There are varied reasons why an individual would prefer to move to Portugal.
Some of the reasons include:
Portugal enjoys an amazing climate, especially along the southern coast.
This makes the country an ideal destination for those seeking warmer weather and more sunshine.
Portugal is known for its relatively lower cost of living compared to many other Western European countries.
This makes it an affordable option for retirees and expatriates, who wish to make the most of their money.
Portugal is considered one of the safest countries in Europe, with low crime rates and friendly and welcoming people.
Portugal has a rich cultural heritage and a long history, with beautiful historic cities, architecture, and traditions.
The country is popularly known for its healthcare system, and in recent years, it has become a sought-after destination for medical tourism.
Portugal’s Golden Visa program allows non-EU citizens to obtain residency by investing in real estate.
Thus, making it an attractive option for investors and high-net-worth individuals.
Many Portuguese people speak English, and English is widely used in business and tourism.
Therefore, it is easy for English-speaking expatriates to adapt to the country easily.
Portugal’s strategic location provides easy access to other European countries.
This makes it a convenient base for travel and exploration within Europe.
The Non-Habitual Resident (NHR) tax regime offers favorable tax treatment to foreign residents.
This includes retirees, professionals, and entrepreneurs and makes the country an appealing destination for those seeking tax advantages.
Today, we are going to discuss the details regarding the costs associated with the NHR status.
I already discussed the extensive details and the specific residency requirements.
You can check those articles by navigating the blog section, which also includes detailed information about the Portugal Golden Visa.
If you need any help regarding the Portugal Golden Visa, feel free to contact me.
Let us have a brief glimpse of the Portugal Golden Visa and NHR status before getting to the actual details.
If you want to invest as an expat or high-net-worth individual, you can email me (advice@adamfayed.com) or use these contact options.
You should check government websites for updated cost estimates, as this article might not be fully updated.
Table of Contents
Portugal Golden Visa
The Portugal Golden Visa is a residency-by-investment program introduced in 2012.
The main objective of this program is to attract foreign investment and boost the country’s economy.
With this, non-EU citizens and their families can obtain residency in Portugal through investments in the country.
To get your hands on the Golden Visa, you must qualify for one of the following eligible investments in Portugal:
- Real Estate Investment
Investing a specified amount in residential or commercial properties is the common way of attaining the Portugal golden visa.
This can either be done in new projects or renovation projects.
- Capital Transfer
Making a qualifying capital transfer, such as investing in a Portuguese company, creating jobs, or investing in venture capital funds.
- Job Creation
Creating a specified number of jobs in Portugal through a business venture is another way of getting this residency.
- Scientific Research
Investing in research activities in Portugal would also make a person eligible for the Portugal golden visa.
The Golden Visa initially grants a valid residence permit for one year, which can be renewed for two-year periods.
This can be renewed as long as the investment is maintained by the individual within the country.
After five years of continuous residency, the investor and their family members become eligible for permanent residency or citizenship.
Non-Habitual Resident (NHR) Status
In 2009, Portugal launched the Non-Habitual Resident (NHR) status as a tax incentive to attract retirees and professionals with high-value skills.
This unique tax status allows for a reduced tax rate of 20% or even complete tax exemption on income.
The NHR status is designed to encourage individuals with valuable expertise to make Portugal their home.
To provide them something in return, they are offered favorable tax treatment as an incentive.
How is the Portugal Golden Visa helpful for getting the NHR status?
With the Portugal Golden Visa, you get a pathway for foreign individuals to become residents in Portugal.
Once an individual gets their hands on the Golden Visa and becomes a Portuguese resident.
Upon that, they get the opportunity to qualify for the Non-Habitual Resident (NHR) status.
The NHR status is a tax incentive program that offers a 20% flat tax rate or even a total tax exemption on certain types of foreign income.
However, you should remember that this status is only valid for a period of 10 years.
It is designed to encourage skilled professionals, retirees, and high-value individuals to come and live in Portugal.
They must also meet the specific criteria for the NHR program, such as not having been a tax resident in Portugal in the previous five years.
This particular combination provides foreign investors to enjoy residency in Portugal while also benefiting from a highly favorable tax regime.
It makes Portugal an attractive destination for those seeking investment opportunities and a tax-efficient lifestyle in Europe.
Eligibility
Let us have a look at the eligibility requirements for the Golden Visa program as well as the NHR status.
We’ll begin with the Portugal Golden Visa requirements.
Eligibility for Portugal Golden Visa
Given below are the eligibility requirements for obtaining the Portugal Golden Visa.
- Investment Requirements
First of all, the individual applying for the Portugal Golden Visa should meet the investment requirements we discussed earlier.
This is the primary and most important requirement for obtaining the Golden Visa in Portugal.
- Real Estate Investment Requirement
While making a real estate investment, there are some conditions regarding the minimum investment.
Based on the location, the minimum investment amount might vary from around €280,000 to €500,000.
The €500,000 investment amount can be reduced to €400,000 If the property is located in a low-density area.
Invest €350,000 in a property located in a Portuguese urban regeneration area.
For properties in low-density areas, the investment can be reduced to €280,000.
Whichever project you choose, it must be eligible for investment by the Portuguese Immigration and Borders Service (SEF).
- Job Creation Requirement
At least ten jobs should be provided to Portuguese citizens if opted for the job creation method.
This may differ based on the actual type of method selected for the job creation option.
- Capital Transfer Requirement
The minimum amount of funds that should be transferred to a Portuguese bank account is around €1.5 million.
- Commercial Company:
You can invest at least €350,000 for the creation of a commercial company.
(Or)
You can invest the same to reinforce the share capital of an existing company.
This investment should be resulting in the creation of at least five full-time jobs.
- Scientific Research Requirement
If you choose to Invest in scientific research activities, then those activities should contribute to the development of Portugal.
The minimum investment amount for this method is at least €350,000.
- Company Shares or Investment:
Purchase company shares worth at least €1.5 million or alternatively invest a minimum of €1.5 million in a company.
- Cultural Heritage
Supporting the country’s cultural heritage through investment in preservation or restoration projects is another option for eligibility.
To support the arts and culture, the minimum investment amount needed is at least €250,000.
- Venture Capital
Investing in eligible venture capital funds that support innovative companies is another method to become eligible.
Such funds are regulated by the Portuguese CMVM (Securities Market Commission).
And as I said before, these typically involve venture capital investment in real estate or start-up tech companies.
- Renewal requirements
After the initial granting of the Golden Visa, applicants must fulfill certain requirements to maintain the visa.
This means the investor should maintain the investment for a specified period.
- Clean Criminal Record
As with any other country’s visa requirements, applicants must not have any criminal record.
- Valid Passport
Finally, a valid passport is required to apply for the golden visa program.
Eligibility for NHR status
Having discussed the requirements for the Portugal Golden Visa, let us now look at the eligibility requirements for the NHR status.
- Becoming a Tax Resident
Individuals must become tax residents in Portugal, which can be achieved through the golden visa (if you opt for it).
The tax residency status in Portugal can be achieved by fulfilling any of the following conditions:
— Residing in Portugal for more than 183 days during a 12-month period. It can either be consecutive or not and it can during the start or end of the year of NHR application.
— Living in Portugal for less than 183 days, but for this, owning a real estate property to use it as their primary and usual residence is necessary.
— Being part of the crew of a ship or aircraft on December 31st.
— Holding public functions or duties abroad in service of the Portuguese State.
- Application Deadline
Eligible candidates must submit a complete application for NHR status by March 31st of the year following their registration as a resident.
Late applications might be denied for reasons such as improper preparation or last-minute submission.
- Duration
The NHR status is granted for a non-renewable status granted for a period of 10 consecutive years.
The individual must maintain tax residency in Portugal throughout each of these 10 years so as to benefit from the tax advantages.
It is essential for individuals considering NHR status in Portugal to carefully assess their eligibility.
For this, it is always better to seek professional advice to understand the implications and benefits of this tax status.
Fees
Let us now have a snapshot of the costs associated with the Portugal Golden Visa as well as the NHR program.
Note – These values are based on internet research and the actual fees may differ based on the services you are acquiring.
You can contact me to find the accurate fees associated with the Portugal Golden Visa.
Fees/Costs for Portugal Golden Visa
First of all, you must select the type of investment you intend to make for getting the Portugal Golden Visa.
The minimum investment amount typically ranges between €280,000 to €1.5 million.
Now, let us talk about the fees involved with getting a Portugal Golden Visa.
- Processing Fees
During the beginning of the application, and then at each renewal, you’ll be charged the processing fee.
The processing fee is €533, and an additional €83 is charged per dependent of the applicant.
- Initial Application Fee
This fee is charged only at the beginning of the application for the Portugal Golden Visa.
The initial application fee is set at €5,325 per person (applicant as well as the dependents).
- Renewal Application Fee
This fee is charged every time you renew the Portugal Golden Visa.
The renewal application fee is set at €2,663 per person (applicant as well as the dependents).
- Legal Fees
The legal fees for getting a Portugal Golden Visa will vary based on the law firm you choose to work with.
As the investment amount for this program is hefty, it is best to go ahead with a reputable law firm.
Such a firm would take care of the aspects such as due diligence, application process, renewal process, etc.
Although the fees can be quite higher for renowned law firms, it is best rather than choosing someone new to the field.
In general, the legal fees for the Portugal Golden Visa can be somewhere around €10,000 to €30,000.
This fee should cover your endeavors for a period of five years or so.
One of the best aspects of legal fees is that you don’t necessarily have to pay all the fees upfront.
You can opt for paying the fees in installments based on the completed tasks.
- Other Fees
Let us have a look at some other costs associated with the investment you are making to get the Portugal Golden Visa.
— For Real Estate:
The minimum investment starts from €280,000 and it can go up to as high as €500,000.
The IMI Tax (Imposto Municipal Sobre Imóveis), which is the local property tax, is charged at 4.58% to 6.5%.
The stamp duty is charged at 0.8%.
The notary cost is €1,000.
The exit fees are 5% excluding the VAT (Value-Added Tax).
The commission is 5% excluding the VAT (Value-Added Tax).
There is no performance fee.
There is no management fee.
Finally, the total estimated costs for real estate investment to get the Portugal Golden Visa are approximately around €370,000 to €538,000.
— For Capital Transfer
The minimum investment amount is €1.5 million if you choose this method.
The management fees may typically be around 0.5%.
— For Investment Funds
The minimum investment amount starts at €500,000 for investment funds.
The performance fee is usually around 35% of the profits derived, and the management fees can be around 1.5%.
Fees/Costs for Non-Habitual Resident (NHR) status
Now, let us have a snapshot of the fees associated with the NHR status in Portugal.
Let us start by discussing the types of fees that may be charged for getting this status.
- Legal Fees
Like the Portugal Golden Visa, the NHR program also involves legal fees.
Unlike the high fees charged for the Portugal Golden Visa, the fees for the NHR program are comparatively low.
On average, they can be around a few hundred euros and go up to a few thousand euros on the high end.
- Notary and Document Fees
There are additional fees for notarizing the documents and getting your hands on the official documents.
These fees widely vary depending on the complexity of the underlying process.
- Translation Fees
There might be a requirement for your documents to be translated into Portuguese.
If that’s the case, then the translation services may cost a few hundred euros or more.
- SEF Processing Fee
If you are applying for NHR status through an investment method from the Portugal Golden Visa, then you will be subject to a SEF processing fee.
These fees apply when investing in a qualifying Investment Fund or an investment in a property in a Portuguese urban regeneration area.
The SEF processing fees payable are payable to the Portuguese Immigration and Borders Service (SEF).
These fees can range from a few hundred to a few thousand euros based on your situation.
- Bank Charges
If you are required to make a capital transfer there might be associated bank charges, which can vary depending on the bank.
You may also have to deal with bank charges if you are opening a bank account as part of the application process.
- Miscellaneous Expenses
You must also consider other miscellaneous expenses, such as postal charges or travel expenses.
A few examples and average fees associated with the miscellaneous charges are given below.
— Personalized briefing on the NHR regime as well as your relocation to Portugal can cost around €650.
— Assistance for the arrival or registration formalities can be around €400 per session.
— Application processing for the NHR status is charged with a fee of around €1,000.
— Analysis and preparation of a High-Value Added Activity can set you back by €1,800.
— Filing personal income tax returns can cost around €1,200 to €1,900.
— Ongoing tax and social security advice is available with an hourly charge of €200.
Considering all these fees, the average total cost can range from a few thousand euros to several thousand euros.
It’s very important to research and get detailed quotes from professionals and service providers to get a more accurate estimate.
Tips for applying for the Non-Habitual Resident status in Portugal
First of all, make yourself familiar with the eligibility criteria and make sure that you meet the requirements before proceeding.
This is a very important measure to be taken before the application process to ensure you are all set with the eligibility requirements.
It is suggested to get advice from a professional or a tax advisor who is good with NHR applications.
Make sure you have all the necessary documents with you before you apply for the NHR status.
It is always better to plan for such endeavors in advance so that everything goes accordingly.
Also, pay attention to the deadlines as it is one of the major reasons why an individual’s application may get denied.
Provide complete and accurate information regarding your application for the NHR status.
Understand the tax benefits and know how they can be beneficial for your current situation.
Remember that you only get one year to apply for the NHR status after getting the resident status in Portugal.
If you miss out on this opportunity within that specific time, you will lose the benefits the status has to offer.
Make sure that you are making the most of your NHR status as it is only valid for 10 consecutive years and is non-renewable.
Keep an eye out for the long-term implications of the status if you plan on staying even after the expiry of the status.
Always be attentive to any changes that may be made regarding the NHR status.
If there are any changes in your specific situation, notify the relevant representative or authority.
Making time for all these matters and understanding certain concepts can be troublesome.
Therefore, it is better if you go ahead with the assistance of a professional who is an expert on these.
Bottom Line
NHR status can be extremely beneficial if you want to stay in Europe while having a tax-advantaged scenario.
Portugal Golden Visa can be a great way to obtain NHR status, as it fulfills the tax residency status.
I hope that you were able to find this information useful, especially if you were finding it hard to know the associated costs.
I offer services related to obtaining the Portugal Golden Visa, and if you are looking for someone to help you with that, contact me.
I also specialize in providing top-notch tailored investment solutions to my clients that suit their needs.
With the cross-border expat investment/wealth management services I offer, most individuals achieved financial freedom.
My services range from high-net-worth investment services to retirement solutions, and much more.
If you want someone to cater to your expat financial/investment services, or if you want someone to assist you with the Portugal Golden Visa program, feel free to reach out to me.
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Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.
