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European Residence Permit

On August 9th 2012 new legislation was approved that allows nationals of a Non Schengen member country to obtain a residence permit linked to an investment activity in Portugal and travel without restrictions inside Schengen.
To obtain the residence permit the investor must fulfill one of the following criteria (directly or through a company):
• Acquisition of real estate with a value of at least 500.000,00 Euros; OR
• A capital transfer of at least 1.000.000,00 Euros. The funds must be hold in a Bank in Portugal (not necessary a Portuguese bank, but a bank with authorization to do businesses in Portugal) or invested in acquisition of shares of a company; OR
•  The creation of, at least, 10 jobs;
The investor must stay in Portugal for at least:
• 7 days in the first year; and
• 14 days in the subsequent two years.
The visa is obtained for a one year period renewed for a two years period in the first five years. To renew the visa the investor must continue to fulfill the criteria. After the first 5 years permanent residency authorization is obtained.
Portuguese nationality can be obtained (one year after permanent residency).
Family reunification can be obtained (it is possible for the bearers of the Residency permits to bring the rest of the family).
Possibility of travel freely in the Shenguen area.
The applicant to the golden visa may benefit from the non habitual residents tax regime. 


 

Other advantages:

 

Properties bought may be rented freely 
• It is possible to finance the acquisition with a loan above the limit of 500.000 Euros
• It is possible to obtain with the signature of a promissory contract
• It is possible to do the investment throw a company (instead of owning the property in his own name)
• It is possible to buy more than one property (example: two of 250.000 euros)
• Co-ownership is possible (2 beneficiaries with a property of 1.000.000 euros)
• It is possible to fulfill the criteria of a capital transfer OR job creation and incorporate a company in IBC (Madeira Free Trade Zone) and benefit from a Corporate Tax Rate of 5% (and access to all Portuguese Tax Treaties and European Directives)

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Frequently Asked Questions
  • How long will it take to make a decision regarding the residence permit?

    Since this procedure is new, the exact time for the approval is yet unknown. However, the general rule regarding the time for a decision from the Portuguese Administration is less than 30 business days.

  • Is it possible to buy more than one property, of which total value is over 500.000 euros?

    Yes, because the regulations mention “properties” in the plural: “the acquisition of real estate properties in the value equal or superior to 500.000 euros. As an example, one investor may for example, acquire two properties in the value of 250.000 euros each.

  • What are the conditions for a residence permit?
    The Golden Residence Permit is a "residence permit" to enter and remain in the Portuguese territory, for investment purposes (hence the generic, more correctly, ARI – Autorização de Residência para Actividade de investimento) permits for investment).
    For the purpose of obtaining a Golden Residence Permit for the investment activity, inquire at least one of the following investments in Portugal:
    To invest acquiring a property of at least 500.000 euros, or To make a capital investment of at least 1 million euros, or To create at least 10 jobs in Portugal.

    
  • Can the investment be made through a company?

    Yes, the investment can be made through a company, as long as the investor’s personal share in the company fulfills the minimum amount of investment.
    For example: a person holding 50% of the shares of a company, to buy through that company, would need to buy a property of at least 1.000.000 euros (so that, proportionally, his investment will be 500.000 euros).

  • For how long is valid initial residence permit?

    The initial permit is valid for1 year. Residence permit shall be renewed subsequently for a period of 2 years.

  • What are the taxes and fees for purchasing real estate in Portugal?

    Besides the sale price of a property in Portugal, there are extra costs which should be taken in consideration while acquisition the real estate. In addition to several taxes (Municipal Tax on Real Estate Transfer, Municipal Tax on Real Property, Stamp Duty — IMT, IMI and IS) the purchaser of real estate must cover at least Notary fees and Real Estate registration fee.
    The Tax on Real Estate Transfer (Imposto Municipal sobre Transmisões, IMT) is usually calculated through a percentage applicable to the property value. Its exact value depends on the value and use of the property. Estimates are the next:
    - Rural property — 5%;
    - Urban and other properties — ~6,5%;
    - If the acquirer is a tax resident in an blacklisted jurisdiction — 10%.
    - Urban properties or property units considered solely as a permanent place of residence — varies from 6% to 8% (depending on the price of acquisition).
    Municipal Tax on Real Property (Imposto Municipal sobre os Imóveis, IMI) is an annual tax. The rate of IMI tax depends on many conditions: in which part of country the real estate is situated, if this real property is for habitation or for commercial purposes, if it is rustic, urban or mixed real estate, and finally — each municipality of the country puts its own rates for IMI. Normally this tax varies from 0,5% to 0,8% from the value of the property. According to the Portuguese law, only hotels are free from this type of tax.

  • What are the required documents for a residence permit application?

    The basic documents are:
    Application form
    Passport or another valid traveling document
    Proof of legal entry and permanence in national territory
    Proof of health insurance
    Signed application enabling consultation of the Portuguese Criminal Records by SEF
    Criminal Record Certificate from the relevant authority of the applicant’s home country or from any other country where he / she resided for over a year
    Proof of the requirements’ fulfilment.
    All foreign documents must be officially translated to Portuguese and apostilled (if no apostille is available, the certification of the documents and its translation to Portuguese is made in thePortuguese Consulate in the country of origin of the documents).
    Useful tips:
    In most of the Portuguese legal documents, the applicant has to supply:
    Names of both parents (required in the bank, notary office, local municipality and in another row of institutions)
    Marital status or civil marriage status should be proven, whether there is joint property or personal assets / mutual assets

  • What are the taxes for selling real estate?

    When selling,if there are capital gains the sellers need to pay a capital gains tax. In general, the tax rate of capital gains is about 25%, but detailed analysis and simulations can and should be made on a case by case basis.

  • If an investment was made before the publishing of a new law, can the investor still apply for the residence permit?

    No. The Golden Residence Permit Programme is applicable only for the investments made after the law is in force, which has taken effect from October, 8th, 2012.

  • Is there a minimum period of time for permanency in the Portuguese territory?

    The applicant shall deliver evidence that he / she complied the following minimum periods of permanence in National territory: 7 days in the first year and 14 days in the subsequent 2 years. By reducing the amount of days to stay in the country this makes the programme more attractive and appeling to potential international investors from longhaul destinations.

  • How can I get the Golden Residence Permit acquiring the real estate?

    Click here to see what are the steps to obtain residence permit through acquistion of real estate property with a value of, at least, 500 thousand euros.

  • What is the identification criteria for the investment value, according to the contract value, or the taxable value?

    It is the contract value mentioned in the Purchase Contract (Escritura).

  • Is it possible to make property investment in co-ownership?

    Yes, the property can be acquire in co-ownership, if each co-owner making an investment of a minimum of 500.000 euros.

  • As an investor, can you apply for a residence permit before signing the real estate purchase contract?

    Yes, the promissory sale and purchase agreement is acceptable for the initial investor application for residency. The conditions are:
    The acquisition public deed or the promissory sale and purchase agreement with a declaration, issued by a financial institution in Portugal attesting the effective transfer of purchase price or down payment (minimum of 500.000 euros) and
    Updated Land Registry certificate, attesting the registration of the acquisition or the registration of the promissory sale and purchase agreement.
    In case of down payment of 500.000 euros, the actual purchase should take place before the first renewal of the residence permit.