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A Comprehensive Guide to Investing in Portugal
Yes, there are several investment options in Portugal for investors. Keep reading to get the details!
Portugal is a lovely country with amazing coastlines, mind-blowing climate, and beautiful people. No wonder the country is famous among foreign investors. Foreigners do not have restrictions when looking for investment options in the country.
Portugal golden visa is an excellent opportunity to receive Portuguese residency by investment. The investment program started in 2012 and has gained popularity ever since. The program is for wealthy foreigners looking for European residence. Portugal's open access to critical markets, skilled human resources, and top infrastructure are helping it gain foreign investment.
Are you think of investing in Portugal for citizenship but do not know where to begin? Here is a comprehensive guide to investing in Portugal and everything you need to know about it.
The Golden Residence Permit
Portugal offers citizenship through an investment program that benefits investors than property investment.. The program requires an investment of at least £440,000 or £311,000, for properties that are more than 30 years old. These are to be located within an area of urban regeneration. Investors who wish to invest in property need to stay for 7 days in the first year of investment. Then, they have to stay for 14 days in the 2 years following the investment in Portugal. Then, after 6 years, they can apply for citizenship.
Portuguese property market
The Portuguese property market is showing stable growth and this is expected to continue. So, it is the perfect time to make your investment. The country's real estate market has expanded and increased investment opportunities. The investors gain from reasonable foreign property ownership requirements and capital gains. The real estate market is a reflection of an improvement in Portugal’s economy.
Legal requirements and taxes
The Portuguese legal system is based on non-discrimination concerning the national origin of investment. It allows the foreigners to invest in almost all economic sectors that are open to private enterprise. There are different taxes and fees associated with buying Portuguese property, apart from the typical buyer fees. It has a stamp duty of only 0.8% of the property's value, and land registry fees are charged between 0.2% and 1.2%. It also has an IMT transfer tax based on the cost of the property.
There are different options available in terms of banking in Portugal. Large banks like BBVA, Bankinter, Novo, and Santander offer mortgage options for your Portuguese investment. Deposits for the property are payable once you sign the primary agreement of purchasing. You can make the deposit overseas, but you have to bear the international transferring fees. Do not worry! Some accounts make the process cheaper.
You won’t believe that Portugal also offers an attractive rental market. Rental yield, or the total return a landlord will receive while renting out a property, is moderately good. Portugal has recently shown unprecedented growth in tourism, leading to high demand for rental properties and rental prices. It has attracted several investors as renting has become a viable business model in Portugal.
The Portuguese government has initiated various measures to attract foreign investments. It has reduced corporate tax rates, and tax credits of up to 25% are offered on incoming investments based on the location, number of jobs, and degree of technological innovation. The local government also provides additional incentives on job-creating investments.
The Federal Government has introduced additional measures to help draw investment in Portugal. It includes simplifying labor regulations to enhance workplace flexibility and creating a special regime for large products. The government has initiated "cutting red tape" with information on what measures it takes to reduce bureaucracy. Another is “Empresa na Hora”, which allows companies to incorporate in less than an hour.
Structural and Investment Funds
Portugal is also eligible for Structural and Investment Funds, being a member of the European Union. The majority of the funding is aimed at the upliftment of rural and less-developed areas. It also includes improving entrepreneurship, business innovation, and stimulating research and development initiatives. It also focuses on enhancing tradable goods and services. The advantage of the investment fund option is that it is cheaper than real estate and capital transfer investment options.
Portugal is a beautiful country with diverse landscapes. It is now catching the eyes of investors. The above guide will help you find suitable options to invest in Portugal. Portugal's real estate market is one of the best investing options at present. The country offers various opportunities for non-residents to visit and live in the country.
This article does not necessarily reflect the opinions of the editors or the management of EconoTimes