Property Law and Foreign Investment in Portugal

Property Law and Foreign Investment in Portugal

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• Why invest in Portugal?
  Portugal is a member of the European Union and part of the Schengen area. The political and social environment in Portugal is stable. According to data produced by the Institute for Economics and Peace in 2018, Portugal is one of the safest countries in the world and has a workforce that is fluent in English. Portugal, with its long coast, excellent climate and welcoming people??, also offers an excellent quality of life. Portugal has, since 2009, introduced a variety of tax benefits for EU and non-EU citizens. These benefits have made investment and residence easier, quicker to obtain and financially advantageous. According to PWC's study Europe's Best Kept Secret "the tax framework for private individuals is very attractive and exceeds other regimes in many ways". Some general facts about Portugal:

  • 4th safest country in the world
  • Number 1 in expatriate quality of life
  • 17 World Travel Awards in 2018 (including World´s Leading Destination)
  • Lisbon is in 1st place as "World's Leading Destination City" and "World's Leading City Break Destination".
  • With more than 3 thousand hours of sun a year, an "easy and cheap" residence program and a health service "that costs a fraction of the cost in the USA", Algarve was, at the end of 2018, selected by Life and Invest Overseas as the best destination in the world for foreign and retired people in 2019.

  Portugal is the seventh best country for retired foreigners, out of a total of 25 countries, according to a ranking published in the monthly magazine, International Living, which describes Portugal as "the best retirement refuge for pensioners in Europe"

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• What do I need to know before I buy a property?
  Before buying a property, you must ensure that you comply with the necessary investor status requirements, e.g. legal representation. Select the property according to your requirements; Evaluate the terms of the transaction and, if necessary, select the lending bank that offers the best terms; You should contact a lawyer before you sign the Purchase Contract or the Transfer Deed, in order to be advised regarding the legal aspects of the transaction and the necessary documentation; You should also instruct a lawyer to provide you with advice and assistance regarding the other steps required in connection with your purchase.
  

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• Can I make purchases or engage in other transactions without having to travel to Portugal?
  Yes. The best thing is to instruct a lawyer to represent you in the making of transactions on your behalf/ in your name.

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• Do I need to have a tax representative?
  non-tax resident persons/ Persons not tax resident in Portugal are required to appoint a tax representative domiciled in Portugal (which can be a natural or legal person), which operates as the link between the non-tax resident person and the Tax and Customs Authority.

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• What documents are required in order to be legally resident in Portugal?
  You will have to apply for a Tax ID Number (NIF) and also have to obtain a permanent or temporary residence permit, or an investment-linked residence permit (Golden Visa).

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• Are there any foreign investment restrictions in force in Portugal?
  There are no foreign investment restrictions in force in Portugal and the principle of non-discrimination of investment on the grounds of nationality applies. There is no national partner requirement or restrictions regarding the repatriation of profits by the foreign shareholder.

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• What are the areas in Portugal with the highest property values?
  There are various areas of this type in Portugal. Lisbon: mainly in historic neighbourhoods and the seaside town of Cascais; Porto: Aldoar/Foz do Douro/Nevogilde, Baixa do Porto; Algarve: Quinta do Lago and Vale de Lobo; There are several other attractive areas in Portugal, e.g. its historic villages that can be found from the north to the south of the country.

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• What tax benefits are available to foreign nationals in Portugal?
  Foreign nationals can benefit from Non-Habitual Resident Status, which involves the following tax benefits: a) Taxation: a fixed 20% IRS (personal income tax) rate on employment income earned in Portugal; b) No double taxation of pension and employment income received / earned abroad / in the country of origin, subject to certain conditions; c) 50% of the employment, business and professional income of taxpayers who return to Portugal within the next two years is free of tax.

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• I am Portuguese. Can I take advantage of the tax arrangements normally available to foreign nationals?
  No. Portuguese citizens cannot take advantage of these tax benefits.

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• I own a building and want to carry out works to it. Can AMS provide me with legal advice and assistance regarding the obtaining of the necessary licenses and consents?
  Yes, AMS provides legal advice and assistance in such cases. Despite the fact that many types of works are now free of the formalities to which they were formerly subject, the conduct of works must comply with certain administrative requirements. AMS provides all necessary legal advice and assistance in the obtaining of construction permits and consents, e.g. construction, reconstruction, extension, redevelopment and repair permits and legalization of works, in direct contact with the proper administrative authorities.

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• I am going to undertake an construction/ urban renewal project. Does AMS provide advice and assistance in such cases, or only in connection with new builds construction?
  AMS provides overall legal advice and assistance in connection with property development projects. The legal advice and assistance we provide regarding property projects range from the making of the various types of contracts with the proper authorities to the completion of the construction urban renewal process, whether this involves the construction of new buildings or the refurbishment of existing buildings.

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