Navigating the Legal Aspects of Moving to Portugal

Moving to Portugal is a dream for many, offering a high quality of life, beautiful landscapes, and a welcoming community. However, like any international move, relocating to Portugal involves important legal considerations. Lobo Estates has prepared a guide on the key legal steps to help make your transition to Portugal smooth and successful.

1. Understanding Visa Requirements

If you’re moving to Portugal from outside the EU/EEA, you will need a visa that aligns with your purpose for moving. Popular visa options include:

• D7 Visa: Ideal for retirees or those with a passive income, the D7 Visa allows you to reside in Portugal without the need for employment.
• Golden Visa: For individuals looking to invest in property or business, the Golden Visa provides a path to residency. Investment options range from property purchases to job creation or capital transfers, with property investments starting at €280,000.
• D2 Visa: This visa is available for entrepreneurs or freelancers who want to set up a business in Portugal.

After five years of holding a residence permit in Portugal, you may apply for permanent residency or even citizenship.

2. Registering Your Residence

Once in Portugal, one of the first steps is to register as a resident. Here’s a breakdown of the steps:

1. Get Your NIF Number: The Número de Identificação Fiscal (NIF) is essential for almost every aspect of life in Portugal, including banking, renting, and utilities. It can be obtained at any Portuguese tax office (Serviço de Finanças).
2. Register at the Local Council: For EU citizens, a Certificado de Registo de Cidadão da União Europeia (CRUE) from your local town hall is necessary after 90 days of residence.
3. Apply for Residency Card: Non-EU citizens will need to apply for a residency card at the Portuguese Immigration and Borders Service (SEF).

3. Acquiring Property in Portugal

Portugal’s legal system allows foreigners to purchase property freely, making it a great place for investment. Here are the key steps involved:

1. Conducting Due Diligence: A thorough legal check is critical to ensure the property has no debts, liens, or restrictions. At Lobo Estates, we recommend working with a local lawyer who is familiar with Portuguese property law.
2. Sign a Promissory Contract: After due diligence, the buyer and seller sign a promissory contract (Contrato de Promessa de Compra e Venda), which typically includes a deposit of around 10-30% of the purchase price.
3. Finalizing the Sale: The final deed, or Escritura de Compra e Venda, is signed before a notary. At this stage, the property is registered in your name.

Additionally, Portugal has a low property tax compared to many EU countries. Annual rates are generally between 0.3% and 0.45% of the property’s tax valuation.

4. Navigating the Tax System

Portugal offers several tax incentives for foreign residents. Here’s what to know:

• Non-Habitual Resident (NHR) Tax Regime: The NHR regime offers a flat 10% tax on foreign income for the first 10 years, which is appealing for retirees and remote workers.
• Annual Tax Obligations: Property owners in Portugal are subject to Imposto Municipal sobre Imóveis (IMI), the annual property tax, and a one-time property transfer tax, Imposto Municipal sobre Transmissões Onerosas de Imóveis (IMT).
• Income Tax: Resident taxpayers are subject to progressive income tax rates. Portugal has agreements with many countries to prevent double taxation, which is an advantage for foreign residents.

5. Healthcare and Social Security

Portugal’s healthcare system is available to residents, but it’s advisable to have private health insurance while awaiting residency approval. As a resident, you’ll have access to the Portuguese public healthcare system, or SNS. Contributions to social security are also required for those employed in Portugal.

6. Estate Planning and Inheritance Law

Portuguese inheritance laws may differ from those in your home country. Portugal practices "forced heirship," where a portion of your estate may automatically go to close family members. Planning ahead with a legal advisor is key to ensuring your wishes are honored.