Retiring to Portugal
Are you thinking of moving there? Are you considering the benefits of retiring to Portugal? The country is welcoming, safe and secure. It offers a wonderful climate, stunning scenery, a relaxed Mediterranean lifestyle and a relatively low cost of living.
On this page, we look at the benefits of retiring to Portugal and the requirements for residency and citizenship.
Retiring to Portugal – how to get residency
Portugal is a country that welcomes new arrivals and makes the immigration process as simple as it can be. For non-EU (or non-Swiss) citizens, there are a few basic initial requirements. You’ll need...
- a valid passport
- proof of income – whether passive (e.g. from a pension) or from ongoing earnings
- private health insurance
- a criminal record check from your country of residency
Once these are all in place, you’ll have a choice of four main pathways to residency...
- The Golden Visa
- The D7 Visa
- The D2 Visa
- The HQA Visa
The Golden Visa
A Golden Visa can lead to dual citizenship, with easy language requirements and a citizenship timeline of just five years’ residency.
During those five years, there’s no need to physically move to Portugal (although, of course, you can if you want to!). You can carry on with life elsewhere while your investment works for you in Portugal on your behalf. Usually, all that’s needed to maintain your Portuguese residency all the way to citizenship is a short annual visit to Portugal (7 to 14 days).
Find out more about how to gain Portuguese residency using the Golden Visa.
The D7 Visa
The D7 Visa is often known as the passive income visa, retirement visa or digital nomad visa. This Visa is an ideal route to residency if you’re planning to retire to Portugal.
This visa has many benefits...
- A low monthly passive income, such as that which you might receive from a pension
- Access to excellent state healthcare, much of it free
- Benefit from Portugal’s special tax program, the NHR (non-habitual residency) scheme
- You can use it to study, work, or launch a business in Portugal
- You can bring your family to join you
You’ll find out more about the D7 route to Portuguese residency here.
The D2 Visa
It’s worth considering the D2 Visa if you’re not in a position to either retire to Portugal or invest in Portuguese funds or property. Neither, unlike the D7 program, do you have to demonstrate a source of regular income, such as earnings or a pension.
The main requirement for a D2 Visa is that you have a viable business (or business idea) that you can run in Portugal. This business can be of any type – manufacturing, retail, service etc.
Find out more here about the benefits of a D2 Visa and the processes of acquiring one.
The HQA Visa
HQA stands for ‘High Quality Activity’. The Portugal HQA Visa provides an alternative pathway to Portuguese citizenship for high-net-worth individuals and entrepreneurs.
There are two key benefits to the HQA program that make it a stand-out alternative to the other routes to Portuguese residency. Firstly, the application process is fast. By law, applications must be processed within 30 days of the application being received. Secondly, it’s much less costly than other routes.
All that’s needed is to demonstrate that you’re in a position to start up a business or expand your current business into Portugal.
Find out more here about the HQA route to Portuguese citizenship.
Healthcare in Portugal for Retirees
This includes all care, apart from dentistry, and is available to all residents of Portugal. You’ll need to get a numéro de utente (health number) from your local health center.
Healthcare in Portugal is free for under 18s and over 65s. Otherwise, it’s available at a lower rate. If you’re hospitalised, medication administered during a procedure is free of charge.
Medical care in Portugal has improved greatly in recent years. It’s now ranked amongst the finest in Europe – above the likes of Spain, Italy, Ireland and the UK.
If you need medical attention in Portugal, you’ll first visit your local health centre (centro de saúde). In an emergency, you can go to the nearest hospital. The SNS also has a free 24/7 hotline available in English. Call 808 242424.
For those preferring private health care, there are a variety of affordable options and plenty of private doctors.
Taxes on retirement income in Portugal
There are clear tax advantages for people wishing to retire to Portugal.
These include:
- A reduced income tax rate on foreign pensions and rents paid to non-residents
- Exemption from capital gains tax on property sold outside Portugal by non-residents
To make the most of Portugal’s tax benefits, you’ll need to apply for Non-Habitual Resident or NHR status. This is available to anyone who hasn’t been a tax resident in Portugal for at least five years during the previous decade.
Double taxation is typically avoided in Portugal thanks to double tax treaties with all EU countries and the majority of non-EU countries, including the UK and the US.
We always advise you to seek advice from a tax professional ahead of your move.
Pensions in Portugal
However, if you’re resident within the NHR program, your pension income will usually be taxed at a flat rate of 10%.
Inheritance Tax in Portugal
With countries like the UK charging up to 40% inheritance tax, retiring in Portugal can be a great way to leave more of your assets to your family instead of to the state.
In 2004, Portugal introduced a law to get rid of inheritance tax. So officially, there’s no such thing as inheritance tax in Portugal.
A warning about capital gains tax in Portugal. If you leave a property to your children or spouse in your will, and they immediately sell it, they may be liable for capital gains tax at a standard rate of 28%.
It’s also important to have a Portuguese will in place. The Portuguese authorities won’t accept wills drawn up in another country.
Retiring to Portugal – a popular choice
Portugal is one of the top places in Europe for foreign retirees.
Its unique combination of accessible residency pathways, attractive destinations and climate, affordable cost of living, and fast timeline to citizenship make Portugal an appealing choice for those looking to spend their retirement abroad.
Some of the routes to residency are straightforward. Some are complex.
Find out which pathway is best for you. Call us. We’re always ready to help.