Category: Dixcart Domiciles

Background to the “60 Day” Tax Residency Rule

In July 2017, the Cyprus Parliament voted for an amendment to the then criteria used to determine Cyprus tax residency. In addition to the 183 day rule, a second test was introduced in relation to an individual’s tax position in Cyprus: the 60 Day Tax Residency Rule.

• The “183 day rule” applies to individuals who have physically resided in Cyprus for more than 183 days during one calendar year.
• In addition to this, a second test was implemented whereby an individual can become Cyprus tax resident in 60 days. This rule is applicable to individuals who do not spend more than 183 days in Cyprus or in any other jurisdiction.

Since the implementation of the 60 day tax rule, a number of individuals have relocated to Cyprus to take advantage of the various tax benefits that are available.

Criteria to be Met for an Individual to Meet the “60 Day” Residency Rule

The “60 day rule” applies to individuals who in the relevant tax year:

• reside in Cyprus for at least 60 days;
• operate/run a business in Cyprus and/or are employed in Cyprus and/or are a director of a company which is tax resident in Cyprus. Individuals must also have a residential property in Cyprus which they own or rent;
• are not tax resident in any other country;
• do not reside in any other single country for a period exceeding 183 days in aggregate.

Overview – Cyprus

Cyprus has positioned itself well, as a country of choice for both individuals and corporations, through the availability of various tax incentives and benefits. The numerous tax incentives offered has seen a steady flow of EU and non-EU nationals establishing their business operations in Cyprus. In addition, individuals find Cyprus a tax efficient location to structure their personal tax positions, by taking advantage of flexible tax resident rules and the non-domicile tax regime.

As an EU member state, Cyprus offers a pleasant climate, adequate infrastructure, and a convenient geographical location. There are two main airports which provide frequent flights to most European cities, as well as several international destinations.

Days Spent In and Out of Cyprus

For the purpose of the rule, days “in” and “out” of Cyprus are defined as:

• the day of departure from Cyprus counts as a day out of Cyprus;
• the day of arrival in Cyprus counts as a day in Cyprus;
• arrival in Cyprus and departure on the same day counts as a day in Cyprus;
• departure from Cyprus followed by a return on the same day counts as a day out of Cyprus.

What are the Advantages of Being a Cyprus Tax Resident?

Non-Domicile Status

The non-domicile tax regime is particularly interesting for individuals whose main source of income is either dividend or interest income, as these sources of income will not be taxable in Cyprus. In addition, individuals can take advantage of the exemption from taxation of capital gains (other than on the sale of immoveable property in Cyprus).

Employment Income Exemption

On 26 July 2022, the long-anticipated enhancement of this tax incentive for individuals took place.

• The new provisions allow for a 50% exemption from taxation, for income in relation to first time employment in Cyprus, for individuals with annual remuneration over 55,000. The previous remuneration threshold had been €100,000.

This exemption is available for a period of 17 years.

Exemptions on Income from Employment Outside Cyprus

Individuals who are employed outside of Cyprus for more than 90 days aggregate in a tax year, by a non-Cyprus tax resident employer or foreign permanent establishment of a Cyprus tax resident employer, are exempt from income tax on this income.

Additional Information

For additional information about the attractive 60 Day Tax Residency Rule for individuals moving to Cyprus, please contact Robert Homem: advice.cyprus@dixcart.com.

News was announced in November 2022, when the Portuguese Prime Minister Antonio Costa indicated that the Portuguese golden visa is “no longer justified” – hinting at the prospect that the end of the famous residency-by-investment programme may be in sight.

History

The Portuguese golden visa programme was introduced in Portugal in 2012, to attract much needed foreign investment into the country. It came at a time when government effort was needed to fix Portugal’s public finances, following the 2011 bailout from the European Union.

So far it has been one of the world’s most popular residency-by-investment programmes, raising €6.6 billion from over 20,000 individuals (according to the Portuguese Immigration and Border Services), with a spectrum of benefits, including  the right to live, work and study in Portugal and visa-free travel within the Schengen Area for a period of five years.

The biggest investors have been from China, however, it is expected that Americans are poised to surpass them in 2022, for the first time.

Emotional Reaction

The potential change is prompting an emotional reaction from many, who are considering investing into the programme and  who are keen to ensure that their ‘plan B’ residency option is in place, before the expiry of the Portuguese golden visa.

Likely to be Advanced Warning of a Timeframe

It is important to note, though, as we have seen in the past, that changes made in the Portuguese golden visa programme typically have a timeframe applied during which the opportunity to apply for the programme will continue. Currently there is no confirmation in terms of when we may expect to see the end of the Portuguese golden visa, however, it is very likely that the timeline is finite and will come to an end sometime in the future.

Political Commentary

The likelihood of an advanced warning is supported by the fact that, earlier this year, there was a proposal to end the golden visa programme which was rejected. More recently, on 22 November 2022 the socialist party, which forms the current majority government in office, rejected the communist party’s proposal to introduce the end of the golden visa in the state budget for 2023.

This is despite the fact that, as mentioned earlier by the Prime Minister, the Government is evaluating the possibility of ending the regime. It is important to note, however, that a working group has been appointed to analyse the impact of the programme in the country and that this is a topic with a moving target and susceptible to change in the future.

What Action Should be Taken?

Investors who wish to enter the visa programme should do so sooner rather than later, to avoid the rush that was seen at the end of 2021, when the golden visa investment thresholds increased, with some losing out on being able to enjoy the lower investment rate, due to the influx of applications seen at the eleventh hour.

For those who have already invested in the Portuguese golden visa programme, the benefits of having the visa will remain and the commitment to those who have gained a visa, before the end of the visa programme, will be honoured.

Benefits Available Through the Golden Visa Programme

Benefits for those whose applications have been accepted, include the following:

• Visa-free travel in Europe’s Schengen Area and the right to live, work, and study in Portugal
• Eligibility to apply for citizenship after five years as a legal resident while keeping other citizenship(s)
• Low physical presence requirement: 7 days during the first year of residence and 14 days for the two subsequent years, which can count towards citizenship eligibility after five years
• Excellent international and Portuguese schools and universities
• High quality of life, local cuisine and wines, rich culture, mild climate, and a high level of security
• International quality healthcare clinics and hospitals
• A country where people actually want to live and bring up their families, compared to some other jurisdictions who are offering other types of CBI programs
• Only 7 days on average per annum stay in Portugal is required, over the five year golden visa period

Additional Information

If you have any further questions regarding the golden visa programme, including the investment options available, please reach out to Dixcart Portugal, for more details: advice.portugal@dixcart.com

Having an experienced team to assist is paramount to ensure a steady and efficient process.

A golden visa application typically involves more than just the actual visa submission, and depending on the investment option selected, may require an experienced team of professionals such as Dixcart to assist you with various matters relating to the application.

Background

The new visa for digital nomads became available on October 30^th 2022, allowing any remote worker or self-employed individual to pursue their profession through Portugal, enjoying all of the quality of life that Portugal has to offer.

Overview

With the last amendment of the relevant law, the Portuguese Government implemented the digital nomad visa, specifically allowing foreign professionals to provide their services remotely, either as a subordinate worker or as an independent worker from Portugal, and to apply for residency in Portugal. 

Step 1: Hire a Legal Adviser

As the digital nomad visa is very recent, it requires an expert, such as Dixcart, with sufficient experience and knowledge of Portuguese immigration law, to take you smoothly through the process. Things to consider when hiring a legal adviser are experience in the market, specifically in this area, and the track history of the firm.

Once a legal adviser is appointed, they will assist you with the documents that you need to collect to apply for the visa and schedule the relevant appointment at the Portuguese Consulate, for the area where you reside, helping you through every step of the process.

Step 2: Portuguese Tax number and Opening a Portuguese Bank Account

To apply for the visa, you will need to prove that you have sufficient means of subsistence in Portugal for the period of your stay (a minimum of one year). This means that a Portuguese bank account, and consequently a Portuguese tax number, are required.

A deposit of the minimum monthly Portuguese salary of €760, multiplied by twelve (the minimum stay period) is mandatory, to present to the Portuguese Immigration Authorities.

Step 3: Collect Documentation

You will need to assemble a number of documents for the appointment at the Portuguese Consulate:

General documentation required to request a visa:

1. Proof of legal residency in the country from where you are applying
2. Travel insurance covering necessary medical expenses, valid for 12 months
3. Criminal record
4. Proof of accommodation in Portugal for, at least, 12 months
5. Proof of means of subsistence in Portugal

Specific documentation for the digital nomad visa

• Working for an employer – one of the following documents:
  • Work contract; or,
  • Promise of work contract; or,
  • Declaration by employer confirming the labour link.
• Independent professional activity – one of the following documents:
  • Contract of company incorporation; or,
  • Contract of service provision; or,
  • Written proposal of services provision contract; or, 
  • Document attesting the services provided to one or more entities.
• Proof of average monthly income for the last three months with a minimum value equivalent to four times the Portuguese minimum wage: €3,040.
• A document confirming tax residence.

Step 3: Legal Formalities

Make an appointment at the Portuguese Consulate, where a meeting must take place to deliver the documentation and for biometrics for the visa to be taken.

Step 4: Final Steps

After analysis of the application is complete, the digital nomad visa is issued for a period of four months and allows two legal entries in Portugal. When in Portugal, an appointment needs to be made with the Portuguese Immigration Authorities to complete the process. Once the digital nomad visa for residency is issued, it will be valid for two years and there is an option to then renew it.

Advantages

Work remotely and legally from Portugal Mainland or either of the Islands of Madeira or the Azores, and enjoying the amazing weather and food.

In Madeira, the “Digital Nomads Madeira” has already been created, which is a village for digital nomads, where they can enjoy workspaces, places of activity and community, with updated technology.

In addition, following on from this residency visa and subsequent residency permit, you can apply for citizenship or permanent residency after five years, and you can also apply for the non-habitual tax regime that gives a number of income tax advantages.

Additional Information

If you require any additional information regarding the Digital Nomad visa, the processes involved and the advantages it offers, please contact the Dixcart office in Portugal: advice.portugal@dixcart.com

We will be delighted to help you.

The Portuguese Government announced the introduction of a new visa for digital nomads, which came into force on the 30^th October 2022, allowing remote workers and/or self-employees to pursue their profession in Portugal.

Portugal is one of the oldest countries in Europe with striking historical and cultural attractions, an idyllic climate, superb cuisine, a low cost of living, low taxes and is regarded as one of the safest countries in the word to live and work. Portugal is destined to become a new oasis for digital nomads.

Overview

In October 2022, the Portuguese Government implemented, article 61.ºB, the Digital Nomad Visa which allows, foreign professionals to provide their services remotely, either as a subordinate worker (employee), or as an independent worker, in Portugal, for the maximum period of one year.

Each individual needs to provide; a work contract from a company based outside of Portugal, or a company incorporation contract, or proof of being self-employed and a commitment to register as an independent worker. 

The most important requirement to obtain the Portuguese Digital Nomad visa is the salary. Each applicant needs to demonstrate that they earn the equivalent of four times Portugal’s minimum monthly wage, which is €705, therefore making the monthly income required a total of €2,820. Portugal’s minimum monthly wage is expected to increase to €760 euros in 2023.

Individuals also need to be a citizen of a non-European country, in order to apply for the Digital Nomad Visa.

What is the difference between a D7 Visa and the Digital Nomad Visa?

The Digital Nomad Visa is an alternative to the D7 Visa. In order to apply for the D7 Visa, revenue must come from passive income, such as real estate investment or a pension.

To obtain the Digital Nomad Visa, passive income is not required – the salary is the important factor, as detailed above.

Step 1: Portuguese Tax Number and Opening a Portuguese Bank Account

To apply for the visa, individuals need to prove that they have sufficient means of subsistence in Portugal for the period of their stay. That means a Portuguese bank account, and consequently a Portuguese tax number, are both required.

A deposit of the minimum wage, multiplied by the number of months the individual is staying in Portugal, is then mandatory as evidence to the Portuguese Immigration Authorities.

Step 2: Collect Documentation

Gather all of the documents necessary to be submitted at the appointment at the Portuguese Consulate:

General documentation to request a visa

1. Proof of legal residency on the country where you are applying
2. Travel insurance covering necessary medical expenses
3. Return airline ticket
4. Criminal clearance record
5. Proof of accommodation in Portugal for the period of your stay
6. Proof of means of subsistence in Portugal

Specific documentation for the Digital Nomad Visa

• In the situation of subordinate work, i.e., as an employee, one of the following documents is required:
  • Work contract; or,
  • Promise of work contract; or,
  • Declaration by employer confirming the labour link.
• In the situation of independent professional activity, one of the following documents is required:
  • Contract of incorporation of company; or,
  • Contract of provision of services; or,
  • Written proposal of provision of services contract; or, 
  • Document confirming the services to be provided to one or more entities.
• Proof of average monthly income for each of the last three months, with a minimum monthly value, equivalent to four Portuguese monthly minimum wages.
• Document confirming your tax residence.

Step 3: Legal Formalities

The next step is to make an appointment at the Portuguese Consulate, where a meeting will be organised to submit the documentation and collect biometric data for the Visa.

Step 4: Final Steps

After analysis of the application is complete, the Digital Nomad visa is issued for the period of the work contract, up to a maximum period of one year.

Advantages

Apart from tax benefits and other advantages, Portugal has 3 cities in the Nomad List of top 10 best cities in which to work remotely. 

Lisbon is rated as the best city, whilst the island of Madeira also rates highly. Important factors include internet speed and entertainment, specific communities with a social structure, co-workspaces, and medium-term accommodation, each of which are important to Digital Nomads.

Madeira established the first Digital Nomad Village in Ponta do Sol, where Digital Nomads enjoy free workspaces, with high-speed broadband internet, spectacular scenery, and a vast array of activities.

Why Should You Reach out To Dixcart?

Taken into account that the Digital Nomad Visa is a very recent option as a visa in Portugal, it requires guidance from experts with sufficient experience and knowledge of immigration law.

 Information is available on the internet that may assist you in obtaining the Digital Nomad Visa on your own, but this may come with many hurdles that our team are familiar with and that can easily be avoided with the help of a professional.

 In addition, Dixcart can provide tax planning, among other services, that can assist when relocating. Tax planning is considered necessary before your actual move to Portugal, as arriving unprepared may result in unfavourable tax consequences that could have easily been avoided.

Additional Information

Please reach out to Dixcart Portugal for additional information: advice.portugal@dixcart.com.

The Golden Visa Residence by Investment Programme was introduced in 2012 in Portugal, and is a five-year Residence Permit Programme, after the first residency card has been issued, for non-EU nationals. Portugal is a full member of the EU, and therefore successful applicants of the Golden Visa Residence by Investment Programme benefit from visa-free access to Europe’s Schengen Area.

The permit requires a low physical presence requirement with an average stay of just seven days a year, or fourteen days in a period of two years in Portugal, over the five-year period. Benefit of the programme include the right to live, work and study in Portugal, with the key benefit of obtaining citizenship at the end of the program and the entitlement to European citizenship.

Portugal has, in recent years, extended its excellent reputation, with many discovering this beautiful Mediterranean region in Europe.

It is considered one of the world’s most globalised and peaceful nations, with a high quality of life. It has been ranked highly on several index rankings (including that of education and living), and offers a warm climate, superb cuisine, and a relatively low cost of living.

Portugal is a place that families want to move to and where businesses can expand and grow, with the forecast Portuguese growth rate expected to exceed the European average.

Step 1: Hire a Legal Advisor

The Golden Visa programme is a relatively complex visa that requires an expert with sufficient experience and knowledge of the programme. Things to consider when selecting a legal advisor are experience in the market specifically in the Golden Visa programme, and the track history of the firm.

Once a legal advisor is appointed, they will assist you in hiring a tax representative, the opening of a Portuguese bank account, and will explore the different investment programs options available in Portugal with you.

Step 2: Choose an Investment Programme

The investment options available under the Golden Visa programme are a capital transfer, a property acquisition, or investment into a business.

• Capital Transfer

The options available in relation to a capital transfer are:

1. A capital transfer of €1.5 million into a Portuguese bank account or an approved investment
2. €500,000 for the acquisition of investment or venture capital fund units committed to the capitalisation of companies incorporated under Portuguese law, with a maturity of at least five years and with at least 60% of the investment portfolio in companies with a registered office in the national territory of Portugal
3. €500,000 for research activities of public or private entities that are part of the national scientific and technological system (€400,000 in a low population density area*)
4. €250,000 in support of artistic production or in the recovery or maintenance of national cultural heritage (€200,000 in a low population density area*)

Property Acquisition

The two options in terms of property acquisition are:

1. 350,000 minimum real estate purchase for the refurbishment of residential properties older than 30 years or in an area of urban regeneration, including the cost of renovations (residential property is limited to designated interior areas), (€280,000 in a low population density area*)

*A low population density area is defined as less than 100 inhabitants per km², or with a GDP per capita lower than 75% of the national average.

Business

The options for the establishment of a business are:

1. Creation of a minimum of ten new jobs (eight new jobs in a low population density area*)
2. €500,000 for the incorporation or increase of the share capital of a company that is registered in Portugal, creating, or maintaining a minimum of five permanent jobs for a period of three years

Step 3: Legal Formalities

The next step is preparing all of the necessary information to be submitted to SEF (Portuguese Border and Immigration Service). Some specific documents will be requested by your legal advisor, depending on the type of investment that is chosen, together with other documents, including criminal record details and tax number of the country of origin.

Step 4: Final Steps

Once all of the documents have been provided to your legal advisor, these are submitted to SEF for acceptance. Once accepted, you will be notified to schedule a biometric appointment at SEF, and after this procedure has been completed, will be followed by a residence card which represents the golden visa.

Renewals need to take place every two years, with documentation being updated and biometric appointments to take place in Portugal.

Requirements

The following criteria are applicable for the golden visa programme:

• Minimum average seven day spend in Portugal per year, over the five year period, after the concession and until the first renewal
• Minimum fourteen day spend in Portugal for the period of two years between renewals
• Maintain the investment for a five year period, after receipt of the residency card

Advantages

After the five year residency programme is completed, the investor can keep renewing the temporary residency card as long as wanted while keeping the investment, apply for permanent residency in Portugal where a five year residency card will be issued, or apply for Portuguese citizenship and get a Portuguese passport.

For the second two options, it is mandatory to pass a A.2 level Portuguese exam. 

Tax Consequences

The tax consequences for each investment option vary depending on the investment programme selected. Please refer to the following articles which include more details regarding the tax consequences that need to be considered:

• Golden Visa
• Property
• Companies

Additional Information

If you require additional information regarding the Golden Visa Programme, including the investment options available and the next steps to take, please contact Lionel de Freitas at the Dixcart office in Portugal: advice.portugal@dixcart.com 

Malta has introduced a New Start-up Residence Programme

At the 2-day “Start-In-Malta Festival” in October 2022, Malta Residence Agency announced a new residence programme: the Malta Start-Up Residence Programme.

• This new visa will allow non-European nationals to relocate and live in Malta, by establishing an innovative start-up.

The programme allows founders/co-founders to apply for a 3-year residency permit, together with their immediate family, and the company to apply for 4 additional permits for Key Employees.  

The Hon. Miriam Dalli (Minister for the Environment, Energy and Enterprise) stated “we want to be at the forefront of cutting edge technology innovation, research & development“.

Highlights of the new Start-Up Residence Visa

• Fast and efficient application process
• Founders/Co Founders receive a 3-year permit that can be potentially renewed for another 5 years (it is possible to include immediate family members in the application)
• Founders/Co Founders may apply for permanent residency after residing in Malta for 5 years
• The Start-up company can also apply for residence permits for up to 4 Key employees (of which they will need to satisfy the requirements of the KEI)
• Key Employees receive a 3-year residence permit that can be renewed for another 3 years (it is possible to include immediate family members in the application)
• Key Employees may apply for long term residency after completing 5 years in Malta

Salient Points:

• The Start-up Business Plan must be approved by Malta Enterprise
• Malta Enterprise will periodically review the start-up activities
• It is still possible to apply for all Malta Enterprise Support Measures, however the residence permit will only be approved once the funding is approved (if no funding is required, the Residence application process may be swift):
  • Funding Available for it and Fintech Business in Malta
  • Malta – The Package of Support Available for Research and Development Projects 

• It is expected that the successful applicants will reside in Malta and make Malta their permanent residence and therefore there is a minimum stay requirement of 183 days per year

Additional Information

For further information on the new Start-up Visa, please do not hesitate to contact Henno Kotze: advice.malta@dixcart.com at the Dixcart office, in Malta or your usual Dixcart contact.

Dixcart Management Malta Limited Licence Number: AKM-DIXC-23

What is the Key Employee Initiative?

The Key Employee Initiative (KEI) provides a fast-track work permit for highly specialised Third-Country Nationals (TCNs), who are employed in Malta.

The scheme enables work permits to be issued to key prospective employees, no longer than 5 working days from the date of application, under normal circumstances.

Third-Country Nationals

Third-Country Nationals require a single work permit to be able to obtain residence and be employed in Malta. This is because TCNs are not members of the EU or EFTA, and are therefore not able to move across borders, in the EU, without the proper documentation. 

However, TCNs who are high-skilled workers, are provided with a fast-track work permit service by the Key Employee Initiative. Under normal circumstances, the scheme will issue work permits in not more than 5 days, as detailed above. In contrast non highly specialised TCNs must wait for at least a couple of months.

Who is Defined as a Highly Skilled Worker?

Highly-skilled workers include individuals who possess advanced technical, academic and interpersonal skills. They usually flourish in the areas of; problem-solving, leadership, system improvement and creativity. Examples of highly-skilled workers include; university professors, engineers, biotech scientists, business directors, and IT experts. 

Criteria

Malta’s Key Employee Initiative (KEI), is available to highly technical or managerial professionals with the relevant qualifications and experience for the job they are applying for.

Eligible highly-skilled workers are required to meet the following requirements: 

• Have valid travel documents 
• Receive an annual gross salary of at least €30,000 
• Be in possession of certified copies of qualifications and necessary work experience 
• The employer must declare that the individual has the necessary credentials for the assigned role

Benefits:

The following benefits are available through Malta’s Key Employee Initiative:

• The KEI is a fast-track version of the standard single work permit application, with applications being approved in just 5 days.
• Applications can be submitted online, without the applicant needing to be present in Malta.
• Approved applicants are issued with a residence permit valid for 1 year. This  can be renewed, subject to the presentation of a valid definite or indefinite contract, and an original ‘annual tax declaration form’, stamped by the Maltese Inland Revenue Department.
• Visa-free travel within the 26 Schengen Area Countries, by virtue of the Maltese residence card. This is limited to a maximum of 90 days every 180 days.

Family Members of Work Permit Holders

Non-EU nationals who have been legally residing in Malta for over a year (in specific circumstances this may be reduced), are eligible to apply for the ‘reunification’ of family members. This includes spouses over the age of 21 and children under the age of 18.

Long-term Residents

Long-term residence status may be granted to persons legally residing in Malta for a continuous 5 year period.

A successful application requires; proof of continuous residence prior to the application date, and the ability to show stable and regular income of a stipulated amount. Dixcart can provide details of the other requirements, which include the need to have health insurance and attendance of a language and culture course.

Tax Treatment

• Tax is charged at progressive rates (capped at a maximum of 35%), on Malta sourced income and capital gains, and on foreign source income (excluding foreign source capital gains), that is remitted to Malta.

• No tax is chargeable on foreign sourced income that is not remitted to Malta.
• Capital gains are tax-exempt in Malta, even if they are remitted to Malta.
• Bank interest earned in Malta can be liable to withholding tax at 15%.

• Long term residence permit holders are not entitled to benefit from the remittance basis of taxation and will be taxed on their worldwide income in Malta.

Case Study

Dixcart Malta provided advice to a UK citizen who was still living in the UK. An important benefit of the Key Employee Initiative is that it is possible to start the  process before the relevant individual has even arrived in Malta.

This highly-skilled professional, in the ICT industry, secured his position at a Maltese employer and decided to relocate to the island once he received the ‘Approval in Principal Letter’, confirming that his application met all of the requirements and had been successful.

After being provided with all of the essential documents, Dixcart Malta made the application, on behalf of the Employee and Employer and submitted all of the forms and evidence of experience, qualifications, and health insurance, to the Authorities. In addition, we even helped to find an apartment for the newcomer.

After receiving a final decision, the KEI had 90 days to relocate to Malta.

Another Set of Circumstances

Dixcart Malta can also provide support services, relating to the Key Employee Initiative, for TCN Employees and local Employers. There may be situations where positions cannot be filled by the local labour market and where suitable TCNs can fulfil the job in the EU with a fast-track Malta work permit, rather than the company remain with vacant positions.

Additional Information

For further information on the Key Employee Initiative, please do not hesitate to contact Henno Kotze: advice.malta@dixcart.com at the Dixcart office, in Malta or your usual Dixcart contact.

Dixcart Management Malta Limited Licence Number: AKM-DIXC-23

Why Portugal?

Portugal is currently a topic of conversation, across the world, for several reasons. It is more than just the sunny weather, low cost of living, great food, variety of world winning wines and charming people, that everyone is speaking about.

The reason is simple: Portugal is a place people actually want to live and can see the possibility of raising a family and doing business in. A combination of factors now encourages leading entrepreneurs to establish and grow their companies in Portugal.

Portugal- A Few Facts and Figures

Portugal is projected to exceed the European economic growth forecasts, at least until 2024. It has been ranked as one of the best places to live according to the Global Peace Index (currently ranking 6^th on the 2022 Global Peace Index), offers very good healthcare according to the Health Care Index (with an average life expectancy of 82.47 years in 2022), and is ranked highly from an education point of view.

Traditional Portuguese Universities have become “Top Ranking” International Universities, the  “Universidade Católica Portuguesa” and “Nova SBE” were included as two of the best universities in the world by the British newspaper, The Financial Times, in 2018.

It is without a doubt a place that ticks the boxes when choosing a place to live.

Portugal’s Golden Visa – Evolution

The Golden Visa program became increasingly popular after its introduction, and attracted world attention to Portugal. The world came to learn about Portugal and having the Golden Visa, as essentially a plan B; not having to move to Portugal to be eligible, but keeping it as a potential second option for the future if things do not work out where individuals currently live, people have now shifted their attention to plan A; making a permanent move to work and live in Portugal.

Of course, moving to Portugal requires more than just a visa and there needs to be economic reasons  to do so. It is becoming rapidly apparent that the economic potential is vast and powerful in Portugal, especially when taking into account that it is a small European country on the tip of the western continent.

The D2 Visa – Becoming ‘Golden’

The D2 visa is the real Golden Visa, as it not only allows you to benefit from living in Portugal, with unlimited access to the Schengen area, but provides the opportunity to benefit from access to one of Europe’s best places to establish a business, by living there.

Portugal has become known as the California or Silicon Valley of Europe. Successful global tech events such as the Web Summit have now taken place in Lisbon for several years running – testament to the fact that it is a place that is finding the right people with the right mindset.

The D2 visa is essentially an entrepreneurial visa.

D2 Visa: The Criteria

Requirements include the following:

• Be a non-EU national
• Have sufficient funds to support yourself during your stay in Portugal
• Incorporate a Portuguese (or Madeiran) company
• Prepare a business plan
• Hold a clean criminal record
• Be willing to reside for more than 183 consecutive days in Portugal (or not be absent from Portugal for more than 8 non-consecutive months in any single calendar year)
• Show proof of a place to live in Portugal
• Be willing to become a fiscal resident in Portugal

Why Should You Reach out To Dixcart?

We are celebrating our 50^th anniversary this year, with Dixcart having had a presence in the Portuguese market, for over 30 years. We have thus dealt with many structures and arrangements from start to finish, working with international investors and families from many corners of the earth. As a trusted service provider, we look forward to welcoming you as a client.

In addition to assisting entrepreneurs to select the most appropriate legal route to structure their activities in Portugal, Dixcart also provides:

• A complete range of services relating to the incorporation of a company and its day-to-day obligations; from bookkeeping through to tax compliance.

• Assistance to entrepreneurs and their families in relocating to Portugal and in obtaining the necessary residence permits.

Additional Information

If you require additional information regarding the D2 visa and the types of company and tax frameworks available in Portugal and/or the types of visa and residence options, please contact Lionel de Freitas at the Dixcart office in Portugal at: advice.portugal@dixcart.com 

Dixcart previously shared an article in December 2022 suggesting the end of the Portuguese Golden Visa was in sight.

On 16 February 2023, it was confirmed by the Portuguese Prime Minister, Antonio Costa, that the Golden Visa programme will be coming to an end (however confirmation of when it will end and how, is yet to be confirmed).

At this point it is unclear what actions are required until the Portuguese government makes further announcements, as well as how this news may impact renewals of current Golden Visa applications, as it has also been proposed there may be changes to the current requirements for existing Golden Visa applicants.

During the week of 13 February 2023, Portugal has been the second European country to end their Golden Visa, following Ireland. The programme was intended to encourage foreign investment into Portugal and was first introduced ten years ago, in 2012, to aid the recovery from the financial crisis. It has been particularly popular among wealthy Chinese citizens, however, other citizens who have also taken an interest include Brazilians, Turkish, South African and United Arab Emirates.

So far the Portuguese Golden Visa has been one of the world’s most popular residency-by-investment programmes, raising €6.6 billion from over 20,000 individuals (according to the Portuguese Immigration and Border Services), with a spectrum of benefits, including the right to live, work and study in Portugal, visa-free travel within the Schengen Area for a period of five years, and a minimum average stay requirement in Portugal of only seven days per annum.