In order to liven up the economy, at the beginning of 2013, the Portuguese government opted for a reform package with tax incentives for retired foreigners that decide to live in the country for more than 183 days a year, creating the “Golden Visa”, a new type of visa for non-EU citizens.
The Golden Visa allows resident citizens outside of Europe that invest more than 500 million euro in real estate in Portugal to obtain European residency, meaning that they can move around freely in all of the Schengen area. This is a great advantage for Chinese, Russian and Brazilian citizens, providing the possibility to stay in the EU with less difficulty.
For the retired, however, the government has provided the exemption of the IRS, provided the compliance of one of these two conditions: the citizen must be taxed in another state in which Portugal has signed a convention to avoid double taxation; the income of the retirement fund cannot be generated in Portugal.
The main target are French pensioners, accustomed to purchasing property abroad and living the majority of the year in countries such as Morocco and Tunisia. The political instability in these countries has opened a breach for Portugal to act with the intention of attracting the French elderly.
In addition to the tax incentives and the visa, Portugal relies on its beautiful landscapes, its year-round mild climate, the low cost of living, security and quality of life to attract a new wave of foreigners that can shake the country’s economy. Not to mention the creation of new aerial routes, local cuisine and the hospitality of the people which enhance the charm of the country.