The Golden Visa Portugal program is a hugely popular program designed to help investors gain citizenship in Portugal and the European Union. In exchange for investing in the Portuguese economy (typically through investment funds or real estate), non-European Union resident investors are put on a fast track for residency and a passport.
Portugal already has a fairly competitive tax environment, but the Golden Visa Portugal Tax Benefits delivered on top of this make a huge difference.
What are the Golden Visa Portugal Tax Benefits?
For many investors, there are 4 standout benefits when it comes to Golden Visa Portugal Tax Benefits.
- There is no inheritance tax
Most applicants to the Golden Visa Portugal program are high-net worth individuals. It is clearly very attractive to know that should the worst happen, there will not be any unnecessary obligations for their estate.
- There is no wealth tax
Many countries in Europe (and indeed the world) have seen resurgent and sustained political support for a form of wealth tax. Portugal is distinct from these countries in having no form of wealth tax and no popular demand for introducing one.
- Low property taxes
Although Golden Visa Portugal applicants only need to spend 7 days a year in the country, some investors will want to stay longer and buy a home. In these cases it is good to know that the property taxes (known locally as IMI) are set between 0.3% to 0.8%, with a range of exemptions depending on what you do with the profit and where the house is based.
- Exemption from taxes on income from cryptocurrencies
Most investors like to keep a diverse portfolio, so it’s positive news that anyone investing in cryptocurrencies will not have to pay any tax should they make a profit.
For a large majority, these Golden Visa Portugal Tax Benefits can be combined with the Non-Habitual Residency program to elevate the tax advantages further.
What is Non-Habitual Residence?
While the Golden Visa Portugal program is successful in attracting investors, the Portuguese Government implemented the accompanying non-habitual residence (NHR) tax status to encourage them to stay. The NHR is hugely important to investors, as it confers on them a special tax status for 10 years when they switch their tax residency to Portugal.
What are the tax benefits of NHR tax status?
The NHR tax status lasts for ten years, which is impressive as it delivers a range of extra Golden Visa Portugal tax benefits.
- A flat 20% tax on domestic income
In the event that an investor makes any kind of income for their activities in Portugal, they will only have to pay a flat rate of 20%. This applies to both employment and business income, provided that the activity is a “high value activity”
- Worldwide income is not taxed at all
Any income generated outside of Portugal is not taxed at all. This means any interest, dividends, profits or salaries earned in another country won’t be taxed a second time in Portugal.
- A flat-rate Capital Gains tax
Capital gains taxes (for example from the sales of shares) are fixed at a flat-rate of 28% (with exceptions for rare situations). This provides investors with a competitive and stable background for their investment activities.
- A flat-rate pensions tax
Taxes on pension-based income are subject to just a flat-rate 10% tax.
Does NHR-status mean spending more than 7 days a year in Portugal?
One of the major benefits of the Golden Visa Portugal program is that you only need to physically be in the country for 7 days a year. To be considered a tax resident you typically need to spend at least half the year in a country though. This seemingly puts the NHR status at odds with one of the biggest advantages of the Golden Visa Portugal program.
To be eligible for NHR status though you just need to demonstrate an ability or intention to live in Portugal for this period. This means that it is sufficient to rent or buy a property during that time period, without actually having to live there.
Related article: Golden Visa Portugal: 5 reasons to choose the country
Choosing Portugal with Lince Capital
Lince Capital is a company that helps investors to invest in Portugal. With over 40 years of experience in the Portuguese market, we can help Golden Visa Portugal applicants to invest in the right funds and manage their tax obligation easily. As experts in securing Portugal Golden Visas through the Investment Fund option, we can carefully navigate you through the process. Depending on your investor profile, Lince has two standout funds to consider which are still open to subscription.
Lince Innovation Fund
The Lince Innovation fund is focused on research and development projects across a wide range of sectors such as health, IT and industrial. The minimum investment in this fund is €100,000 and the term lasts for 8 years.
Lince Navigator II
Lince Navigator II is exclusively focused on real estate development projects in the high-value central Lisbon area. The minimum investment for this fund is €100,000 and the term lasts for 7 years.
If you would like more information about Golden Visas or would like to explore how to invest in Portugal, please feel free to contact us.