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Residency in Portugal

Written on Monday 8 February 2021

Becoming resident in Portugal *normally means becoming a tax resident here. If you’re a freelancer or pensioner, that might not make a big difference to your life but, if you’re still in full-time employment with a UK company, it’s something you’ll need to speak to your company about.

While some companies are fine with their employees living in another country, or moving their employees to a freelance or contractor role, others are unwilling.

*Normally is the key word here: there does seem to be a possibility where you can remain tax resident in the UK, at least temporarily, but have your residency in Portugal (purchasing a property or renting a property). This isn’t normal, however, and so it’s recommended that you get expert help as individual circumstances need to be carefully considered.

Moving After Brexit

Moving to Portugal post-Brexit (31st Dec 2020) is likely to be a little more complicated than before. Hopefully the UK will end up having a better relationship with the EU than other countries do, but until the details of the recent trade agreement are known, the jury is out. 

However, Portugal does have some attractive visas and schemes that are designed to entice people from outside of the EU, particularly affluent or self-sufficient people, to Portugal. These include:

  1. the Golden Visa 
  2. the D7 Visa & Residence Permit.
  3. the Non Habitual Residency (NHR) tax incentive 

These schemes are currently available to non-EU citizens, and UK citizens should be eligible for them in the future. Please keep reading for a more detailed description of each. 

The Three Schemes/Visas

1. Golden Visa Scheme

The Golden Visa Scheme allows those outside of the EU, EEA, and Switzerland to obtain a 5-year residence permit when they purchase a house worth €500,000 or more. However, there are many exceptions where it can be €350,000 or more.

After 5 years, you would have the option of applying for permanent residency (which is renewed every 10 years) or citizenship (which comes with a Portuguese passport).

The benefit of the Golden Visa scheme over other forms of residency is that you only need to spend an average of 7 days per year in Portugal – perfect for those that have commitments elsewhere or want to travel.

However, the Portuguese Government has recently announced the withdrawal of the Golden Visa scheme as part of the 2020 Budget. The scheme due to be withdrawn in July 2021 has been extended and the revised withdrawal date is now Jan 2022. Therefore, if you are interested in this scheme and have not already made your application then you need to start the process as soon as possible.

2. Non-Habitual Resident (NHR)

The NHR is a tax incentive scheme to attract people to Portugal, as the country otherwise doesn’t have attractive tax rates. It’s open to all new residents to Portugal, from both outside and inside the EU. Many people are able to avoid paying tax completely, while others are able to reduce their tax bill considerably. 

As of 2020, pensioners pay 10% tax on their pensions which could be attractive for those with large pensions. Whether or not it’s the right solution for you will depend on many factors including: 

  • where your income is coming from
  • where you’re currently tax resident
  • how it’s paid to you (e.g., dividends, royalties, etc.).

Generally, though, it’s seen as a very attractive reason to move to Portugal but it is recommended that you seek expert advice before making a final decision.

3. D7 Visa & Residency

The D7 or passive-income visa is a special residency scheme for Non-EU/EEA/Swiss citizens that have some form of income and are capable of supporting themselves. This could be income from almost anything, including: a pension, self-employment, stocks and shares, dividends, royalties, income from rental properties, income from a business they own, social security income, remote work, or freelancing. Despite the name, the income can be either actively or passively earned.

Officially, your regular income needs to at least equal the Portuguese minimum wage of €635/month, but in practice, the minimum seems to be closer to €1,000/month. In any case, it would be very difficult to live somewhere like Lisbon or Porto on €635, especially as you’ll also have other costs besides rent and food to factor in, including health insurance and social security.

Naturally, given that pensioners are a big focus of this visa, there’s no age limit or health requirements.

So, which is the best scheme for you?

Here are some points worth considering:

D7 Visa vs D7 Residence Permit

The phrases D7 Visa and D7 residence permit are often used interchangeably, however, they are actually 2 different steps in a process:

  1. D7 Visa (aka Portugal Schengen Residence Visa): gives you a 120-day period in which you can move to Portugal, rent or buy a place, get settled, and apply for the D7 residence permit. You apply for the D7 Visa at the Portuguese consulate in the country where you are already resident.
  2. D7 Residence Permit: allows you to live in Portugal for a specified period of time (temporary residency). Normally, the first permit is for 1 year and the following 2 renewals are for 2-year periods. After 5 years of living in Portugal, you would be eligible to apply for permanent residency and also, should you wish, Portuguese citizenship. You apply for the D7 residency permit in Portugal.

What you can and can’t do on a D7

Can do’s:

  • You can live in Portugal
  • You can travel within the EU
  • You can work freelance or remotely for companies in other EU countries
  • You will have access to healthcare, education, and other services available to Portuguese people
  • After you have residency, you can apply for a job in Portugal
  • You can normally leave the Schengen area on your visa (but there will be a specified limit on the number of times you can leave)
  • You don’t have to leave Schengen every 90 days

Can’t do’s:

  • You can’t move to another EU country
  • You can’t spend more than the maximum number of days outside of Portugal

D7 Eligibility

  • EU, EEA, or Swiss residents (as they already have an automatic right to residency in Portugal)
  • Those with certain criminal convictions (normally those that carry a jail sentence in Portugal)
  • Those who do not have a means of supporting themselves

The D7 Process

Most people coming to Portugal on the D7 Visa do so because of some or all of the following:

  • they want to live in Portugal
  • they want the freedom to travel within the EU
  • they want to apply for permanent residency or Portuguese citizenship after five years

The whole 5-7 process looks like this:

D7 Visa  >  D7 Residency  >  1st renewal  >  2nd renewal  >  Permanent Residency  >  Citizenship

Requirements for the D7 Visa Application

This process normally takes 3-6 months, and can involve quite a bit of paperwork. You apply at your nearest Portuguese consulate in the country where you’re resident.

It may take weeks/months to get an appointment at the consulate, so be sure to start early. To find your closest consulate, you can use this list of all the Portuguese consulates.

What you’ll need:

  1. Application form
  2. Passport (valid for at least 6 months after your D7 Visa would end)
  3. 2x passport-sized photographs
  4. A Portuguese bank account
  5. Motivation letter/personal statement explaining why you’re seeking Portuguese residency
  6. Proof of regular income (whether active or passive income)
  7. Proof of a place to live (either bought, rented, or staying with friends)
  8. Background check
  9. Health insurance (at least €30,000 coverage)
  10. 6 months of bank statements
  11. Savings (not essential if you have other income, but it helps)
  12. Proof of income

You will need to prove that you have sufficient income coming into your bank account (or already in it) and that you will continue to receive this income for the duration of the residency permit. Bank statements showing income from a pension or rental income would be an example of this.

In Portugal, the more paperwork, the better, so gather in advance as many relevant documents as you can.

Showing that you have enough savings to support yourself should your other income dry up can help. Sufficient savings in this case would mean at least the minimum monthly salary multiplied by the number of months that the visa would be valid for.

Proof of a place to live

Yes, you apply for your D7 Visa in your home country but the application requires you to have rented or bought a place in Portugal. It’s frustrating, but this is the reality, and there are 2 ways to get it done:

  • use a relocation firm to open your bank account, get you a NIF, and rent a property, through the power of attorney, OR
  • come to Portugal and organise these things yourself

Most people will need a formal rental agreement or lease, as Airbnb and hotels are rarely accepted anymore. 

However, if you have friends or family who are resident in Portugal you can get them to write an invitation letter which says that you’re welcome to live with them while you find another place to live.

Background Check

The D7 visa is open to those that don’t have criminal convictions that would carry a jail term in Portugal (although exceptions may be made).

You will need a background check from any of the countries you lived in to prove you don’t have any convictions. Background checks in some countries, including the US, can take several months, however, it is possible to pay an additional fee to expedite it.

Health Insurance

While on the D7 Visa, you’ll need health insurance while you’re in Portugal. You normally don’t need it once you move onto the D7 Residence Permit, but may be asked to keep up a health insurance plan for a period of time after (say 1 year). 

Once you have your residence permit and NIF, you may decide to apply for health insurance with a Portuguese company as it may be cheaper. Banks in Portugal, for example, offer health insurance as a product and offer reduced rates for current customers.

Do It Yourself or Hire a Professional?

Although there is a lot of useful information on the internet about applying for a D7 Visa and Residency Permit, it may be a lot easier to hire an expert to do it. Portugal is an extremely bureaucratic country and the system has a lot of grey areas. Someone who manages this service for multiple clients, and has experience with these grey areas, will have a much better chance of getting your application through the system. They’ll also speak Portuguese, which definitely helps.

Costs vary from company to company, but expect to pay somewhere between €1,000 and €3,000, depending on the company and whether you already have certain requirements (like the NIF or a Portuguese bank account). If you have a partner or children, they will incur costs as well, but the costs will be lower than the first applicant. The choice is yours!

Combining NHR with the D7

It’s possible to apply for both the NHR (Non-Habitual Residency) and the D7, and there are often tax advantages that come with this. NHR is a tax incentive, which, in certain instances, means you won’t have to pay tax (or will only have to pay a reduced amount of tax) on certain types of non-Portuguese income for a period of 10 years.

While the NHR scheme is quite varied, the two groups of people who are typically most interested in the NHR scheme are:

  • Pensioners.
  • Those who earn an income in countries outside of Portugal.

As of March 2020, pensioners on the NHR tax scheme are now taxed at a rate of 10%.

Those who earn an income outside of Portugal may be able to avoid paying tax on that income depending on how it’s paid to you.

Family Members

Family members, such as your partner and children, don’t need to meet the €1,000 per month requirement.

  • Spouse – 50% of the requirement for the first applicant
  • Each child – 30% of the requirement of the first applicant.

Family members of the main D7 application are entitled to a residence permit, based on family reunification law.

The D7 vs the Golden Visa

The D7 and the Golden Visa both allow you to live in Portugal, but which one is better? 

The main advantage of the D7 is cost.

The D7 has no investment fee attached whereas the Golden Visa requires you to invest in Portugal, most commonly by purchasing a house, and there are an additional €5,000 in government fees as well. If you hire a specialist company to help with the process, this will add additional costs again.

The main advantage of the Golden Visa is flexibility.

Portugal’s Golden Visa scheme only requires you to spend an average of 7 days in Portugal per year. It also grants you a 5-year residency permit rather than having to first apply for a visa.

Sources:, Portugal News etc

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