ladplan

Hi all,

I'm a freelance journalist in the UK, and thinking of making the move to Lisbon in mid-2021. Had a couple questions:

1) I have read that as long as you have prove evidence of your company/activities and enough income to sustain yourself then it should be straightforward. Is there anything else I'm missing here?
2) Can I my bring my non-EU girlfriend accompany me on my self-employed visa?
3) Can I keep my company based in the UK and pay corporation tax. But pay income tax in Portugal on any salary I withdraw from UK company? I've read somewhere that you can be tax exempt under the non-habitual residents of Portugal programme.

Thanks for any light you can shed on this.

Red Eric

Hi, and welcome to the forum from me

I can give you some somewhat vague pointers to start you off.

I'm assuming you're a UK citizen and have no other citizenship, so as of Jan 1st it's all change and you'll need to apply for a visa which authorises residence and gives permission to work. For information on that start here at Portugal's border authority web page on the subject

Your non EU girlfriend could subsequently qualify for residence under family reunification provisions.There is legal provision for unmarried partners :
but I have no idea as to the degree of difficulty in satisfying the authorities in practice. You probably need to hunt out those Acts and read them to get a better handle on the theory first - I won't complicate this post with that but if you have difficulty finding or understanding them just ask on this thread.

I can't help on any matters regarding whether what you're suggesting re: keeping the company in the UK is viable. As far as I know, even when the UK was in the EU, cross border arrangements were only for the intrepid and I shouldn't think the departure will have made things any easier. You may need to take advice on that from a specialist in such matters.

With regard to NHR, you would be eligible to apply for it as a new resident and it would apply for 10 years. Under that regime, foreign-sourced employment income isn't taxed in Portugal if it is taxed in the source country. With regard to Portuguese-sourced employment income for qualifying professions (of which journalism is one), you have the option of being taxed either at normal PT rates or at a flat 20% should that be beneficial to you. There are also exemptions from PT tax on most passive income from foreign sources - without NHR you'd declare and pay PT tax on worldwide income except where the double taxation treaties give sole tax rights to the source country, so definitely beneficial if you have, or will have during the span of NHR cover, income from abroad. A recent change to the regime means that pensions from abroad are now taxed at a flat 10%, as opposed to being completely exempt from PT tax as previously.

I think that's about as much as I can comment on for the time being - hope it helps for openers.

riv

Oh I hadn't heard about the new 10% levy on pension income for new NHR people.

I have always thought that the whole NHR 'wheeze' was never beneficial to the Portuguese people or economy. Nor could it be. It's a sort of Emperor has No Clothes thing.

I assume that the thought ( if it can be so dignified ) behind NHR is the vague idea that more persons within an economy spending money is of itself beneficial in terms of 'growth'. But if that is the idea it totally ignores the deleterious effect of having substantial numbers of persons more prosperous than the average national / resident entering the property market and pushing up prices way beyond the affordability levels for locals. This has already happened in Portugal's major cities and causes real hardship. .

ladplan

Thanks for the quick turnaround of answers, it's been really helpful so far. Just a few follow ups if you don't mind?

Rambling archer

Hello and welcome
Ladplan wrote - It states you need to show adequate accommodation too, which I guess means that we can't visit Portugal and then apply for residence permit once we are there?
The normal way of doing it is to come to Portugal, stay locally to where you eventually want to settle even with brief accommodation while looking for initial rental for minimum 3 months with Contract, or longer if you want to, before finding something permanent. You have three months from arriving as a potential Resident before needing to clarify your status by applying for residency, though you can start the application as soon as you can prove somewhere to stay! If for instance you can negociate a longer term in an Air BandB via the owner, and get either the owner or residents of good standing to sign an affidavit that you are staying as such and address for the foreseeable future - or words to that effect - signed before a notary, then you can get away with not having a 3+months contract for rental - this does for people who are staying with family or friends as an example. Some people recently who needed to establish residency before the end of the Withdrawal came for brief visit and found accommodation applied for Residency, went back to sort out their affairs in their previous country, and then moved into that accommodation which had been waiting for them ...

and Ladplan wrote - If I do go the NHR route, do you know if this would affect a residence/citizenship permit application if I were to apply after five years?
First thing to do is get your NIF (tax number) from the Financas office, open a bank account (both so you can do a rental contract and pay your rent from local bank). A portuguese mobile phone (or at least a SIM card) is an excellent investment too so you can give that number as your contact.
Then you apply for Residency. Once you have your Residency (first apply to the Freguesia (village or precinct), then take that to the Camara (town hall), and then when you have signed onto the Financas website (they send the details for log-on to your postal address so its best if you have your Portuguese address sorted first, but you can change it later - and even a UK address will do but you have to be able to pick the letter up to proceed), you find the section for NHR and make the declaration, on line, that you fit the criteria. This may eventually be checked so answer truthfully!
The NHR follows the Residency - no Residency, no NHR. You do have to do your NHR by end March of the year after you become Resident, so Resident anytime in 2021 you have to ask for the NHR status by end March 2022 and you declare that you became Resident in 2021 - you do not have to wait until March the following year but that is the deadline. So asking for NHR 5 years after you became Resident, does not work ... Also note the NHR means non-habitually resident (of Portugal) so if you have already been resident in Portugal in the 5 years previous to applying for NHR you are NOT elligible!

Your other half will do the same in her own right but as your dependant (put your accommodation rental/affidavit in both names, as this can help in establishing you as a de-facto couple). Since Brexit is now completed you will both qualify as non-EU applicants as far as I know, and have to follow those rules.

Others may come on with up to date info and advice - good luck with your plans

Red Eric

You'll have to forgive us, ladplan, while we adjust to the new circumstances of the UK being out of the EU and all of its implications, some of which are very significant in terms of how permission to reside is obtained.

If you're coming as a tourist, you have up to 90 days in 180 without any other formalities at present. If you're intending to reside and to work, you ought to go through the consulate in the UK to obtain a visa prior to arrival, which allows you a period during which you apply to SEF for a residence permit. This would give you the time you need to start on matters regarding setting up your business, which you'll need in advance of making the application to the SEF.

Your actual start point for information about the initial visa is here : National Visas / General Information The link I posted earlier follows on from that, once you've arrived in Portugal. Apologies for the confusion.

The previous way of doing things, where we just turned up and got on with things, obtaining an initial residence certificate from the town hall etc is gone with Brexit. All matters of residence for UK citizens are dealt with henceforth by the consulate and SEF.

I'll come back to the other points later.

Rambling archer

Ooops - sorry, you are right, and I am out of date.

Red Eric

Is this better looked at in the light of the link I posted about the initial visa, then the application for residence once in the country? I'm unsure as to exactly what will satisfy the consulate on that initial visa application. The official literature seems to indicate that the sufficient means criteria covers it but other sources talk about it being best to have long term accommodation lined up in advance, which is obviously not easy to arrange remotely.

I haven't come across any one year requirement - the way I read things, you can apply to SEF for family reunification as soon as you have your residence permit. Then the family member lodges a visa application at the consulate in their country of residence, along with the authorisation from the SEF. Do you have a source for the one year wait?

Don't take this the wrong way but it doesn't seem completely straightforward to me. To me, it looks potentially like a load of ****ache, with quite a hefty amount of paperwork and documentation required of both of you, at least some of which may need to be officially translated and certified (although I haven't got around to checking that out yet). If your relationship with your girlfriend hasn't been formalised, you'll need to satisfy the authorities, with evidence, that you are indeed a couple. Maybe I'm overestimating the difficulty of it all but sometimes a quick read of the official sites doesn't give the full reality of the lived experience. Anyhow, don't let that put you off - it's just an aside and a note to be prepared for a bit of perseverance.

This I'm really not at all qualified to comment on.

I don't know how you'd stand with getting a work visa, residing and working completely from Portugal, for a company wholly owned by you but situated abroad. The conditions for the granting of the residence permit appear to me to stipulate that you initiate a business activity here in Portugal. And there's the matter of where you ought to make social security contributions, besides. It's not something we've had much discussion about on here to the best of my recollection but I do remember reading some accounts elsewhere of what a minefield it can be. If I come across anything that might be of use in this, I'll post a link.

NHR is just a tax status - it has no bearing at all on your eligibility for permanent residence or citizenship. For those, you'll just need to demonstrate that you've been continuously resident for the necessary period and that you satisfy any other conditions as required.

TonyJ1

Though this is what the statute says, from a practical point of view it maybe ignored. For it to be validly claimed under the nhr rules (and this is enforced), most double tax treaties (and the OECD model treaty) only allows the source country to validly tax Portuguese tax residents in respect of employment income in very limited circumstances eg 183 days in the source country amongst some other conditions (usually all the conditions are cumulative, though not always). In effect the income will be taxed in Portugal (may or may not qualify for reduced rates depending on the occupation) and taxes paid in the source country then has to be claimed from the source country

TonyJ1

You are right in the case of properties booming - but I think the reason why this has happened is a lot more complex then the 50000 new residents in 10 years that have obtained the nhr status. In general, as in most countries, people with small salaries have no ability to own or even live in properties in the centre of large cities, and as for mansions in the Algarve, this has always been mostly owned by foreigners. These issues have been amply debated in the Portuguese press and parliament.
For example, foreigners were the in the main the investors that provided the impetus for the rehabilitation of properties in central Lisbon and Porto - I do remember, (and not so long ago) that the Portuguese were avoiding these areas due to many of the neighborhoods decaying and almost no recuperation / rehabilitation of properties in central Lisbon and Porto.
On balance, if it was not for the foreigners, the Algarve would completely shut down for 10 months of the year - and effectively all it would have would be some fishing (artesenal) and some farming (oranges, figs) ie it would be a ghost resort for most of the year. Even hotels and other tourism would have been very limited as there would be virtually no income to sustain small businesses for the out of season months - ie all it would have is all inclusive hotel resorts - which is another debate ie banned).
This is a complex area and not always well managed by decision makers, but on balance, nhr has provided some impulse to the economy when it was completely in the doll drums - read up on the Portuguese economy for years 2009 - 2017 - literally hundreds of thousand of citizens, and in the main young people, had to emigrate as the economy was literally going backwards. It is still the case that Portugal now has less people than 10 years ago in spite of nhr. I am not saying that nhr saved or turned Portugal around, but it has been one of the instruments that have helped to stabilize matters -though now going into another shock due to covid.

ladplan

No worries, info you posted was helpful nonetheless.

ladplan

Ah ok, that's for clearing that up. Good to know that it would as straightforward as applying for NHR, and then continue to pay tax in UK. Do you know if possible to pay continue to pay corporation tax in UK, but then pay tax on director salary in Portugal. The main reason for keeping my company in the UK is that it has good few years of history, so would like keep that going if I can.

ladplan

(ah ok, ye I just assumed that if I go the NHR route and pay all tax in the UK. The immigration officials may not look favourable upon me having not made any tax contribution in the country.)

Thanks for taking the time to reply. Much appreciated. Hope this post may prove helpful others now that it appears we're all faced with a more difficult route to live on the continent post-Brexit.

Red Eric

I suspect Tony is saying the complete opposite, ie that if you're residing in, and working from, Portugal, it is Portugal that has the claim on your income tax (albeit on potentially preferential terms if you're registered under NHR) and not the UK.

Which was very much what I was getting at above, although I didn't have complete certainty on the matter in your particular scenario, hence my reticence to make a firmer pronouncement.

Wait for Tony to confirm before taking as gospel, though.

TonyJ1

Correct - you can convert it to a gospel