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WHAT IS THE PORTUGUESE GOLDEN VISA?

Golden Visa is a type of residence permit that allows entry and stay in Portuguese territory without the need for a residence visa.

Foreign citizens, who intend to invest in Portugal or carry out an investment activity (personally or through a company incorporated in Portugal), can apply for Golden Visa.

As for investment, can be made in any of the following possibilities:
  • Capital transfer in the amount of 1 million euros or more;
  • The creation of at least 10 jobs (no minimum investment amount is required), in any business area;
  • The acquisition of real estate with a value equal to or greater than 500,000 euros;
  • Acquisition of real estate, whose construction has been completed at least 30 years ago or located in an urban rehabilitation area and carrying out a renovation in the total amount equal to or greater than 350,000 euros;
  • Capital transfer in the amount equal to or greater than 350,000 euros, which is applied in research activities carried out by public or private scientific research institutions, integrated with the national scientific and technological system;
  • Capital transfer in the amount equal to or greater than 250,000 euros, which is applied in investment or support to artistic production, recovery or maintenance of cultural heritage, through services of central and peripheral direct administration, public institutes, entities that integrate the public sector business, public foundations, private foundations with public utility status, inter-municipal entities, entities that integrate the local business sector, municipal associative entities and public cultural associations, which pursue tasks in the area of ​​artistic production, recovery or maintenance of the national cultural heritage;
  • Capital transfer in the amount equal to or greater than 350,000 euros, intended for the acquisition of investment units in investment funds or venture capital funds dedicated to the capitalization of companies that are formed under Portuguese legislation, whose maturity, at the moment investment, is at least five years and at least 60% of the value of the investments is made in commercial companies based in the national territory;
  • Capital transfer in the amount equal to or greater than 350,000 euros, destined to set up a commercial company, combined with the creation of five permanent jobs, or to reinforce the social capital of a commercial company with headquarters in national territory, already in activity, with the creation or maintenance of jobs, with a minimum of five permanent jobs, and for a minimum period of three years.
Upon approval of the Golden Visa, a residence permit is granted for an initial period of 1 year, but with the possibility of renewal for periods of 2 years.

The main advantages of the Golden Visa in Portugal are:
  • Enter Portugal with no residence visa required;
  • Reside and work in Portugal, and must at least stay in Portugal for a period of not less than 7 days in the first year and not less than 14 days in the following years;
  • Circulate through the Schengen Area, no visa required;
  • Benefit from family reunification;
  • Request, after five years, the granting of Permanent Residence Authorization or the acquisition of Portuguese nationality, by naturalization, complying with the other requirements required by the Nationality Law, namely sufficient knowledge of the Portuguese language.
Golden Visa meets the opportunity to invest in Europe with the possibility of residing in Portugal, one of its most emblematic countries and with the most stable borders throughout history.

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WHAT IS THE MOST COMMON FORM OF SECURITY TAKEN OVER REAL ESTATE IN PORTUGAL?

There is three standard security taken over real estate: voluntary mortgage, retention of title and seizure. Concerning mortgage, it should be formalised through public deed or by a certified private document. To produce its legal effects, a mortgage must be registered at the land registry office. As for the retention of title, it should be incorporated using a duly authenticated contract or public deed and is also subject to registration at the land registry office so it can be used against any third parties. Finally, a seizure is done through a lawsuit and is not subject to specific conditions. The mortgage is by far the most widely used security.

WHAT IS A PLEDGE?

A Pledge is a security for an obligation to ensure that payment will be made by selling some specific assets of the debtor. Under Portuguese law, a pledge (penhor) may be created over cash or fungible securities. To be valid, a pledge depends on delivery of the asset or assets to the creditor or the third party as a trustee or bailee. There are two types of pledge: civil and commercial. A commercial pledge is a pledge between entities or individuals subject to the regulations of the Commercial Code. These will be individuals with the capacity to carry out commercial acts or entities that engage in commercial activities. In general, the requirements for a civil pledge are somewhat stricter than those for a commercial pledge. A civil or commercial pledge may be used depending on the status of the parties. In practice, a civil pledge is more likely to be used.

I FOUND THAT THE PROPERTY I PURCHASED HAS DEFECTS, WHAT CAN I DO NOW?

Every consumer purchase is covered by a mandatory legal guarantee. As long as you are a consumer, no seller can claim otherwise. Legally, the property must not suffer from any defect which has a negative impact on its value or which renders its regular use impossible. If these warranties are breached, the consumer can choose between repair, replacement, refund or a price reduction. However, the buyer must notify the seller of defects within one year of their discovery. If the property is newly built, the purchaser will also benefit from a five-year warranty period. According to Art. 1225 of the Civil Code, the seller is liable for damages in respect of certain defects during five years, if he has also constructed, repaired or modified the building.

Corporate tax rate reduction

The State Budget for 2015 lowered the corporate income tax rate to 21% (it was 23%). Corporate tax is a tax levied on profits derived by both resident and non-resident entities. This decrease corresponds to a loss of tax revenue of around EUR 200 million. The aim is to create conditions to attract foreign investment. It is important to note however the adding of the state tax (between 3% and 5%, depending on the amount of taxable income) and the municipal surcharge (up to 1.5%) wich give a real tax rate of around 25%.

NUMBER OF NEW COMPANIES RISES

Business formation with new businesses having been started in Portugal went up in 2017. Over 3,687 new companies were registered in Lisbon (14.5% more than in 2016), while Porto registered 7,107 new firms (5% up on the previous year). On the other hand, business failures in Portugal fell 12.7% in 2017 compared with 2016 to 6,284, while the number of new companies being set up rose 9.1%, to 40,465. Lisbon and Porto saw the highest number of bankruptcies – 1,683 and 1,330 respectively, but these were still 2.4% and 15.4% lower than in 2016.