Residence permit of Portugal: rules and conditions for registration
The residence permit in Portugal under the Golden Visa system is considered to be one of the most sought-after and popular naturalization programs for foreign residents in the country. It is currently one of the most successful Residence permit through Investment programs in the world. It began at the end of 2012 and allowed thousands of families to obtain the long-awaited status.
Since 2012 more than six billion euros of investments have been attracted to the country’s economy thanks to the Golden Visa of Portugal program. 9,000 residence permits (ARI) were issued for investors and 16,000 residence permits were issued to family members of investors.
To better understand the amount of investment consider the following: €6 billion total since 2012 is the investment in Portugal of about €700 million per year, €55 million per month, €2 million per day (mainly in the real estate market).
The Golden Visa scheme has become one of the most successful and sought-after residence permit through investment programs in the world due to the attributes of Portugal (cleanliness, safety, beauty), an acceptable entry level of €500,000 and not too demanding and steep conditions and rules.
Golden Visa: program description
For those who are interested in the fastest option to obtain citizenship, the Golden Visa of Portugal program or the Portugal Golden Investment Visa may be the best solution. This immigration program was developed by the state specifically for foreign residents from countries that are not part of the European Union and the European Economic Area.
To obtain a temporary residence permit the applicant must have a certain amount of finance, which will be used to invest either in the purchase of real estate objects, or in the acquisition of shares in local companies, or in the establishing of their own business with the opening of job opportunities for native Portuguese.
Benefits of the Golden Visa: programs for investment
If you plan to apply for Portugal permanent residence status in the future with further naturalization and obtaining official citizenship, the Golden Visa will be the best option and the shortest way to obtain a passport.
The program is chosen due to a number of advantages, among which is the opportunity to choose between several different investment options. Depending on your goals and objectives, as well as financial capabilities, you can choose the option of buying a real estate object in the amount starting from €350,000 or investing in government bonds, for example (in the amount starting from €2 million).
Participants of the program do not take an exam in knowledge of the language and history. They do not need to reside permanently in the country for 6 months annually, as people who have obtained a residence permit under the standard procedure do.
The time you have to spend in Portugal is minimal: you only need to spend 7 days in the country during the first 2 years and 14 days during each of the next 2-year periods. You will be able to visit all countries of the Schengen area and travel around them. This is the greater part of Europe, with the exception of the UK.
At the end of the five-year residence visa, you can prolong it or apply for Portuguese citizenship. The Golden Visa allows you to live, work and study in Portugal. You can naturalize all members of your family, such as your spouse and dependent children, for example.
Finally, the quality of life should not be discounted: Portugal is a wonderful country from this point of view. The climate, security, education systems, health care and infrastructure here are first-class, as hundreds of our fellow citizens who obtained Portuguese citizenship have already seen.
Who can obtain a residence permit in Portugal
Any citizen of a country outside the European Union, the European Economic Area, and who is not a resident of Switzerland can apply for the Golden Visa. This provision is also valid for post-Brexit UK applicants.
Applicants must be at least 18 years old, have no outstanding convictions, and have confirmation of a legal source of income in order to participate in the Golden Visa of Portugal investment program. Except for the applicant, his or her spouse, own or adopted children, as well as dependent parents are entitled to a residence permit in Portugal in 2021.
Who can obtain a residence permit of Portugal
What do you need to apply for a residence permit in Portugal? In addition to the Golden Visa application itself, the following documents are required:
- A copy of the passport or other official government-issued identity document.
- Confirmation of qualifying investments made by the main applicant individually.
- Declaration from a Portuguese financial institution confirming the transfer of funds.
- Confirmation of health insurance: in Portugal it should be issued by the National Health System and outside Portugal – by an international insurance company.
- Information about the absence of a criminal record of the applicant in the country of current residence and in the country of origin (if they differ). The certificate is valid for no more than 3 months.
- A completed form authorizing the Immigration and Borders Service (SEF) to access criminal records in Portugal.
- A certified declaration of compliance with the minimum investment requirements for the required period of five years.
- Documents confirming good standing in the Portuguese tax and customs service and the social security system. These are valid within 45 days.
- Photos of the established sample.
- Confirmation of payment for application.
We draw your attention to some changes in the program for obtaining an investment residence permit for 2022. Starting from January 2022 only certain areas and regions of Portugal will be eligible for the program.
Real estate in densely populated areas and most coastal regions will not be considered. This is due to the fact that demand exceeds supply in places such as Lisbon, Porto and Algarve.
The government has been concerned about providing the local population with affordable housing and so the Golden Visa program will also operate in the hinterland areas (although some parts of Algarve are still of good quality). Commercial and tourist real estate objects can still be purchased throughout Portugal.
Investment options for a residence permit in Portugal
This program provides for obtaining a Portuguese residence permit for a period of 2 years and it can be prolonged in the future. The main investment options for participation in this program are:
- Acquisition of real estate (one or more objects) in the amount starting from €350,000;
- Opening deposits, purchasing government bonds and other economic investments in the economy in the amount starting from €250,000;
- Registration and opening of your own company, which will create job opportunities for the natives (the amount and time limits are not specified, the main thing is to pay taxes and comply with the requirements of local legislation).
The most popular option among our fellow citizens is the first one, as the least expensive and, in the long run, more profitable. You may well let out the purchased property for lease, for example, receiving additional financial resources.
In addition, real estate objects are always growing in value – on average this growth rate varies from 3 to 7 percent per year. In five years you have the right to sell the purchased property at a better price, returning your investment with a substantial profit.
Also in recent years options with investments in science (amounts starting from €350,000), cultural heritage (amounts starting from €250,000), as well as in venture funds (amounts starting from €350,000) have become popular. Each investor selects the most understandable and profitable type of investment for himself or herself and the task of our company is to explain all aspects and nuances of the made decision.
Investment in real estate objects for obtaining a residence permit in Portugal
From the very beginning of the program this option of naturalization remains the most popular among investors who want to get a temporary residence permit without any worries and hassle in the shortest possible time. About 95 percent of applicants choose to invest in real estate objects.
What is the amount of investment in real estate objects? There are two main options:
- To purchase real estate objects at the amount of more than €500,000. However, if it is an area with a low population density the minimum amount is reduced by 20% to €400,000.
- To purchase a real estate object older than 30 years in an urban rehabilitation area and to repair (renovate) it within a five-year period. The investment will amount to a minimum of €350,000, however, if it is an area with a low population density the minimum amount is reduced by 20% to €280,000.
The minimum investment amount in real estate objects is the total amount of repairs and initial investment in real estate objects. In addition, these amounts can be distributed among several real estate objects.
Two or more people may invest larger amounts if the total investment covers the number of applicants. In other words, you can jointly purchase an apartment, apartment hotel or a house together with another applicant, if the cost of the object starts from €1 million.
Establishing or buying a ready-made business in Portugal for obtaining a residence permit
Residence in Portugal can be formalized by establishing your own business or buying out an existing one. If you’re a business owner, this might be an interesting solution because it’s not tied to rigid financial constraints.
You will be required to register a company that will operate in Portugal and pay taxes. In addition, vacancies for 10 natives must be reserved in a new company on a permanent basis within three years.
Many investors are attracted by the conditions for work and business. In Portugal, as in all European countries, everything is transparent and predictable. Your business cannot get under a hostile acquisition, and taxes will not increase every year becoming an unbearable burden for small and medium-sized businesses.
The country is moving towards foreign investment, having simplified the procedure for registering new companies as much as possible. It may seem incredible, but here you can establish and register your business in just an hour: for this you need to collect a minimum package of documents and fill in an application form.
What is the best area for opening your company? As practice shows, most often investors turn their attention to the tourism industry and everything connected with it. Tourism is the most important source of income, annually bringing to the budget over 10 percent of the total gross profit.
You can also obtain a residence permit of Portugal when acquiring existing companies. To do this, it is enough to buy shares of a Portuguese business in the amount of €1 million. Which companies are worth your attention? First of all this is a business related to the tourism industry, but the list is far from limited to it.
Of course, resort hotels, restaurants, casinos are a good and profitable investment in many ways. However, you can consider alternative solutions, such as:
- Fish and seafood production;
- Transport logistics;
- Port logistics and warehouses;
- Manufacturing of ceramic products;
- Production and import of wine;
- Cultivation of olives and production of olive oil.
The best areas for business activities are traditionally the island of Madeira and the Azores. It is in these regions that the rules of the free economic zone with minimal taxation apply.
Investment in public funds or restoration of cultural heritage for obtaining a residence permit in Portugal
The minimum cost of obtaining a residence permit in Portugal is possible in this particular investment option. You will need to purchase a share in a public Portuguese fund operating in the country. The contribution should be at the amount starting from €350,000.
The conditions are as follows:
- Refund is possible after a five-year period;
- An investment or venture fund must have Portuguese companies among its clients and invest in them at least 60 percent of the funds invested in it.
The program for obtaining a temporary residence permit for the restoration and support of the cultural heritage of Portugal is even cheaper and more accessible. The investor needs about €250,000, which will be invested in such options as:
- Development of children’s art schools;
- Support for sculptors;
- Construction of new and reconstruction of old natural parks and so on.
Establishing a start-up in Portugal for obtaining a residence permit
How to obtain a residence permit in Portugal by opening your start-up project? The Ministry of Economy of Portugal has offered this program relatively recently, and it is quite popular among applicants. You will need to develop and implement an effective and profitable project that will interest potential investors.
A start-up is evaluated according to several parameters, including:
- Benefits for the Portuguese economy;
- Business innovation;
- Relevant experience and skills of the applicant to effectively manage the project and hired personnel;
- Sufficient personal capital to launch a start-up project;
- Quick profitability of the project;
- Hiring a team among the natives.
An application for participation can be submitted at any time, which is quite convenient for the applicant. You just need to fill in an application form, which shall be sent via Email.
Comparison of investment programs for obtaining a residence permit in Portugal
Don’t you know how to obtain a residence permit in Portugal in the best way? We have compiled a simple table for you, which can become an assistant in a difficult choice. As a rule, the lion’s share of investments falls on the acquisition of liquid real estate objects. Next in popularity is the acquisition of securities (government bonds, for example) and the establishing (purchase) of companies. Everyone decides independently what option to choose taking into account preferences, expectations and tasks.
Investment in real estate objects
This option is appropriate for investors who have sufficient savings and a desire to minimize risks.
The benefit of this option is the opportunity to live in Portugal and let housing out for lease.
Investments in securities
This option is appropriate for people who want to have the possibility to live and travel around Europe without visas and have the opportunity to invest in Portuguese securities for a long period of time.
Establishing a company in Portugal
It is an ideal option for those who want to develop their business in Europe. In this case a residence permit in Portugal is a bonus to the business.
Comparison of a residence permit and Golden Visa programs
| For the ordinary applicant | For the investor | |
| What is included in the price | Only administrative expenses | Investment at the amount starting from €250.000, taxes and administrative expenses |
| Is it necessary to know Portuguese | It is necessary to pass an exam | Exam shall be taken when applying for citizenship |
| Who can obtain a residence permit | Only the applicant | The entire family of the applicant |
| How long does it take to obtain citizenship | 10 years | 5 years |
| How many days per year is it necessary to live in the country | 183 days | 7 days |
| Probability of rejection | Medium | Low, but due diligence is required |
Conditions for prolongation of a residence permit in Portugal
Can a residence permit be prolonged? It is possible and necessary, since this is the main condition for obtaining the status of a permanent resident and citizenship in the future. Documents for status renewal must be submitted in advance, 2-3 months prior to the end of the current visa status.
It is worth noting that during the period of quarantine restrictions, the Portuguese migration authorities have made certain procedures for prolongation of a residence permit easier. You can apply online by contacting the services of our company’s specialists, for example. Temporary status is prolonged twice and after that you obtain permanent residence, which shall no longer be prolonged until you receive a passport.
The procedure of obtaining Portuguese citizenship
Obtaining a passport and citizenship in the country is possible only after a five-year period of legal residence in the country. Unlike many other European countries, you do not need to renounce your native citizenship when obtaining a passport, since double citizenship is allowed at the legislative level in Portugal.
Portugal residence permit for retirees
Retirees from Ukraine, Russia and other countries of the former USSR can apply for a temporary residence permit by obtaining a D7 standard visa. This document can be obtained if the retiree can confirm the availability of sources of sufficient income abroad. The amount of these incomes is determined annually by the Portuguese migration authorities and depends on the minimum standard of living.
This residence permit does not give the opportunity to be officially employed within the country. The applicant must confirm that personal funds from foreign income allow him or her to reside in Portugal for more than 3 months per year.
Taxes arising from obtaining the Golden Visa
It should be noted right away that taxation on the mainland and on the island of Madeira, for example, where the free economic zone is applied, is significantly different. The tax rate on the island is about 5% while on the mainland it is 4 times higher.
VAT rates can vary from 6 (preferential) to 23 (standard) percent. Profit is taxed up to 35 percent, and the taxation of real estate objects is determined by their location and ranges from 0.3 to 0.8 percent. In addition, you pay a one-time fee when you purchase or sell them, which is 0.8 percent.
You can also apply for tax residency if you live in the country for at least 6 months per year. This status has quite favorable taxation conditions, down to exemption from payments for up to 10 years.