Sandra F. Says:
I would love to live in Portugal, but may also like to add to my retirement income while I’m there. Is it possible under their visa rules?
Global Intelligence Letter Editor Jeff D. Opdyke Says:
Hi Sandra,
Several European countries, including Portugal, offer “freelance” visas specifically aimed at those who want to live and work there for the long haul.
Portugal is, perhaps, the easiest freelance/self-employed visa to pursue in the EU, which makes it quite popular for those seeking a visa that allows for both long-term residence and permission to earn a living in Europe.
You would pursue what’s known as a D8 Digital Nomad visa. This is a visa Portugal introduced late last year and which has become quite popular among those who want to live and work in Portugal.
I am going through the D8 process right now, so this topic is top-of-mind and top-of-wallet for me personally.
I say “top-of-wallet” because there are meaningful costs involved. You’ll need a minimum monthly income of €3,040 ($3,350), provable for each of the last three months. And you’ll need savings of €9,120 in a Portuguese bank before you apply.
Plus, you’ll need to pay for a full year’s worth of health insurance you can call on if necessary in Portugal, and proof you have a place to live in Portugal, which typically entails a one-year lease contract already in place when you apply for the visa (there’s a way around this if you have friends in Portugal who can sign a document stating that you have a housing option with them).
The benefit of Portugal, however, is that you’ll be eligible for the “non-habitual residency” tax program, which imposes a flat tax of 20% for 10 years on income earned outside of Portugal. And if you can structure your salary to arrive as a dividend through an LLC, your dividend tax rate drops to 0%.
Plus, at the end of five years, you can apply for citizenship and a Portuguese passport that then gives you free reign to live and work anywhere in the European Union.
You will still owe self-employment taxes to Uncle Sam, and, potentially, personal income taxes, depending on how much money you earn living abroad.
You can read much more about your visa and residency options in Portugal should you choose to continue working in Chapter 5 of Escape to Portugal, available on the IL Bookstore here.
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