Brexit has happened and the repercussions are beginning to be felt in all manner of situations. British Citizens who are non resident in Portugal but who have assets here now need to appoint a fiscal representative, which can be Sovereign and for those wishing to apply for residency in Portugal this must be through a visa application. Equally if you do not have residency in Portugal and you live outside of the EU, you are now limited to staying in Portugal for up to 90 days in any 180 days.
EU nationals can simply pop into their local town hall, with minimum documentation, to prove they ‘live’ in Portugal and are subsequently issued with a CRUE certificate giving them five years licence to live here.
British nationals can no longer do this. It should be noted that many British people obtained these certificates prior to the 31st December wrongly believing that it is a residency certificate for temporary residence so that they could spend their winters in Portugal. This is incorrect. These certificates are for permanent residency and by applying for one you are stating that you live in Portugal as your permanent residence. They are temporary certificates only in that they are for five years residency after which you get your ten-year residency card.
These certificates must be communicated to the tax department within 60 days in order to update your status and complete your tax residency to Portugal.
Sovereign can assist you with this registration and subsequently support you with your fiscal obligations in Portugal. All residents of Portugal must declare here their worldwide income via a yearly tax return.
Now with the UK being outside of the EU, British nationals must apply for residency like all other non-EU nationals, via a Visa application.
Sovereign will guide and assist clients throughout their residency applications and has concierge services for both Golden Visa and D7 Visa applicants.
The well-known Golden Visa has been attracting people to Portugal since 2015 and is popular with individuals looking to obtain a Schengen passport more than those looking to obtain residence. However, for individuals wishing to reside in Portugal the benefits of the lesser known D7 Visa allows individual’s entry into Portugal with a view to applying for residency here.
The D7 Visa
The D7 visa is applied for at the Portuguese consulate in your home country and it will give you two entries into Portugal allowing you to stay for four months. This is to give you time to apply for your permanent residency card.
This visa is also known as the passive income visa as it is aimed at individuals with a passive income from investments, dividends, pensions, rental income or for the self-employed living off their own income.
You need to prove you can support yourself in Portugal by showing documented evidence of a minimum passive monthly income which must be equal to the Portuguese minimum wage of 665€. For additional adult family members, it is 332.50€ (50%) and for children under 18 it is 199.50€ (30%) each.
When you apply for the visa you must already have accommodation in Portugal either rented, loaned or purchased and already have a Portuguese bank account. For these you will need to have a Portuguese fiscal number which Sovereign can obtain for you.
Once you are in Portugal, you apply for the residency permit from SEF – Portuguese Immigration and Border Service.
Sovereign will guide you through the application process and the documentation required, book your appointment and if necessary, attend the SEF office with you.
If all is in order, SEF will issue you with a residency permit which is renewed after one year, then two years before permanent residency is given after five years. Sovereign will also assist you with the renewal applications.
With the D7 you must spend a minimum of six consecutive months or eight nonconsecutive months in Portugal per year.
Like the Golden Visa, the D7 allows for family reunification giving certain family members the right to residency in Portugal too. All of you will have access to Portugal’s national healthcare and education service and can work here.
You must be a tax resident in Portugal in order to live here and you must therefore declare in Portugal your
worldwide income via a yearly tax return. It is therefore beneficial to also apply for the NHR status which gives tax exemptions on most foreign income and reductions on Portuguese income taxes for certain professions. Sovereign will apply for your NHR status once your residency application is completed.
Sovereign’s team of accountants will continue to assist you as a resident of Portugal by preparing and submit your yearly tax returns.
The Golden Visa
For individuals looking to invest in Portugal but who do not wish to take up residency, the Golden Visa is the best option.
Portugal’s Golden Visa Program is a residency by investment program with several investment options which include, the establishing of a business in Portugal which provides employment opportunities, the purchase of real estate, investing in funds or in art.
With the Golden Visa the minimum stay in Portugal is seven days a year which will grant you permission to apply for permanent residency and citizenship after five years. This visa also grants the right to work in Portugal and provides a visa-free travel within the Schengen area.
As for the D7, Sovereign has a concierge service for Golden Visa applications and our personnel can guide and assist you throughout the application process and subsequent renewals.
Renting out your Portuguese Property
Many Golden visa investors in real estate opt to rent out their Portuguese Properties whether for long or short-term lettings.
Sovereign provides full accountancy support to clients who have rental income derived in Portugal. Their team of fully qualified team of accountants will issue the necessary rental receipts and prepare and submit the yearly tax returns to the Portuguese tax department. All rental income from Portuguese properties must be declared in Portugal and Sovereign will ensure you are compliant.
Before anyone takes up residency in Portugal it is advisable to ensure that they have their current assets and income, outside of Portugal, structured to ensure tax efficiency under the residency programme.
Sovereign provides cross border planning consultations for individuals looking to establish residency in Portugal and for Non-Habitual Residency (NHR) applications and can provide a simulation which will consider your worldwide income and indicate your likely tax situation as a resident of Portugal.
Contact Sovereign today for more information by telephone 00351 932155491 or by email below.
