The United Kingdom leaving the European Union has brought forward new challenges and uncertainty. On the other hand, Portugal still has to offer several advantages to foreign investors who may now be looking for alternatives within the European Union to set the tax residency or to invest.
A good example is the Portuguese “Non-habitual Tax Residence” program, where the taxpayer becomes a tax resident in Portugal, taking advantage of a wide range of tax benefits, such as the possibility to be exempt, for 10 years on the majority of the income sourced abroad, such as dividends, interest, royalties, real estate capital gains and pensions. In case the taxpayer pursues a high value added activity, he may benefit from a flat tax rate of 20%, if it is obtained in Portugal, or from an exemption if sourced abroad.
Thanks to this special program, Portugal is nowadays one of the most attractive jurisdictions for foreign investors. According to international press, like “The Economist”, “Le Figaro”, “Le Soir”, “L’expansion” and “Les Echos”, Portugal is the new Florida of Europe.
To obtain the non-habitual resident status, it is necessary to fulfil the following conditions:
1. Not having been a tax resident in Portugal within the five years prior to the application to the regime;
2. To be considered a tax resident in Portugal on the application year.
Furthermore, Portugal offers extraordinary comparative advantages, namely:
i. No gift tax or inheritance tax between parents, children and grandchildren or between spouses; and
ii. No wealth tax.
Do it right and in an efficient way – Caiado Guerreiro & Associados has the knowledge and skill to guide you through the Non-Habitual Tax Residence regime.