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Non-habitual residents (NHR) Portuguese special tax regime

NHR individuals can benefit from the special personal income tax (“PIT”) regime for a ten year period. This regime is applicable both to Foreign source income and Portuguese source income as follows:

Foreign source income

Employment income

Employment income can be exempt from PIT provided that:
• It is taxed in the source State according to the applicable Tax Treaty; or
• If no Treaty is applicable, the income is effectively taxed in the source State and it is not deemed as derived in Portugal.

Pension income

The NHR provides for exemption (with progression) on foreign pension income, if:
• The income is taxed in the other country in accordance with the Double Tax Treaty (DTT) between Portugal and that country; or
• The income may not be regarded as Portuguese source in accordance with domestic legislation. Pension income is considered as being from Portuguese source only if it is paid (or borne) by a tax resident entity or permanent establishment in Portugal.

Most of the DTT’s grants exclusive taxation rights on pension income to the country of residence, but in practice, foreign pension income may be excluded from taxation in Portugal and in the country of source.

Other income

Foreign source dividends, interest, capital gains and rental income, together with self-employment and professional income (in this case, only if derived from high value added activities), can be exempt from PIT if:

The income can be liable to tax in the country of source, according to the applicable Tax Treaty or to the OECD Model Tax Convention; and
• It is not deemed derived in Portugal; and
• It is not deemed obtained in a tax haven

Portuguese source income

Employment and self-employment income can be liable to a special 20% flat rate if derived from high value added activities of scientific, artistic or technical character performed in Portugal, as listed in a Ministerial Order.  Examples of high value added activities: Architects, doctors, university teachers, designers, IT technicians, engineers, researchers, liberal professions, investors and managers under certain conditions.

Other types of domestic income received by NHRs are liable to PIT according to the rules applicable to ordinary tax residents.

Qualifying for the status

To qualify as a NHR, an individual must meet the following requirements:
• Be tax resident under Portuguese domestic legislation; and
• Not have been taxed as a Portuguese resident in the five years prior to taking up residence in Portugal.

Registration as NHR

Recognition of this status is not automatic and requires activation by attending to the following formalities:
• Application for a Portuguese taxpayer number;
• Registration as tax resident;
• Application for the NHR status.

GOLDEN RESIDENCE PERMIT IN PORTUGAL

Non European Union citizens are able to obtain in Portugal a residence permit that enables them to freely travel within the Schengen area. This Investor Temporary Residence Permit (commonly called “Golden Residence Permit") is granted if an investment in the country that leads to one of the situations below is made:

• Transfer of capital in an amount equal to or above € 1.000.000,00;
• Creation of at least 10 jobs;
• Acquisition of real estate property in an amount equal to or above € 500.000,00;
• Purchase of real estate property, with construction dating back more than 30 years or located in urban regeneration areas, for refurbishing purposes, in an amount equal to or above € 350.000,00;
• Capital transfer in an amount equal to or above € 350.000,00 for investment in research activities conducted by scientific research institutions involved in the national scientific or technologic system;
• Capital transfer in an amount equal to or above € 250.000,00 for investment in artistic output or supporting the arts, for reconstruction or refurbishment of the national heritage, notably through local and central authorities, public institutions, public corporate sector, private foundations  of public interest, etc.;
• Capital transfer in an amount equal to or above € 500.000,00, for purchasing shares in investment funds or in venture capital geared to capitalize small and medium companies that, in turn, must present a feasible capitalization plan.

In general, the request to obtain a GRP should be submitted directly in SEF (Serviço de Estrangeiros e Fronteiras – Portuguese Immigration Service), by appointment and the presence of the applicant with the following legal documents:

• Application form;
• Passport or travel document with a validity of at least three months;
• Valid Schengen visa and proof of lawful entry in Portugal;
• Proof of health insurance issued within the prior three months;
• Sworn affidavit by the foreign national, attesting that the same will comply with the minimum requirements regarding the investment activity in Portugal;
• Declaration issued by the Portuguese tax authorities and social security attesting the inexistence of any debts of the applicant to the said entities; issued within the prior 45 days;
• Criminal record certificate of the country of origin and of the country where the applicant has resided for more than a year, duly recognized by the Portuguese authorities, translated into Portuguese and issued within the prior three months;
• Proof of one of the types of investment mentioned above.

Non European Union citizens are able to obtain in Portugal a residence permit that enables them to freely travel within the Schengen area. This Investor Temporary Residence Permit (commonly called “Golden Residence Permit") is granted if an investment in the country that leads to one of the situations below is made:

• Transfer of capital in an amount equal to or above € 1.000.000,00;
• Creation of at least 10 jobs;
• Acquisition of real estate property in an amount equal to or above € 500.000,00;
• Purchase of real estate property, with construction dating back more than 30 years or located in urban regeneration areas, for refurbishing purposes, in an amount equal to or above € 350.000,00;
• Capital transfer in an amount equal to or above € 350.000,00 for investment in research activities conducted by scientific research institutions involved in the national scientific or technologic system;
• Capital transfer in an amount equal to or above € 250.000,00 for investment in artistic output or supporting the arts, for reconstruction or refurbishment of the national heritage, notably through local and central authorities, public institutions, public corporate sector, private foundations  of public interest, etc.;
• Capital transfer in an amount equal to or above € 500.000,00, for purchasing shares in investment funds or in venture capital geared to capitalize small and medium companies that, in turn, must present a feasible capitalization plan.

In general, the request to obtain a GRP should be submitted directly in SEF (Serviço de Estrangeiros e Fronteiras – Portuguese Immigration Service), by appointment and the presence of the applicant with the following legal documents:

• Application form;
• Passport or travel document with a validity of at least three months;
• Valid Schengen visa and proof of lawful entry in Portugal;
• Proof of health insurance issued within the prior three months;
• Sworn affidavit by the foreign national, attesting that the same will comply with the minimum requirements regarding the investment activity in Portugal;
• Declaration issued by the Portuguese tax authorities and social security attesting the inexistence of any debts of the applicant to the said entities; issued within the prior 45 days;
• Criminal record certificate of the country of origin and of the country where the applicant has resided for more than a year, duly recognized by the Portuguese authorities, translated into Portuguese and issued within the prior three months;
• Proof of one of the types of investment mentioned above.