Like many countries, Portugal offers residency by investment opportunities to those wishing to relocate or seed their future by obtaining a passport within the European Union. For more than a decade, the country’s most popular option has been the Golden Visa Program, largely because participants had the ability to qualify for the program through investment in real estate and would also benefit from an attractive tax scheme for a period of ten years.
While the program is still very much in operation, Portugal’s Golden Visa underwent seismic changes in 2023. The real estate component of the program was eliminated in large part due to concerns over rising housing prices for Portuguese citizens. The government has also eliminated the Non-Habitual Resident (NHR) tax scheme, a policy that had previously afforded significant tax incentives to many immigrants, including those in the Golden Visa Program.
While these policy changes signal a clear shift towards other Portuguese residency by investment programs like the HQA Visa Program, the Golden Visa still provides multiples avenues to achieve residency in Portugal with the possibility of citizenship to follow.
Golden Visa Benefits
Being under the umbrella of residency visas, a Golden Visa grants the ability to live, work and study in Portugal. While there is no requirement to do so for Golden Visa holders, the decision to reside in the country for more than 183 days in a calendar year carries with it potential tax implications as well as a requirement for medical insurance.
As with all of Portugal’s residency visas, Golden Visa holders are permitted to travel within Europe without the need for any additional visas. After five years of residency, Golden Visa holders can pursue Portuguese citizenship, another benefit common to all of Portugal’s residency visas. A Portuguese passport allows the holder to live, work, and study throughout the European Union while also allowing for visa-free travel to over 190 countries.
Many family members of the principal applicant are eligible to apply for the Golden Visa. Eligible family members include the applicant’s spouse, children under the age of 18, unmarried dependents who are both full-time students and under the age of 26, and parents over the age of 65.
Current Golden Visa Options
Though the real estate category of the Golden Visa no longer exists, the program still offers residency in Portugal through investment in various funds, businesses, or by donation in specifically chosen areas. The qualifying investment must be maintained as long as the applicant holds Golden Visa residency status. Should the applicant become a permanent resident or obtain citizenship, the investment may be liquidated.
Qualifying investment categories require investors to contribute a minimum of €500,000 into a qualified Portuguese investment fund that has no direct or indirect ties to real estate. There has been a significant proliferation of funds in recent months as companies facilitating Golden Visas attempt to pivot from offering real estate opportunities to qualifying investments.
Alternatively, prospective Golden Visa applicants may invest a minimum of €500,000 in an existing Portuguese business or start a new business that meets specific requirements. The new business must be owned by the principal applicant and create a minimum of 10 full-time jobs, a threshold that drops to 8 full-time jobs if the business is formed in a low-density area in Portugal.
The final option in Portugal’s Golden Visa category is that of donation. One can qualify by donating a minimum of €500,000 into research and development of scientific or technological activity in Portugal or by donating a minimum of €250,000 into a project deemed to be cultural or national heritage, which may include the arts. These amounts decrease to €400,000 or €200,00 respectively if the project is in a rural area.
By comparison, those who choose to pursue Empowered Startups’ HQA Visa Program can join the program for €175,000, which covers several services including all residency related immigration processes for the principal applicant.
Personal Tax Implications
Not everyone who earns legal residency in Portugal chooses to move to there and become a tax resident as well. The Golden Visa has very low in-country stay requirements (see below), and many applicants fulfill only their mandated obligation in terms of time in Portugal each year. To become a tax resident in Portugal, one must be in the country for a minimum of 183 days per year.
Though most who secure legal residency with a Golden Visa choose not to become tax residents, anyone who earns income on an investment within Portugal must pay tax on those earnings. The tax rate on capital gains in Portugal is 28%. Anyone who chooses to work in Portugal is subject to the country’s progressive tax on that specific income, which ranges from 14.5% – 48% depending on the amount of income earned.
Those who applied for their Golden Visas prior to the end of 2023 are still eligible to benefit from the NHR once their visa application is approved. The now defunct tax scheme provided a flat tax rate of 20% on all revenue derived within Portugal and 0% on all foreign-earned income. It’s worth noting that these same tax incentives are still available to foreign nationals in very specific industry sectors including science and technology and those launching startups. As a result, everyone who qualifies for the HQA Visa also qualifies for the same NHR tax benefits, though they are no longer identified by that term.
Golden Visa Timeline
There remains a significant backlog for Golden Visa processing in Portugal. Securing an appointment with Portuguese immigration authorities, known as AIMA (formerly SEF), for Golden Visa applicants has become very difficult. While AIMA has pledged to improve processing time, the wait from application to a decision can be as long as two years. With the laws pertaining to the Golden Visa changing in 2023, many investors applied for residency prior to the end of the real estate component and NHR in order to qualify for the opportunities each presented. This rush to apply has only added to the glut of applications that AIMA has in its Golden Visa queue.
There is some good news, however, as a recent amendment by the government benefits those Golden Visa applicants who are also seeking Portuguese citizenship, which can be applied for five years after achieving residency. The change effectively allows the waiting period for residency approval to be counted towards the five-year wait to apply for citizenship. While this does not grant successful applicants their actual residency any sooner, it does mean the five-year wait to apply for citizenship begins when the initial residency application is submitted, not when it is eventually approved. If one’s ultimate goal is Portuguese citizenship, this is a welcome development indeed.
This same provision toward Portuguese naturalization applies to all residency applications that are eventually approved. What differs, however, is the time frame for approval. In the case of the HQA Visa, approvals happen much faster than with the Golden Visa as appointments with AIMA are prioritized for HQA Visa applicants.
Stay Requirement in Portugal
One of the attractive elements of Portugal’s Golden Visa is the low in-county stay requirement. Successful Golden Visa applicants need only spend an average of 7 days per year in Portugal. As the initial residency permit is issued for a two-year term, this means spending a minimum of 14 days in Portugal prior to the renewal of the residency permit. By comparison, neighbouring Spain requires its Golden Visa applicants to be in country for 183 days per year to maintain residency.
It is worth noting that successful HQA Visa applicants qualify for an exemption to Portugal’s in-country stay requirements by virtue of their competing obligations outside of the country.
