This is why so many people are looking to move here and Sovereign has a full suite of concierge services to assist clients through the often-arduous process of residency applications.
The Portugal Passive Income Residency Visa also known as a National or D7 visa provides residency status to non-EU citizens who intend to relocate to Portugal and who have a reasonable regular passive income. This visa has been particularly popular with British passport holders who, due to Brexit, now find themselves restricted to the 90/180 day ruling which has come as a shock to many property owners used to being able to spend their winters in their holiday homes.
Sovereign has successfully assisted clients moving from the UK, USA, Middle and Far East. Families have happily settled not only in the Algarve but also in Lisbon and Porto.
Successful visa applicants benefit from:
- The right to live, work and study in Portugal
- Access to Portugal’s education and healthcare systems
- Including dependent children and parents in the application
- Visa-free travel throughout the Schengen Zone
- Qualification for permanent residency or citizenship after 5 years
Passive Income Requirements
Applicants must prove receipt of a regular income, which may be derived from pensions, rentals, self-employment, dividends, or certain categories of investment income. Salaries and savings alone are rarely considered eligible but do contribute to the larger picture.
Minimum income requirements are a percentage of the national minimum wages as follows:
Main Applicant: 100% - €8,460 per annum
Spouse or parents: 50% each - €4,230 per annum
Dependant children: 30% each - €2,538 per annum
It is advisable to hold a minimum amount equal to 12 months income within a Portuguese bank account.
The passive income visa is aimed at those who intend to live in Portugal and so, except in the case of duly justified personal or professional reasons, a temporary residence holder is expected to spend six consecutive months or eight non-consecutive months in Portugal each year.
After that, you can renew your D7 visa every two years. After the five-year mark of holding legal residence, you're eligible to apply for permanent residence, and even Portuguese citizenship if you wish.
Before proceeding with an application for residency in Portugal, it is advisable to take guidance to better understand how income sources will be taxed here. Sovereign’s team are highly experienced in assisting clients with establishing residency in Portugal, applying for the Non Habitual Residency (NHR) and if need be, how best to structure their existing assets to ensure tax efficiency for the ten year period that the NHR regime exists. In almost all cases it proves an exercise that results in substantial gains from effective planning.
Sovereign can also provide a personal tax assessment and simulation which will consider applicants’ worldwide income and will indicate their likely tax situation as a resident of Portugal.
Sovereign’s team assist and guide applicants throughout the application process and their concierge service includes:
- Appointment of Sovereign as the fiscal representative to obtain a Portuguese fiscal number.
- Opening of a personal bank account in Portugal.
- Guiding applicants on the documentation required for their interviews both with the Portuguese Consulate in their current country of residence and subsequently SEF immigration offices in Portugal.
- Registering applicants as tax resident in Portugal.
- Applying for the NHR status.
- Preparing the annual IRS – tax returns.
The NHR programme provides 10 years tax benefits to those establishing tax residency in Portugal.
Pensions are taxed at just 10% and non-Portuguese income of most categories including self-employed income, real estate income (rentals), capital income (interest & dividends) and capital gains on property, will be exempt from Portuguese personal income tax if the source country has the right to tax that income under the terms of a Double Tax Treaty (DTT) signed between Portugal and that country, or the income is taxed in the other country and is not considered as obtained in Portugal, or the income is taxable in any other country following the OECD Model of Taxation.
Salary or self-employed income derived from one of the eligible high-level professions, would be subject to a final flat rate tax of 20%.
Sovereign will discuss the NHR tax regime with applicants to determine whether they qualify for and will benefit from establishing NHR.
Once residency has been established, Sovereign fully qualified accountants and administrators will continue to assist clients with their fiscal obligations and queries providing support and keeping them informed of fiscal matters that may affect them.
This can include:
- Submissions of Double Tax Treaty forms to home country.
- Preparation and submission of tax returns necessary to declare residents worldwide income.
- Registration for self-employment.
Established in Portugal since 1999 Sovereign have the advantage of providing the full fiscal support not only to their resident clients but also to their non resident clients requiring fiscal representation and rental income accounting services.
Additional specialist services from the Sovereign Group include wealth and trust management, structuring of corporate entities (CSP), foreign property ownership, pensions, bespoke corporate and private client insurance, as well as yacht and aircraft registration ownership and management.
The Sovereign Group is proud to have a global reach from a local point of delivery so talk to us today on firstname.lastname@example.org