If you are one of those thinking about a move to Portugal, there are many financial considerations that you need to be aware of before you make the decision to relocate.
Do your research thoroughly
If possible, visit your chosen area in Portugal before your move. Find out about what day to day life is like by talking to other expats who have already relocated, ask whether they have any regrets about moving and the monthly income requirements to live comfortably.
You can connect to all the expat communities via Facebook to find out how life might change and perhaps even make some new friends before you have moved.
It is also prudent to source local recommendations for real estate agents, relocation companies and solicitors to help your move go smoothly.
Citizenship/Visa options (if not EU citizen)
There are two popular Visa options in Portugal, and it’s important that you understand the implications of each before you relocate.
The Golden Residence Permit Programme (Golden Visa) gives you the ability to travel freely between Schengen countries, however, if you want to qualify as a Portuguese tax resident you will be required to spend a minimum of 183 days per year in Portugal. The Portuguese Government grants this visa when a foreign national makes a substantial investment in the country’s economy. The most common investment is in the form of a property, and this starts at a minimum of 350,000€
The D7 visa is also known as a Type I Visa or Passive Income visa. If you have regular, sustainable income from financial investments or intellectual property that you can use to fund your lifestyle, you may be eligible for this type of visa.
Startup visa or a Work visa.
It is vital to ensure that you source high quality financial planning advice from a wealth management specialist before moving from South Africa to Portugal, because some of the investments that are tax-efficient in your country of residence could have increased tax liabilities in Portugal.
An experienced local financial adviser with the expertise and know-how of all the local tax implications and legislation will be able to review your assets and investments to ensure that you have a clear understanding of the financial implications of a relocation to Portugal. By carefully planning and restructuring your investments before you move, you may benefit from substantial tax savings. You should source a financial adviser in Portugal before your move.
Tax incentives for moving
The Portuguese Government runs the Non-Habitual Residence (NHR) tax programme which aims to attract new residents to Portugal. The programme offers tax relief on some foreign income sources. For example, you may:
- Receive your pension paying only 10% tax
- Be exempt from tax on earnings from dividends and royalties
- Be entitled to the 20% flat rate on certain foreign source incomes
To register for and maintain the NHR scheme, you must apply to the Portuguese Tax authority (Finanças) by 31 March of each year with proof of your address in Portugal as of 31 December and you cannot have been a tax resident in the previous 5 years.
Using a specialist relocation company to manage your move can reduce the stress for you. Services offered may include setting up a bank account, obtaining a tax number, along with completing and submitting all the residency paperwork.
Advice from Blacktower Financial Management
Relocating is a significant decision; you need to feel confident that you have identified and mitigated any issues that might arise from moving to another country. Blacktower Financial Management Group has long-standing expertise to ensure you optimise your expat and Portuguese tax resident status, not only in Portugal but also back in your country of origin. Contact one of the representatives in our Algarve office today for your free, no-obligation discussion.
Blacktower in Portugal
Blacktower’s offices in Portugal can help you manage your wealth to your best advantage. For more information contact your local office.
Blacktower has been providing expert, localised, wealth management advice in Portugal for the last 20 years. We can help with specialist, independent advice on securing your financial future. Get in touch with us on (+351) 289 355 685 or email us at firstname.lastname@example.org.