Investors from Brazil and North America have their eyes set on Portugal
The president of the Portuguese Association of Real Estate Developers and Investors (APPII) is calling for the NHR (Non-Habitual Resident) tax regime and golden visa programme to be revised in order to attract more direct foreign investment to Portugal, “in line with the government’s intentions”.
Last week, Hugo Santos Ferreira attended the CIMI 360 real estate fair in São Paulo, Brazil, where he spoke with several Brazilian citizens eager to invest in Portugal.
“They are most interested in the NHR regime; they want to know what the programme still offers, and what its tax benefits are,” Ferreira told Dinheiro Vivo website.
The NHR regime was revoked by the previous PS (Socialist) government, but a transitional period has been established until March 31, 2025, for applications that meet certain criteria, allowing for a 20% IRS tax rate on employment income for a period of 10 years. For pensioners, the tax is set at 10%, with additional tax exemptions for certain incomes.
However, over the years, the NHR regime has undergone several changes which have left it “significantly limited and not competitive”.
“We are far from what we used to offer,” he said, arguing that eligibility has become so “complex” that it is “difficult for even a Portuguese person to understand, let alone explain to a foreigner.”
In his view, the government “needs to invest in new mechanisms” or even “return” to the previous format of the scheme to attract these individuals, as Portugal competes with other European countries that have similar programs.
Focusing on the Brazilian market in particular, Santos Ferreira explained that Brazilians interested in living in Portugal are individuals “with very high purchasing power; they are wealthy people for whom security and tax attractiveness are essential.”
However, it’s not just wealthy Brazilians who have their eyes set on Portugal. The APPII president is now headed to the United States of America for several meetings with investors who “want information about how to move to Portugal”. He points out that “the political and social situation in the US is leading many Americans to wish to leave the country and explore new destinations, and we need to put Portugal on the map.”
A victory for Donald Trump in the upcoming presidential elections “will boost this movement among those who do not identify with Trump’s policies,” a trend that was noted when the Republican politician won the elections in 2016. Thus, he believes that the NHR needs to be revised in order to capitalise on this tendency.
The NHR regime, created in 2009, aimed to attract qualified professionals in high-value-added activities and pensioners receiving foreign pensions, including Portuguese nationals. As of 2022, the last official figures available, around 74,000 people with NHR status were living in Portugal, particularly Brazilians and French citizens. It is estimated that this number has now risen to over 100,000.
APPII also has proposals for a new golden visa scheme: the Smart, Social & Green Visa.
“It is a program that makes sense in 2024 and would be an evolution” compared to the regime established in 2012, said the association boss. The proposal involves granting residence visas in exchange for investments in affordable housing construction, rental market development, decarbonisation of real estate, energy efficiency, innovation, and technology, among others.
Santos Pereira explained that offering this new version of the scheme would help restore the attractiveness it lost when Portugal amended it in October, removing real estate investment as a basis for golden visa applications in an attempt to reduce property speculation.
Last year, 2,901 golden visas were granted, according to the 2023 Migration and Asylum Report from the Agency for Integration, Migration, and Asylum. Americans led the way in obtaining these residence permits (567), followed by Chinese (306), British (234), Brazilians (219), and Indians (199). Between October 2012 (the inception of the golden visas) and September of last year, 12,718 visas were granted, generating a cumulative investment of over €7.3 billion.