each and every applicant:
a. Full passport copy (all pages);
b. Copy of flight tickets to and from Portugal;
2. For the main applicant, a power of attorney and an affidavit, signed in the presence of a lawyer in Portugal, a Portuguese Consulate officer or of a notary public (in the latter case it must also be legalised by the apostille of The Hague Convention).
3. For each applicant that is over 16 years old, a certified copy of the criminal record or a Police clearance letter.
4. For the spouse of the main applicant, a marriage certificate; or, for the co-habitant or “common law spouse” who has been so for over 2 years, an attestation of this status issued by an official entity, such as a court of law.
5. For each child, a birth certificate and, if over 18 years old, under 26 and unmarried, proof of enrolment as a full-time student.
6. For each dependent parent, the child’s birth certificate plus
a. If over 65 years old, the child’s birth certificate;
b. If under 65 years old, a certificate of no income issued by the tax authority of the country of origin.
During the application for the Portugal Golden Visa, each document has to be legalised (except for the passport). Also, documents that are in English are not accepted anymore. So, each document must have their official Portuguese translations attached. There are three different ways to legalise the documents:
- By a Portuguese Consulate;
- By the apostille of The Hague Convention, if the country of issue is a signatory thereof;
- By the issuing country’s Consulate in Portugal, followed by the attestation by Portugal’s Ministry of Foreign Affairs (there may be restrictions, it is advised to check this possibility before choosing this option).
Through the Golden Visa process, Portuguese government charges the applicants for several items:
- An application fee of €520.40 per initial and renewal application (€1.10 in the case of each investor’s family member applicant);
- A visa initial issue fee of €5,202.60 per visa holder; and
- A visa renewal fee at the end of years 1 and 3 of €2,601.30 per visa holder.
After the application process, there may be some additional costs that have to be taken into account:
- Visa renewal fees
- Tax representation and correspondence handling in Portugal;
- Property annual tax at between 0.3% and 0.5% of the official value of urban property
- Income tax
Submitting the Application
The first step for submitting the application is to fill out the application registration form of SEF. After filling the form out and uploading all the necessary documents legalised and translated, the applicant must wait for the SEF’s examination of the application and the documentation. Then, the application processing fee is paid. Next, the applicant designates a date and location for the personal interview. At the interview, the applicant has to submit the originals of the uploaded documents. In a few months after the interview, SEF notifies the applicant that the residence permit can be issued. After paying the remaining application fee, the applicant can get their residence card(s).
Portugal Golden Visa Renewal Process
In the first year of residence, the applicant must spend at least seven days in Portugal as a resident. To renew the residence permit, the applicant must start the renewal process at least one month before the current card’s expiration date.
During the renewal process, certain documents have to be re-submitted. Biometrics has to be retaken, current criminal records have to be updated, and a renewal fee of €2,637.20 has to be paid for each applicant. Additional processing fees are €532.70 for the main applicant and €83.10 for the other applicants.
Second year residence card is valid for two years. For this period, minimum residence requirement is 14 days per year. These days do not have to be consecutive. At the end of the third year, the residence permit must be renewed for the second time. This process is identical to the first renewal process.
Third residence card is, again, valid for two years. Minimum residence requirement for this period is same as the previous period. The applicant must reside in the country for at least 14 days per year, consecutive or non-consecutive.
At the end of the fifth year, the applicant can apply for permanent residency followed by citizenship.
Portugal Golden Visa Benefits
Portuguese Golden Visa definitely has some travel advantages. An average European Union passport provides its holder with visa-free travel to at least 186 countries around the world and ranked 6th in 2020. Portugal is one of the European Union countries certainly has its perks in terms of visa-free travel. Portugal residents can travel freely to all the EU countries and the Schengen Area.
If one person in the family holds a residence permit, Portugal’s Golden Visa program allows their family to also gain access to a permanent residence permit and Portuguese citizenship in accordance with the legal provisions. They may also enter the country without a residential visa.
Portugal grants its residents access to the National Health Service and it enables the beneficiaries to get treatment by paying quite minimal costs. Also, being a Portuguese resident earns the applicant and their family the right to education, having a professional activity, social security, trade union protection and many more advantages.
Being a tax resident in Portugal is also a charming option, because for both residents and citizens, Portugal’s tax regime is one of the bests in Europe. If the applicant or the resident spends less than half of the year in the country, they are exempt from nearly all of the foreign source income tax.
Non-Habitual Tax Regime
The non-habitual tax resident (NHR) is a tax regime created to improve Portuguese international competitiveness. This regime targets non-resident individuals who are likely to establish a permanent or a temporary residence in Portugal. In short, this regime allows investors the opportunity to become tax residents and legally eliminate some of their taxes. For instance, this program offers the opportunity to reduce the income tax to zero.
Frequently Asked Questions
1. What are the advantages of the Golden Visa?
Portugal Golden Visa allows entrance to the country without a visa. It grants the right to live and work in Portugal, and to bring the resident’s family into the country. It paves the way to Portuguese citizenship, grants access to Portuguese healthcare and education system and offers visa-free travel to the entire Schengen area countries.
2. How much does it cost to obtain the Portuguese Golden Visa?
With the 2019 update, the processing fee costs €532.70 (plus €83.10 for each additional family member) and the issuance of the Golden Visa costs €5324.60.
3. Should I work with a lawyer to obtain the Portuguese Golden Visa?
When it comes to legal and formal activities, it is always smarter to have a reliable consultant at work. Lawyer fees are not that expensive compared to the risk of making an error that might lead the application to fall through.
4. Does Portugal Golden Visa allow the applicant’s family to enter Portugal?
Yes, it does. Spouse and children of the applicant (as long as they are under 18 or are enrolled in school) can enter the country. In some cases, parents of the applicant might benefit from this rule, too, provided that they are proven to be getting financial support from the applicant.
5. Should all supporting documentation be translated into Portuguese?
Yes. Until recently, Portugal accepted documents that are in English. However, this has changed, and now, all the documents involved in the process must be translated into Portuguese.
6. Do Golden Visa holders pay taxes in Portugal?
Obtaining a Golden Visa is not equal to becoming a tax resident. However, since the applicant makes a substantial investment in Portugal, most probably there will be some taxes involved. Becoming a tax resident, too, of course, is always an option.
7. Do Golden Visa holders have to register and pay Social Security contributions in Portugal?
No, they do not. Yet, if not registered, the resident has to cover all the social security expenses themselves including healthcare. So, in the end, it might not be logical to cut expenses on this front.
8. How long is the Portugal Golden Visa processing time?
It is usually around five months. It took longer until recently. Now that the online processes are integrated into the application process, the entire operation takes a lot shorter.
9. How long does it take before the Golden Visa holder can acquire Portuguese citizenship and passport?
In 2018, Portuguese government changed the Portuguese Nationality Law and reduced the required period of residency to 5 years from 6 years.
10. Can I retire in Portugal through the Golden Visa program?
Yes, if you are a non-EU citizen, Golden Visa program can be a useful way to get residence in the Portugal for retirement.
11. Is it possible to make the investment as a legal entity?
Yes, it is possible. It is not mandatory to make the investment as an individual. However, the company must be based in an EU member state.