American investors and high-net-worth individuals want greater flexibility in their investments, travel, and lifestyle. Unsurprisingly, most are seeking a second residency or citizenship in EU countries through investment programs. Portugal offers an attractive and high-quality environment for the US expat community, making the Portuguese Golden Visa very popular. Portugal’s residency by investment program is offered to non-EU nationals with substantial investments in the country, such as capital investments, real estate investments and employment generating opportunities. It has lenient residency requirements and fast-tracks the process of securing citizenship in an EU country without permanently leaving the US. With this visa, you can be eligible for Portuguese citizenship within five years.
Most wealthy American investors covet the Portuguese Golden Visa because of its wide range of benefits, including:
- Tax incentives
- A Solid Plan B
- Lenient residency requirements
- Ability to live, work and travel visa-free in Schengen countries.
Tax Benefits of Portugal’s Golden Visa
Tax implications play a crucial role when deciding where to relocate and invest. One of the primary attractions of Portugal as an investment destination is the presence of a unique and competitive tax regime for high-net-worth individuals and expats, the Non-habitual tax regime (NHR).
The NHR regime exempts taxation for most foreign-sourced income. Any income from interests, profits, dividends, or salaries earned in the US or other countries outside Portugal is untaxed. If you are self-employed or hold qualifying employment, you enjoy a 20% flat rate on income tax. Under NHR, pensioners benefit from a flat rate tax of 10% on their income. Investors get a 20% flat rate tax on capital gains. This provides a competitive investment environment.
Most investors choose the real-estate investment option. In Portugal, property prices are significantly lower than in the US.
Crypto investors in Portugal also enjoy favorable tax incentives. Particularly, any gains from the acquisition and sale of cryptocurrencies are untaxed. This means traders and investors are exempted from capital gains tax when they buy or sell cryptocurrency. Nonetheless, companies that provide crypto-related services are taxed on capital gains, on a scale of 28-35%. Investment funds in Portugal are taxed at 10% for Portuguese tax residents, and at 0% for non-residents. Other tax benefits include the absence of wealth and inheritance taxes.
Portugal’s Golden Visa as a Solid Plan B for Americans
The pandemic showed that the world could never be too prepared for calamities. It exposed all countries, including the US. This phenomenon prompted many high-net-worth individuals to seek second residence and expand their passport options.
Moreover, the worldwide economic implications highlighted the need for a diversified investment portfolio and wealth management for protection against unpredictable Black Swan events. Portugal’s Golden Visa allows US applicants to diversify their assets by undertaking various investment ventures, such as purchasing property in Portugal. Applicants may also qualify for second citizenship in a stable environment. It is an opportunity for better asset allocation, sound contingency planning, and access to better social amenities.
Most high-net-worth individuals want to ensure that their children have a solid future.
Investing in Portugal’s Golden Visa as a plan B has become popular among Americans as Portugal ranks high among the safest nations in the world. It also boasts good weather, affordable living, and high-quality social services. Additionally, the requirements for the visa are highly flexible and appealing to those who want citizenship in an EU country but cannot permanently immigrate from the US for business reasons.
Lenient Residency Requirements of Portugal’s Golden Visa
Portugal’s Golden Visa appeals to most American investors because of its lenient stay requirements. To secure Portuguese citizenship, you do not need to leave the US and settle in Portugal full-time. You only need to be in the country for an average of seven days per year. After five years, you are eligible for citizenship. Once you secure citizenship, the residency requirements become unnecessary.
Ability to live, work and travel visa-free in Schengen countries
Portugal is a member of the European Union. Holders of Portugal’s Golden Visa can eventually obtain a Portuguese passport and experience the full benefits of EU nationality, including living and working freely in various EU countries, traveling visa-free in Schengen countries, and fully accessing the EU single market.
American investors with Portugal’s Golden Visa also benefit from the free movement of labor, goods and services. In addition, they have access to a broad market of over 450 million consumers.
As life in the US becomes more expensive and stressful, it is expected that the “golden visa frenzy” will continue. Although there are other visa options, high net-worth Americans desire convenience and flexible investment options. They also want increased global mobility. From multiple investment options to lower taxes and full access to EU opportunities, it’s no surprise Portugal’s Golden Visa program is so popular.
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