Why Portugal Is A Top Choice For Foreign Investors?
“Where else could I have all this? In February?” asked the retired Swiss investment banker sitting inside Fabrica Coffee Roasters on Lisbon’s Rua da Flores, gesturing towards the sunny street outside.
In 2016, he and his wife joined a steadily increasing trend of expatriates taking up Portuguese residency and bought a villa just outside Lisbon. Over coffee and pasteis nata, he described winters spent sailing and playing tennis, wining and dining, enjoying music, art and shopping and golf on the championship courses at Penha Longa in the Sintra foothills and Oitavos Dunes (see picture). And, he added, almost as an afterthought, it helped that Portugal’s tax regime was so attractive.
So attractive, in fact, that pwc published a report on why Portugal is a top choice for foreign investors, Europe’s Best Kept Secret. In 2009, Portugal introduced a range of tax benefits for both EU and non-EU citizens, which made attaining residency quick, easy, and financially lucrative. The aim was to encourage direct foreign investment 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 Residence 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 residencein Portugal or spending more than 183 days in Portugal over the tax year from January 1 and 31 December.
