Get to know the authorIf you’re interested in growing your wealth while living in a safe, beautiful, and affordable country, it’s well worth considering Portugal’s golden visa. In exchange for investment funds of at least €250,000, you and your family can work, live, and study in Portugal for up to two years.
And as long as you stay in Portugal for at least two weeks out of the year, you can later renew your visa and apply for permanent residency. If you meet the naturalization requirements, you can even apply for Portuguese citizenship.
Want to learn more about Portugal’s popular golden visa program? Read on to learn what the golden visa is, the benefits it offers, how to apply for one, and more.
What is a golden visa in Portugal?
Portugal’s golden visa — officially called the Autorização de Residência para Actividade de Investimento, or Residency Authorization for Investment Activity — first launched in 2012.
The first visa of its kind in Europe, Portugal originally launched its golden visa in response to the 2008 global financial crisis. The program aimed to attract investors who could bolster Portugal’s hard-hit economy in exchange for a residency permit. Between its inception and 2023, Portugal’s golden visa attracted nearly 13,000 investors.
Does Portugal still have a golden visa?
In late 2023, Portugal’s golden visa saw significant reform.
Several investment options that previously qualified investors for the visa — purchasing real estate, making capital transfers, and investing in real estate funds — were removed. These changes were made as part of the Mais Habitação (More Housing) Law, a legislative package designed to help alleviate the scarcity in affordable housing for locals.
The disqualification of these investment options led many to wonder: Is Portugal’s golden visa ending? However, as of 2024, Portugal’s golden visa remains active, with multiple qualifying investment routes.
Benefits of Portugal’s golden visa for US Expats
Some of the many benefits that Portugal’s golden visa offers US expats include:
- Weather: Portugal has a Mediterranean climate with mild winters and hot summers. While temperatures can get high in the summer, the country boasts 586 miles of coastline full of beaches perfect for cooling off
- Cost of living: Life in Portugal is generally much more affordable than most of the US. By some estimates, the cost of living in Portugal is about 37.4% lower than that of the US
- Safety: Portugal is one of the safest countries not only in Europe, but also the world. The 2024 Global Peace Index ranked Portugal at number 7 in its list of safest countries
- Family reunification: Portugal’s golden visa allows you to bring your spouse and eligible dependents. What’s more, it authorizes your entire family to work, live, and study in Portugal
- Large expat community: Some 7,000 Americans currently call Portugal home, with well-established expat enclaves in Lisbon, Porto, Madeira, and the Algarve
- Rich culture: From stunning Manueline architecture to delicious dishes like caldo verde (a hearty cabbage stew) and pasteis de nata (custard tarts), lively fado music, homegrown wines like Porto and Alvarinho, fandango dancing, and intricate tile artwork, Portugal has no shortage of cultural offerings
- Healthcare: Portugal’s public healthcare system boasts high quality and low prices, with many affordable private plans available as well
- Tax incentives: Portugal’s non-habitual residence (NHR) scheme offers tax breaks for newcomers to the country
- Citizenship: Portugal’s golden visa scheme offers a direct pathway to citizenship in Portugal, which allows you to permanently live, work, and study not only in Portugal but all of the European Union
- Low residency requirement: Holders of Portugal’s golden visa need only stay in the country for seven to 14 days per year (depending on the year) to maintain and renew their visa as well as apply for permanent residence
Requirements for the Portugal golden visa
Eligibility criteria & duration
To be eligible to apply for Portugal’s golden visa, you must:
- Be a non-EU citizen
- Have a clean criminal record
- Be at least 18 years old or above
- Make a qualifying investment (more on that below)
Once granted, the visa lasts for two years. You can renew it twice more for two years each. After five years total, you can apply for Portuguese permanent residence or citizenship.
Investment options & minimum investment thresholds
While Portugal has gotten rid of a few previously qualifying investment pathways, they still offer several different options:
- Create at least 10 permanent jobs
- Contribute at least €500,000 to a scientific research institution
- Contribute at least €250,000 to an approved arts or cultural heritage project
- Invest at least €500,000 in a Portuguese venture capital fund
- Invest at least €500,000 in a Portuguese business that will create at least five permanent jobs
- Note: You can invest in an existing Portuguese business or start your own
Application process for the Portugal golden visa
Documentation required
The documents you will need to apply for Portugal’s golden visa include:
- A copy of your passport
- Proof of the qualifying investment
- A declaration from a Portuguese bank confirming the transfer of funds
- A criminal record from your country of residence, issued within three months of your application submission
- A form authorizing Portugal’s immigration authority to access your criminal records in Portugal
- A sworn declaration that your investment meets the minimum requirements and that you will maintain it for at least five years
- Documents showing good standing with the Portuguese Tax and Customs Authority and Social Security system, issued within 45 days of your application submission
- An application fee of €605.10
Step-by-step visa application process
To apply for Portugal’s golden visa, you must:
- Obtain a Portuguese tax identification number (NIF)
- Open a Portuguese bank account
- Make a qualifying investment
- Gather the required documents mentioned above
- Submit your application
- Attend a biometrics appointment to have your fingerprints taken (upon approval)
- Apply for a residence card and pay the associated fee of €6,045.20 per adult
All in all, the process usually takes about six to twelve months.
Note:
Due to the legal and administrative complexities of immigration, most applicants work with a law firm or lawyer.
Renewal & naturalization
After two years, you may renew your golden visa. This comes with an application fee of €605.10 (~$654.35), plus a renewal fee of €3,023.20 (~$3,269.24) per adult family member. You’ll also need to pay a residence card re-issuance fee of €3,023.20 (~$3,269.24) per adult family member.
After another two years, you can renew the visa for a second time. Again, you’ll need to pay the application fee (€605.10, or about $654.35) plus the renewal fee of €3,023.20 (~$3,269.24) per adult family member. You’ll also need to pay a residence card re-issuance fee of €6,045.20 (~$6,537.40) per adult.
After five years total, you can apply for permanent residence for a fee of €8,463.40 (~$9,152.49) per adult. Any subsequent permanent residence renewals will cost €4,232.30 (~$4,576.89) per adult.
If you have met the naturalization requirements in those five years, you can apply for Portuguese citizenship for a fee of just €250 (~$270.36). You must also pass a Portuguese language test demonstrating at least an A2 level.
Note:
Immigration fees for minors usually cost half of what adult fees do.
Tax Implications of the Portugal golden visa for US expats
Portuguese taxes
Portuguese defines tax residents as those who:
- Spend over 183 days (consecutive or not) within a 12-month period overlapping the tax year, OR
- Maintain a habitual residence in Portugal at any point within a 12-month period overlapping the tax year
Tax residents who must file a tax return are subject to Portuguese taxes on their worldwide income. Non-tax residents only file a tax return and pay Portuguese taxes if they have Portuguese-source income. Foreign-source income, however, is tax-free.
Income tax rates for tax residents in Portugal range from 14.5% to 48%, depending on overall taxable income.
Non-tax residents, on the other hand, pay a flat rate of 25% on most Portuguese-source income. Portuguese-source income from interest and dividends, however, is subject to a 28% withholding tax.
Other taxes in Portugal include:
- Capital gains taxes: Typically 28%; reduced rates on the sale of certain assets
- Payroll tax: 26.5%
- VAT: Typically 23%; reduced rates on certain items
Non-Habitual Resident (NHR) program
For years, Portugal offered a Non-Habitual Resident (NHR) tax regime that gave significant tax breaks to new Portuguese tax residents for up to 10 years. This included no taxes on foreign income, a 20% tax on Portuguese-source income, a 10% tax on pension income, and no taxes on capital gains.
In 2023, the Portuguese government announced they would prohibit new applicants from applying to the regime. However, they ended up announcing a modified program, now called NHR 2.0. NHR 2.0 is geared toward new Portuguese tax residents who work in research and development, for startup organizations, or in otherwise innovative fields.
Benefits of NHR 2.0 include:
- A 20% flat tax on Portuguese-source employment or self-employment income
- A tax exemption on foreign-source passive income
US taxes
All US citizens and residents who earn above a certain threshold are subject to US taxes, even if they live abroad. As a result, the vast majority of Americans living in Portugal must file (and potentially pay) federal US taxes.
Taxes for US expats are due on June 15th, although you can request an extension until October 15th by filing Form 4868. You still need to make an estimated tax payment by April 15th, however.
B!T related: US Expat Taxes 2024: 12 Tips from the Best Expat Tax Service
If you’re also subject to taxation in Portugal, you could face double taxation. Thankfully, the US offers a couple of expat-specific tax breaks that greatly reduce the risk of this happening, including the:
- Foreign Tax Credit (FTC): Gives expats dollar-for-dollar US tax credits on any foreign taxes they’ve paid, providing they’re legal, paid, based on income, and made out to them specifically. In a high-tax country like Portugal, this can often not only erase your US tax liability, but give you surplus credits to use on future tax bills (up to 10 years)
- Foreign Earned Income Exclusion (FEIE): Allows expats to exclude up to $126,500 (tax year 2024) or $130,000 (tax year 2025) of foreign-earned income from taxation. To qualify, you must pass either the Physical Presence Test or Bona Fide Residence Test
- Note: Passing either of these tests also allows you to qualify for the Foreign Housing Exclusion, which helps you offset foreign housing costs
Note:
While Portugal has a tax treaty with the US, a tricky saving clause negates most of its benefits. Americans in Portugal are typically better off claiming US expat tax breaks.
In addition, expats can claim most of the same tax breaks as they would in the states, such as the Child Tax Credit (CTC).
Given the substantial foreign financial holdings the Portuguese golden visa requires, you will likely have to file the following reports:
- Foreign Bank Account Report (FBAR): Mandatory for expats with over $10,000 cumulatively across foreign financial accounts
- Statement of Specified Foreign Assets (Form 8938): Mandatory for expats whose foreign financial holdings exceed $200,000 on the last day of — or $300,000 at any point during — the tax year
Optimize your expat strategy as a golden visa holder
Portugal’s golden visa is a great opportunity for those who are hoping to live and invest abroad. While there aren’t as many routes for the golden visa as before, there are still five ways to make a qualifying investment. Although the application process requires time and patience, Portugal offers a high quality of life for its residents.
Resources:
- How the Golden Visa program helped Portugal recover from the financial crisis
- Portugal Golden Visa Statistics 2024
- Cost of Living Comparison Between United States and Portugal
- Global Peace Index 2024
- Portugal Golden Visa: The Definitive Guide 2024
- Portugal Golden Visa Residence Program
- ARI – Autorização de Residência para Atividade de Investimento
- NHR 2.0: Portugal’s New NHR Tax Regime 2024
