In 2009, Portugal introduced a range of tax benefits for both EU and non-EU citizens, which made obtaining residency quick, easy, and financially lucrative. The aim was to encourage direct foreign investment in Portugal real estate market and help get the economy back on its feet after the Global Financial Crisis. It's worked, and investors are coming from all over the world, with the Chinese the most significant.
New residents from the EU/EEA/Switzerland or holders of Portuguese residence permit are eligible for the Non-Habitual Residents Regime (NHR) for the first ten years they are in Portugal. After that, they are subject to Portuguese rates of taxes, which at a top tiered rate of 48%, tend to be lower than elsewhere in Europe.
According to Edge International Lawyers, residence means having a habitual residence in Portugal or spending more than 183 days in Portugal over the tax year from January 1 and 31 December.
For retirees pensions that may have been taxed in the countries in which they arise, will not suffer tax in Portugal. Many British pensions, for instance, can be paid gross, i.e. without deducting UK tax in the UK and with no tax due in Portugal over the ten years of the NHR scheme. The Brits, the Swedes and the French have led the way in making the most of Portugal's benevolent tax climate and real estate investment landscape, to the chagrin of their respective governments.
Portugal is also becoming more and more popular with residents from further afield – Brazil, the U.S. and Middle East, particularly expats retiring from the oil business in the Middle East. The Portuguese government’s Golden Visa (a fast-track for foreign investors from non-EU countries) and other schemes like urban renewal projects have helped establish Portugal as an attractive destination for foreign research and development companies, entrepreneurs and investors. Lisbon is fast becoming something of a creative and tech startup hub while Portugal is perceived as a stable place to do business and is ranked 29th out of 190 in the World Bank's Doing Business ranking.
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