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Residence permit in Portugal for financially independent individuals

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Portugal
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Moving to Portugal is an easy task for wealthy foreigners that just need to buy or rent housing and prove sufficient subsistence funds in the bank. The immigration programme for the financially independent is simple and accessible for many.

A Portuguese residence permit for the financially independent is meant for the residents-to-be that will be receiving their main income from outside of Portugal. It is often called “a residence permit for the seniors”. In fact, this residence permit is available for seniors, businessmen and property owners with passive income.

A residence permit for the financially independent is issued to expatriates that buy or rent housing in Portugal and dispose of the funds required for the entire family to live on for twelve months. Children of expatriates may go to school or attend a university, and their relatives may use Portuguese healthcare services. 

A foreigner obtains a D7 national visa valid to enter Portugal. The D7 visa is valid for four months, over which the foreigner must obtain the first residence permit for one year from the Immigration and Borders Service (SEF). The first residence permit may then be extended for two years and another two years, and an application for permanent residency or citizenship may be made in five years.

The first residence permit does not entitle holders to legal employment; however, such work prohibition is usually lifted upon its extension. No restrictions are imposed on sole proprietors or business startups.

Advantages of the programme

Free travel across the EU. Residence permit holders in Portugal do not have to obtain Schengen visas to travel across the EU or Schengen countries. A residence permit allows its holders to live permanently in Portugal and for three of each six months in the other EU countries.

Residence permit for one year with an extension option. A residence permit may be extended if the qualifying requirements of the programme are still met.

Residence permit for the entire family. Close relatives, such as a spouse, underage child, unmarried child of age studying in a Portuguese university, underage sibling, dependent parent, may obtain residence permits for a family reunion. 

Permanent residency and citizenship in five years. A foreigner obtains permanent residency in Portugal after living for five years in the country and may make an application for Portuguese citizenship at once. Portugal offers one of the fastest tracks to naturalisation in the EU. An application for a passport may be made after living for ten years in Spain or Italy and for seven years in Greece.

Dual citizenship. Portugal recognises dual citizenship. A foreigner does not have to renounce citizenship in their home country.

Programme requirements

Permanent housing in Portugal. A foreigner must purchase or rent for a long term an apartment or a home in Portugal. There is no requirement for the minimum housing price, but it is advisable to choose a property for sale at an arm’s-length price and not lower. Preference is given to real estate owners.

Passive income. A foreigner must show a proof of passive income that does not depend on their location. Their funds must exceed the subsistence level in Portugal — €635 per month or €7,620 per year. An applicant moving with family must add half of the subsistence amount for each adult family member and one third of the subsistence level for each child. The income may be generated by rent, bank dividend, pension, business profits, intellectual property, securities, etc. The simplest way is to show the entire amount on a bank account.

Cash in bank sufficient to live in Portugal for one year:

  • At least €7,620 — for one applicant,
  • Additionally, €3,600 — for each adult, €2,160 — for each child.

This is the minimum qualifying for the programme and making eligible for a residence permit in Portugal. Note that the higher the amount shown by a financially independent applicant is, the higher are the chances of a favourable decision.

Permanent life in Portugal and tax residence. A foreigner living in Portugal for at least 183 days a year automatically becomes a Portuguese tax resident. New tax residents are entitled to tax benefits.

Tax benefits. Foreigners willing to become tax residents of Portugal may apply for a special tax status of non-habitual residents. This tax status is valid for ten years and entitles residents to tax benefits, including a reduced income tax rate of 20%. 

Foreigners are also exempt from taxes on the income generated outside of Portugal. There are no inheritance, gift, or property taxes. Non-habitual residents may transfer funds to Portugal and abroad without any commission fees.

Steps to obtain a residence permit for the financially independent

Step 1 — Consult a lawyer. A lawyer will give you advice on participation in the programme, help to assess the costs, and draft correctly the documents.

Step 2 — Buy or rent housing. Experts at Tranio will help to select an apartment or a home in Portugal, get a taxpayer number, and open an account with a Portuguese bank.

Step 3 — Make an application to a consulate of Portugal. Consult a consular office of Portugal and submit documents for a D7 national visa. It takes no more than two months to process the documents.

Step 4 — Come to Portugal on a D7 national visa. The D7 national visa is valid for four months.

Step 5 — Register with the Immigration and Borders Service (SEF). A foreigner has four months after coming to Portugal to apply for a residence permit to SEF. An application is made by preliminary appointment. 

Step 6 — Obtain a residence permit. After the application is approved, a residence permit is sent by mail to the registered address in Portugal within one or two months.

Documents for a visa 

  • A visa questionnaire,
  • A foreign passport,
  • A national passport,
  • Two colour passport-size photos,
  • Pensioner’s identity document (for retirees),
  • A health insurance policy covering all medical costs, including emergency care and potential repatriation,
  • A clean criminal record from the applicant's home country,
  • (Own or leased) housing proof in Portugal — real estate title documents or a long-term lease contract,
  • Proof of sufficient funds for life in Portugal — a Portuguese bank statement, a housing lease contract, proof of dividend or pension entitlement, etc., 
  • Proof of relation for family members: a marriage certificate, a birth certificate,
  • A Portuguese taxpayer number,
  • A payment receipt for fees.

Expenses

Purchase or lease of housing in Portugal. Real estate in Portugal is cheaper than in the neighbouring countries. The same amount as elsewhere buys in Portugal an apartment of a larger size or in a better condition. The average price of housing in Portugal is €1,100/m2, whereas the housing prices in neighbouring Spain level at 1,800/m2.

The average rental price of a one-bedroom apartment in Portugal is 500–600 per month.

Registration of purchased real estate. The taxes, including stamp duty, the agent’s commission fee, legal and notarial fees, amount to 9–10% of the property price.

Stamp duties. A consular fee, fees of a visa centre, and residence permit costs amount to about €250 per applicant.

Legal costs. The amount depends on the number of family members and the rates of a legal company ranging on average from €3,000 to €8,000.

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    Tranio’s managers offer advice on buying real estate in Portugal
    Anastasia Istomina
    Real Estate Expert Tranio in Portugal
    +44 17 4822 0039
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