Portugal’s Top Residency Visa Options

Portugal’s Top Residency Visa Options—And Who They’re Best Suited To

Portugal is the number-one destination in Europe for ease of residency.

The Portuguese government is eager for foreign investment, offering a wide range of residency visa options designed to attract different types of people.

It’s innovative and adaptable, introducing new visa options like its Digital Nomad Visa, launched in October 2022, in response to changing trends in global migration.

It’s also home to one of Europe’s most popular golden visa programs. The Portugal Golden Visa has brought in more than US$6.5 billion since its inception in 2012.

The government made changes to the Golden Visa, mainly to do with the minimum investment thresholds and geographic restrictions, which went into effect in early 2022.

The program remains popular despite this. However, the changes raise an important point: if you’re interested in taking action offshore, do it when you’re able to, while you’re eligible for whatever opportunity you’re considering.

You never know when that opportunity will no longer be available to you—either because requirements change and you no longer qualify or because the opportunity is eliminated altogether.

Faced with this ever-evolving situation, what are the residency visa options for the average American who wants to live in Portugal?

Your first option is to visit as a tourist. This allows you to stay in the entire Schengen zone, including Portugal, for 90 days in any rolling 180-day period.

That could be 90 days straight in a Schengen country followed by 90 days outside the Schengen zone, or you could spend 30 days in and 30 days out on an ongoing basis.

To stay longer than this, you’ll need a residency visa. Here’s a rundown of the top residency options in Portugal and who each option is best suited to.

The Best Option For Retirees: The Passive Income (D7) Visa

The Passive Income or D7 Visa allows non-EU nationals to gain residency in Portugal simply by showing you can support yourself with reliable ongoing passive income (whether from financial investments, a pension, or rental income).

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This visa is best suited to people who want to live in Portugal, rather than pure investors. It’s the visa option most retirees use, although it’s not technically a retirement visa.

Officially, you need to prove you receive passive income equal to the Portuguese minimum wage, which is about US$825 per month, in order to qualify for the D7 visa.

In reality, approval depends on the discretion of the immigration officer who processes your application. A higher monthly income (about US$1,300) will improve your chances of approval.

A good immigration attorney can help you navigate these complexities.

Following this residency path, you’ll be required to spend at least 183 days in Portugal. This makes you a Portuguese tax resident.

The visa is valid for two years, after which it can be renewed for three years. You need to spend six consecutive months or eight non-consecutive months in Portugal to be able to renew your permit.

Thanks to your residency status in Portugal, you’d be able to spend the rest of the year in any Schengen country(ies) of your choosing. As a legal resident of one EU country, you can spend as much as 90 days at a time in any other EU or Schengen country.

The Best Option For Investors: The Portugal Golden Visa Program

The Portugal Golden Visa Program allows non-EU nationals to obtain residency by making investments above certain thresholds in predetermined economic areas.

Aimed at attracting foreign investment, it’s best suited to someone who wants fast-track residency in Portugal with few strings attached.

It stipulates a minimal physical presence of only one week per year on average (or 35 days over the course of the permit’s 5-year validity). If you don’t want or aren’t able to spend the majority of your time in Portugal, this is the option for you.

And unlike the D7 visa, you don’t necessarily need to become a tax resident of Portugal under the Golden Visa program.

As long as the investment is secured in Portugal, the Golden Visa residence permit does not expire, provided it is renewed. You have to keep your investment for Golden Visa residence permit purposes.

You can qualify for Portugal’s Golden Visa program in one of three ways:

  • Through the purchase of real estate
  • By starting and operating a business in Portugal
  • By making an investment in the production of art or the country’s heritage

Starting and running a business doesn’t work for everyone, and the investment in art or the country’s heritage amounts more to a donation than an investment.

Real estate is the most straightforward option, and qualifying this way can be extremely affordable—as little as 280,000 euros. To qualify for that amount, you must purchase property that is at least 30 years old and located in a low density or underdeveloped area.

That restriction isn’t very restrictive, though, as much of the country beyond Lisbon and Porto qualifies. The difficulty can be finding a property in these areas that is older than 30 years and selling for enough to meet the threshold.

Many older properties across this country need renovation and are therefore bargain-priced. The renovation cost can be included in your total investment to meet the Golden Visa threshold, but that means you’ve got to undertake a renovation.

If you instead buy a piece of property less than 30 years old in a low-population area, the required investment is 400,000 euros. If you buy a newer property not in a low-population area, you’ll have to invest 500,000 euros.

Investment in commercial property is not geographically limited.

The Best Option For Working Professionals: The Portugal Digital Nomad Visa

Portugal’s Digital Nomad Visa allows non-EU nationals who are self-employed or employed by a company that is not based in Portugal to obtain residency. It’s best suited to professionals who earn their income online.

This visa requires you to earn four times the minimum wage, which amounts to about US$3,300. You need to show proof that you have received this amount for at least the past three months.

This visa type requires you to spend 183 days per year in the country, therefore also requiring you to become a tax resident. You’ll need to submit tax residency documents along with your application.

The Digital Nomad Visa is a one-year residence permit. If you continue to meet the requirements, you can renew it twice for two years at a time.

Is Portuguese Citizenship An Option?

Portugal may be the easiest place in Europe to get a second passport through naturalization.

Regardless of which path you pursue to establish residency, you can apply for citizenship after 5 years of legal residency or 10 years of illegal residency.

Yes, you read that right. Portugal allows you to apply for citizenship if you can show you’ve been residing in the country illegally for 10 years or more.

You’ll have to pass a test in Portuguese as part of your citizenship application. You don’t have to be fluent; you just have to have a basic understanding of Portuguese.

Portugal allows you to hold multiple citizenships, meaning foreigners can obtain Portuguese nationality without having to give up their previous citizenship.

Aside from being a crucial step in internationalizing your life, a Portuguese passport is a powerful travel document that allows visa-free access to 114 countries, visa on arrival in 48 countries, and electronic travel authorization (ETA) in 3.

Your Tax Picture In Portugal

The tax burden of living or investing in Portugal isn’t necessarily more burdensome than it can be in the United States. Sometimes it can be less burdensome. It all depends on how your income is derived.

In general, a retired American shouldn’t owe any more in taxes on their pension and/or Social Security income than they would if they were living in the United States.

Portugal currently offers what it calls a Non-Habitual Resident Tax Regime. This allows new residents who haven’t been tax resident in the country for the last 5 years to apply for a 10-year tax break. This means that the bulk of your income during those 10 years will be tax-exempt in Portugal.

If you have a portfolio that kicks off rental income, dividends, or interest income, you’ll want to dig a little deeper into the details of the relevant tax code.

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