Portugal: Picture Perfect

Situated on the Atlantic seaboard, Portugal is one of the oldest countries in Europe. It boasts an excellent reputation, which is hinged on the country’s offering of sunshine, stability, and security. Portugal also brims over with culture, making it a favored destination for individuals and families seeking a new adventure, be it for a vacation or for long-term residence.

Getting to Know Portugal
The region of present-day Portugal was inhabited as far back as circa 400,000 years ago. By the time of the expansion of the Roman Empire to the Iberian peninsula (3 BCE), it had already been visited by Phoenicians, Carthaginians, Greeks, and Celts, who mixed with the native Lusitanians. The region was later occupied by Germanic tribes and the Moors before an independent kingdom was established in 1139. In the 15th century Portugal rose to dominance as a colonial power, later abandoning its system of dictatorship in favor of democratic
rule.

Over the past few decades, Portugal, which has a population of almost 10.4 million, has done a remarkable job of improving its global positioning both socially and economically. While Portugal is shifting towards offering business-oriented services, a third of its economy remains in manufacturing. The country is the world’s largest supplier of cork and enjoys the benefits of a strong tourism industry. Portugal is a member of the Schengen Area and the EU and began using the euro as its currency in 2002. Today, the country has a GDP of USD 217.6 billion, and its unemployment rate is less than 9% of the total labor force. According to the latest update of the Henley Passport Index of March 2019, Portugal has the 5th most powerful passport in the world (alongside Austria, the Netherlands, Norway, Switzerland, the UK, and the USA), since it enables holders with visa-free or visa-on-arrival access to 185 destinations.

Portugal’s real estate market is set to be among the top performers in Europe, aided by investor anxiety over Brexit

Golden Residence Permit
Through its Golden Residence Permit (GRP) program, Portugal has produced streamlined legislation that enables non-EU citizens to obtain a residence permit based on investment, thus creating eligibility to subsequently apply for the Portuguese passport.

The Portugal GRP program is a five-year residence-by- investment program for non-EU nationals. The residence permit allows free circulation in the Schengen Area and requires a stay of an average of only seven days per year in Portugal over this period. Current legislation offers three qualifying routes of committing funds to obtain residence status under the GRP program. Residence must be maintained for a minimum of five years, after which the applicant is eligible to apply for Portuguese citizenship.

While the capital transfer option is the most straightforward route, Portugal has a thriving real estate market that is diverse and offers attractive investment potential. The GRP is valid for a period of one year after issue and is renewable for two subsequent periods of two years,

equaling a total of five years for the program. Thereafter, applicants have three options to choose from. They can either:
• Extend the GRP by two years,
• Apply for permanent residence, or
• Apply for citizenship (Portugal allows double
citizenship)

The University of Coimbra is one of Europe’s oldest, with origins dating back to 1290. The university is an official UNESCO World Heritage Site, and its Baroque Library, pictured here, is a national treasure, housing over 50,000 books from the 16th to the 18th centuries

Taxation in Portugal
There are numerous benefits to Portuguese citizenship, and one of them is that the country allows dual citizenship. Another attractive factor is Portugal’s taxation system. Personal taxation for non-residents on Portuguese-sourced employment and pension income is charged at a preferential rate of 25%, although interest and rental income, dividends, and capital gains are taxed at 28%. For new residents wanting to become tax resident in Portugal, the non-habitual resident (NHR) regime may be more beneficial. Once NHR tax status is obtained, income derived from a Portuguese source through a number of defined, high-value professions will be subject to income tax at a flat rate of 20%, although some surcharges may apply.

Income derived from a foreign source and relating to employment income, pension income, and business and professional income can be subject to exemption.

Register to receive the digital version of each edition of the Global Citizenship Review