Although Spain has always been the more readily chosen destination, Portugal’s Golden Visa program makes it a more straightforward option for British retirees than its Spanish counterpart.
Portugal isn’t outside the realm of typical expat destinations for the British. With over 60,000 UK citizens in the Mediterranean nation, it is a popular place for living and retiring. Although Spain has always been the more readily chosen destination, Portugal’s Golden Visa program makes it a more straightforward option than its Spanish counterpart.
Now that the UK is no longer a member of the EU, it is necessary to apply for a visa, which only adds to the bureaucracy of mobility. “Those who are thinking about retiring to Spain or who plan to move there but do not intend to work there, can either choose a Golden Visa or the Non-Lucrative Visa (NLV),” says John Hanafin, the founder and CEO of Huriya Private.
Portuguese residency through the Golden Visa investment program issues the applicants with Residency Cards after about 4 months (depending on the submission of relevant due-diligence and bio-metrics) and immediately thereafter allows the card holders visa-free access to 26 EU based countries, with the promise of visa-free access to over 170 countries when citizenship is attained after year five.
The Golden Visa requires you to invest €500,000 in property and so is out of the reach for many British retirees.
“The NLV allows you to take up residence in Spain, provided you have sufficient funds to support yourself and you do not need to work there. It is this requirement that is causing problems for many Britons. You have to demonstrate an income of €33,893 a year for a couple and €47,451 for a family of four. This requirement will rule out the option of retiring to Spain for many,” explains Hanafin.
According to Hanafin, Portugal offers similar benefits with regard to climate, lifestyle, and low cost of living. “Portugal has a similar visa to Spain’s NLV, the Passive Income Visa, which has a significantly lower annual income requirement – €11,970 for a couple and €16,658 for a family of four,” Hanafin explains.
Further to that, Hanafin adds that the visa also does not restrict you from working or setting up a business as the Spanish NLV does.“The cost of property and the cost of living in Portugal is around 10 per cent lower than in Spain and the icing on the cake is that you also have the potential benefit of the Non-Habitual Resident Scheme which will allow you to pay only 10 per cent tax on a UK pension and no tax on some other sources of income,” he says.
Overall the cost of living in Portugal averages out at nine per cent lower than in Spain, making it a greater success story for those seeking a place in the sun.
“Add to that the tax advantages and the fact that you can work in Portugal if you want to, and there is a clear case for considering retiring to Portugal instead of Spain if you only have limited income,” Hanafin concludes.
If you are considering moving to Portugal, then please contact the team at Huriya Private for further details on the Portuguese “Non-Habitual Residence Tax Regime”. This is an excellent regime that allows qualifying individuals the opportunity to become tax residents of a “white-listed” EU jurisdiction and still legally eliminate their taxes on most foreign-source income.
Please note, Portugal’s government has confirmed that the country’s Golden Visa Program will be subject to several new changes, starting from January 1, 2022
Other changes affecting Portugal’s Golden Visa scheme include:
- Capital transfer in a Portuguese bank account will increase from €1 million to 1.5 million.
- Capital transfer for research activities will increase from €350,000 to €500,000.
- Capital transfer in a qualifying Investment Fund will increase from €350,000 to €500,000:
- For the incorporation of a commercial company or to reinforce the share capital of a commercial company, you will have to invest €500,000 instead of €350,000, and create at least five jobs (this remains the same).