Golden Visa a perfect plan after Brexit?
Portugal always recorded a strong presence of the British community in its territory. By creating favourable conditions as a Golden Visa, UK nationals find in Portugal either a place for tourism or for establishing their residency here. With the Brexit announcement, the number of new applications for Portuguese residency visas, like golden visas, rose from 1.500 to 2.500 per month last year.
These are the arguments that may justify the choice of Portugal as the destination country for many Britons: significantly lower cost of life, being one of the safest countries in Europe, the good conditions created by the government, or just by investing in Portuguese territory you may fit for a Golden Visa application.
Golden Visa and Brexit…
With Brexit, UK nationals no longer benefit from the European right of free movement and created the necessity to look for other options like a Golden Visa. The Trade and Cooperation Agreement establishes a distinction between short and long term stays. British nationals only benefit from free entry into Portugal for tourism, for 90 days every 180 period. Although there are other options such as the Income visa, or Golden Visa.
It will be necessary to obtain a visa at the Portuguese Consulate in the United Kingdom to be in Portuguese territory for more than 90 days, except if you already have a Golden Visa. There are different immigration options: a visa for working purposes, the passive income visa, and a visa for highly qualified professionals. And the Golden Visa which is the most flexible option, depending on making an investment in Portuguese territory and it only requires a 7 days stay per year in Portuguese territory.
Golden Visa requires what kind of investment?
The investments regarding the Golden Visa acquisition can have a financial focus, or it can be through real estate investment (acquisition of at least one property). Also an option is the creation of jobs, creation of companies or strengthening their social capital. Or even through support of artistic initiatives, technological development, or scientific research activities. Golden Visa is one of the most searched, due to its amplitude of investment options.
The law defined a minimum investment amount. In order to obtain a Golden Visa or apply for it, depending on the investment option and starting at € 200,000.00. From July 2021, the minimum investment values for Golden Visa will be subject to updates, particularly with regards to real estate investments, and will also be subject to some geographic restrictions in the Portuguese territory. But remember, as said before, Real Estate is not the only investment, you may choose different ways to apply for Golden Visa.
Golden Visa or NHR regime?
Portugal has the NHR regime – Non-Habitual Tax Residency, a special tax regime that aims to attract to the country professionals who exercise activities of high added value or intellectual property. Or pensioners who are seeking to see reduced their tax burdens in Portugal, changing their main residency to Portugal. This regime is different from the immigration process, as was already said, but also from the Golden Visa regime.
This Non-Habitual Tax Residency status can be enjoyed for 10 years and grants interesting tax benefits that vary depending on the type of income received by the new residents. Contrary to the Golden Visa regime, this NHR status has the obligation of having the main residency changed to Portugal. For example, income obtained in Portugal derived from dependent or independent work activities will benefit from a fixed tax rate, at PIT level, of 20%.
Golden Visa and NHR avoid double taxation?
Regarding taxpayers who obtain income from abroad, they do not pay taxes in Portugal provided that the income is taxed in another country. This also applies to Golden Visa regime. In case of a pensioner, the income will be subject to a tax rate of only 10% in Portugal. In terms of passive income, taxation may even be inexistent in Portugal! But if your goal is to create a connection to Portugal without staying for long periods in Portuguese territory, the best way is perhaps apply for a Golden Visa.
In all cases, the taxpayer who changes his tax residency to Portugal under this regime will benefit from the advantages resulting from the tax agreements that Portugal has entered into with several States to avoid double payments, and will be able to see their capital not being taxed. When thinking of applying it is important that all the information is accurate, the benefits of a Golden Visa are very different to a residency or a citizenship and mistakes may be made.
Cryptocurrency an investment valid for a Golden visa application?
Special treatment will be given to cryptocurrency. In fact, at a worldwide level, Portugal is one of the few countries that do not tax digital currencies because it is the understanding of the Portuguese Tax Authority that cryptocurrencies cannot be considered “currencies”. Without any changes announced in the State Budget for 2021, the lack of rules in tax law will remain. Therefore if the goal is to invest in Portugal perhaps it will be safer by applying to a Golden Visa.
As such, it is not a surprise, the notorious growth of the foreign population – a 22.9% increase in the last year –that has decided to seale in Portugal, benefiting from immediate access to Portuguese nationality, and consequent European citizenship for their children who are born in Portugal, and for themselves after 5 years.