Portugal Golden Visa: What US Expats Have to Know

The primary visa of its variety in Europe, Portugal initially launched its golden visa in response to the 2008 international monetary disaster. This system aimed to draw buyers who might bolster Portugal’s hard-hit economic system in change for a residency allow. Between its inception and 2023, Portugal’s golden visa attracted almost 13,000 buyers.

Does Portugal nonetheless have a golden visa?

In late 2023, Portugal’s golden visa noticed vital reform. 

A number of funding choices that beforehand certified buyers for the visa — buying actual property, making capital transfers, and investing in actual property funds — have been eliminated. These adjustments have been made as a part of the Mais Habitação (Extra Housing) Regulation, a legislative bundle designed to assist alleviate the shortage in inexpensive housing for locals.

The disqualification of those funding choices led many to marvel: Is Portugal’s golden visa ending? Nevertheless, as of 2024, Portugal’s golden visa stays energetic, with a number of qualifying funding routes.

Advantages of Portugal’s golden visa for US Expats

A number of the many advantages that Portugal’s golden visa provides US expats embody:

• Climate: Portugal has a Mediterranean local weather with gentle winters and scorching summers. Whereas temperatures can get excessive in the summertime, the nation boasts 586 miles of shoreline stuffed with seashores good for cooling off
• Price of dwelling: Life in Portugal is mostly way more inexpensive than many of the US. By some estimates, the price of dwelling in Portugal is about 37.4% decrease than that of the US 
• Security: Portugal is likely one of the most secure nations not solely in Europe, but in addition the world. The 2024 International Peace Index ranked Portugal at quantity 7 in its record of most secure nations
• Household reunification: Portugal’s golden visa means that you can carry your partner and eligible dependents. What’s extra, it authorizes your complete household to work, dwell, and examine in Portugal
• Massive expat group: Some 7,000 Individuals at the moment name Portugal dwelling, with well-established expat enclaves in Lisbon, Porto, Madeira, and the Algarve
• Wealthy tradition: From gorgeous Manueline structure to scrumptious dishes like caldo verde (a hearty cabbage stew) and pasteis de nata (custard tarts), vigorous fado music, homegrown wines like Porto and Alvarinho, fandango dancing, and complicated tile art work, Portugal has no scarcity of cultural choices
• Healthcare: Portugal’s public healthcare system boasts prime quality and low costs, with many inexpensive non-public plans out there as properly
• Tax incentives: Portugal’s non-habitual residence (NHR) scheme provides tax breaks for newcomers to the nation
• Citizenship: Portugal’s golden visa scheme provides a direct pathway to citizenship in Portugal, which lets you completely dwell, work, and examine not solely in Portugal however all the European Union
• Low residency requirement: Holders of Portugal’s golden visa want solely keep within the nation for seven to 14 days per 12 months (relying on the 12 months) to keep up and renew their visa in addition to apply for everlasting residence

Necessities for the Portugal golden visa

Eligibility standards & length

To be eligible to use for Portugal’s golden visa, it’s essential to:

• Be a non-EU citizen
• Have a clear legal document
• Be at the least 18 years previous or above
• Make a qualifying funding (extra on that beneath)

As soon as granted, the visa lasts for 2 years. You may renew it twice extra for 2 years every. After 5 years complete, you may apply for Portuguese everlasting residence or citizenship.

Funding choices & minimal funding thresholds

Whereas Portugal has gotten rid of some beforehand qualifying funding pathways, they nonetheless provide a number of totally different choices:

• Create at the least 10 everlasting jobs
• Contribute at the least €500,000 to a scientific analysis establishment
• Contribute at the least €250,000 to an accredited arts or cultural heritage venture 
• Make investments at the least €500,000 in a Portuguese enterprise capital fund
• Make investments at the least €500,000 in a Portuguese enterprise that may create at the least 5 everlasting jobs
  • Word: You may spend money on an present Portuguese enterprise or begin your personal 

Software course of for the Portugal golden visa

Documentation required

The paperwork you have to to use for Portugal’s golden visa embody:

• A duplicate of your passport
• Proof of the qualifying funding
• A declaration from a Portuguese financial institution confirming the switch of funds
• A legal document out of your nation of residence, issued inside three months of your software submission
• A kind authorizing Portugal’s immigration authority to entry your legal data in Portugal
• A sworn declaration that your funding meets the minimal necessities and that you’ll keep it for at the least 5 years
• Paperwork displaying good standing with the Portuguese Tax and Customs Authority and Social Safety system, issued inside 45 days of your software submission 
• An software payment of €605.10 

Step-by-step visa software course of

To use for Portugal’s golden visa, it’s essential to:

• Acquire a Portuguese tax identification quantity (NIF)
• Open a Portuguese checking account
• Make a qualifying funding
• Collect the required paperwork talked about above
• Submit your software
• Attend a biometrics appointment to have your fingerprints taken (upon approval)
• Apply for a residence card and pay the related payment of €6,045.20 per grownup

All in all, the method normally takes about six to 12 months.

Renewal & naturalization

After two years, you could renew your golden visa. This comes with an software payment of €605.10 (~$654.35), plus a renewal payment of €3,023.20 (~$3,269.24) per grownup member of the family. You’ll additionally must pay a residence card re-issuance payment of €3,023.20 (~$3,269.24) per grownup member of the family.

After one other two years, you may renew the visa for a second time. Once more, you’ll must pay the appliance payment (€605.10, or about $654.35) plus the renewal payment of €3,023.20 (~$3,269.24) per grownup member of the family. You’ll additionally must pay a residence card re-issuance payment of €6,045.20 (~$6,537.40) per grownup.

After 5 years complete, you may apply for everlasting residence for a payment of €8,463.40 (~$9,152.49) per grownup. Any subsequent everlasting residence renewals will value €4,232.30 (~$4,576.89) per grownup. 

When you have met the naturalization necessities in these 5 years, you may apply for Portuguese citizenship for a payment of simply €250 (~$270.36). You will need to additionally cross a Portuguese language check demonstrating at the least an A2 degree.

Tax Implications of the Portugal golden visa for US expats

Portuguese taxes

Portuguese defines tax residents as those that:

• Spend over 183 days (consecutive or not) inside a 12-month interval overlapping the tax 12 months, OR
• Preserve a routine residence in Portugal at any level inside a 12-month interval overlapping the tax 12 months

Tax residents who should file a tax return are topic to Portuguese taxes on their worldwide earnings. Non-tax residents solely file a tax return and pay Portuguese taxes if they’ve Portuguese-source earnings. Overseas-source earnings, nevertheless, is tax-free.

Revenue tax charges for tax residents in Portugal vary from 14.5% to 48%, relying on general taxable earnings.

Non-tax residents, alternatively, pay a flat charge of 25% on most Portuguese-source earnings. Portuguese-source earnings from curiosity and dividends, nevertheless, is topic to a 28% withholding tax.

Different taxes in Portugal embody:

• Capital positive aspects taxes: Usually 28%; diminished charges on the sale of sure belongings
• Payroll tax: 26.5%
• VAT: Usually 23%; diminished charges on sure gadgets

Non-Recurring Resident (NHR) program

For years, Portugal provided a Non-Recurring Resident (NHR) tax regime that gave vital tax breaks to new Portuguese tax residents for as much as 10 years. This included no taxes on international earnings, a 20% tax on Portuguese-source earnings, a ten% tax on pension earnings, and no taxes on capital positive aspects.

In 2023, the Portuguese authorities introduced they might prohibit new candidates from making use of to the regime. Nevertheless, they ended up saying a modified program, now known as NHR 2.0. NHR 2.0 is geared towards new Portuguese tax residents who work in analysis and improvement, for startup organizations, or in in any other case modern fields. 

Advantages of NHR 2.0 embody:

• A 20% flat tax on Portuguese-source employment or self-employment earnings
• A tax exemption on foreign-source passive earnings

US taxes

All US residents and residents who earn above a sure threshold are topic to US taxes, even when they dwell overseas. Consequently, the overwhelming majority of Individuals dwelling in Portugal should file (and doubtlessly pay) federal US taxes. 

Taxes for US expats are due on June fifteenth, though you may request an extension till October fifteenth by submitting Kind 4868. You continue to must make an estimated tax fee by April fifteenth, nevertheless.

B!T associated: US Expat Taxes 2024: 12 Ideas from the Greatest Expat Tax Service

In case you’re additionally topic to taxation in Portugal, you might face double taxation. Fortunately, the US provides a few expat-specific tax breaks that tremendously cut back the chance of this occurring, together with the:

• Overseas Tax Credit score (FTC): Offers expats dollar-for-dollar US tax credit on any international taxes they’ve paid, offering they’re authorized, paid, primarily based on earnings, and made out to them particularly. In a high-tax nation like Portugal, this will typically not solely erase your US tax legal responsibility, however provide you with surplus credit to make use of on future tax payments (as much as 10 years)
• Overseas Earned Revenue Exclusion (FEIE): Permits expats to exclude as much as $126,500 (tax 12 months 2024) or $130,000 (tax 12 months 2025) of foreign-earned earnings from taxation. To qualify, it’s essential to cross both the Bodily Presence Check or Bona Fide Residence Check
  • Word: Passing both of those exams additionally means that you can qualify for the Overseas Housing Exclusion, which helps you offset international housing prices

As well as, expats can declare many of the similar tax breaks as they might within the states, such because the Baby Tax Credit score (CTC).

Given the substantial international monetary holdings the Portuguese golden visa requires, you’ll seemingly need to file the next stories:

• Overseas Financial institution Account Report (FBAR): Obligatory for expats with over $10,000 cumulatively throughout international monetary accounts
• Assertion of Specified Overseas Belongings (Kind 8938): Obligatory for expats whose international monetary holdings exceed $200,000 on the final day of — or $300,000 at any level throughout — the tax 12 months

Optimize your expat technique as a golden visa holder

Portugal’s golden visa is a superb alternative for many who are hoping to dwell and make investments overseas. Whereas there aren’t as many routes for the golden visa as earlier than, there are nonetheless 5 methods to make a qualifying funding. Though the appliance course of requires time and persistence, Portugal provides a top quality of life for its residents.

Optimize your expat taxes

A transfer to Portugal will be an journey — however it will possibly additionally complicate your US taxes and open you as much as double taxation. That’s the place Vibrant!Tax is available in. Whereas we don’t provide golden visa software assist, we’ve helped hundreds of expats in lots of of nations world wide file their taxes precisely and optimally.

Schedule a free 20-minute session to find out how we will help reduce your tax legal responsibility, file your taxes, and produce you as much as compliance.

Get began now

Sources: