Portugal is a lovely delusional country but people might not realise how complicated Portuguese government and taxes can be. More than any other country, moving to Portugal needs preparation and even leaving needs preparation. I have always done my own taxes globally but becoming a tax resident in Portugal and getting NHR -without- preparation or advice was a mistake for me. Portugal is a wonderful beautiful kind calm country with some of the nicest people in Europe but Portugal is also completely suicidal in a few ways. Particularly, fecundity is the lowest in Europe, taxes for low to medium earners are almost 50%, the government requires much registration and regulation of employment and even buying a bag of groceries or a night in a hotel usually involves entering your NIF number for government monitoring. The tax website has almost no English. Portugal is great for Chinese investors starting skilled professional companies because the Portuguese workers are smart, educated, great English speakers, civilised, calm, (never dickheads or selfish) and Chinese companies can pay their offshore managers a little in Portugal but mostly back home with apartments and shares that the Portuguese government never sees or taxes. Also, if you are French, moving to Portugal can be wonderful because apartments are one third of the price of Paris and the taxes with NHR planning will be greatly reduced for 10 years then you go home or to Monaco. For other people, without advice and assistance, moving to Portugal can be trickier than you might expect to get into and to get out of - even after you leave you must still pay accountants and tax offices may be closed. Other countries report all global income to Portugal and Portugal taxes on all global income, also, some countries like Thailand have no dual tax agreement with Portugal and capital gains taxes are 28% even from your first Euro and NHR does nothing for single company capital gains - nothing! I see many professional websites stating flatly that NHR protects against capital gains taxes and that is simply not true except for fixed asset sales abroad. Portugal is an exceptionally nice but dying country and there are some great reasons to move there but do prepare carefully and get ready to pay for professional help both before you arrive and even after you leave - check the details. Finally, Portuguese women are smart, educated, independent, fun and they enjoy dating handsome young poor Portuguese men who are charming liars. In general, they have no interest in rich old men and they do not like giving up any part of a single woman's life for marriage or children. I was very surprised when I thought I was in a quiet Fado music bar in the old streets of Porto when an ancient landlady asked if I wanted to buy her a "bar-girl" drink. Portugal is lovely, Portuguese women are great friends, company and employees, but old foreign businessmen moving to Portugal should bring their own wife or girlfriend with them.
Thank you for the detailed information. I didn’t see Saudi Arabia in the list of the black listed countries and they have zero income tax , but 20% VAT . I was surprised because Kuwait , Qatar, and the UAE are on the list .
Out of my research captial tax for cryptos is free in portugal, i am from germany and want to apply for a NHR to get the status and live there half a year
@@OffshoreCitizen and what can I do in my situation? I am Portuguese, but last year I moved to Germany. Can I ''pay'' crypto taxes to Portugal? Many thanks 👍
I would also be really interested in this.. as living the UK and have a New Zealand passport and lived here for 20 years so I'm keen to understand how long you need to be in Portugal each year to qualify for residency and the 0% capital gains tax also do you need to own a flat or can you rent one.... Be fantastic to get info on this 👍
@@pedro_santos the details here really matter. You have to look at your residency status in each, possibly the tax treaty and operate accordingly. The best if you've got specific questions is to book a call calendly.com/michael-rosmer?month=2021-03
It makes a lot of sense what you say.. But it would be better if you talk a bit slower.. Don't forget we have to proces in our minds what your saying.. Just a saying this as a interested viewer and observer.. 😉
I am retired and had hoped to relocate to Portugal... however, I have been advised that Portugal now levies a 10% income tax on expat income --- including pension/retirement income...!!!
@@MichaelRosmer what's the definition of 'pension'? From what I've heard, it appears to be a pretty broad term that can apply to 401k, Roth, tIRA. Have not been able to get a crisp explanation with regard to Roth tax treatment, which is US tax exempt with respect to both contributions and capital gains. I understand that some countries have equivalent Roth treatment per their tax treaties with the US (France, Belgium, Malta), but given the fact that the US/PT tax treaty was ratified before the inception of the Roth, there appears to be a gap.
If you are a USA Citizen, you will pay USA tax no matter where you live. If you claim Portugal NHR and you live in Portugal for more than 183 days a year , you are going to pay 10% ( not zero any more) depend on the source of income. US-Portugal Tax treaty may exclude SS from double tax,. Don’t know 401k and IRA income.
I like how Nomad Capitalist calls it "the Swiss cheese" of tax exemptions, since it's full of holes. These Latin countries are too freaking complicated: what's the incentive for such a small, poor place to be so convoluted? Thanks for the great info.
There are many german youtubers who have moved to Madeira claiming "they just like the island" and they imply that they are not saving much on taxes and that this is not their main reason they moved there. I call that bs but I am not 100%.. could you elaborate on that? Most famous one is Simon Unge.
Thanks for this informative video! I have a UK LTD comp and looking at moving to Portugal under the NHR. I have a few questions, if you would care to answer :-) 1. What are the tax rates on Salary from the UK to Portugal? 1A. Could you take a high salary from the UK company and not pay the UK corp tax? 2. Do you have to still spend time In the UK to keep the LTD co there? 3.What is the minimum time you have to spend in Portugal each year for the NHR? Thank you! ☺️
1. Depends on the type of income - best to book a call about this 2. No 3. It's not any the NHR it's about your residency permit, again best to book a call about this
so in which cases, you can have a zero or very low overall tax with dividend income? any jurisdiction examples you can give? Also I heard self-employment income outside portugal will not be taxed in portugal at all, so if the country where you are registered as a sole trader charges very low tax, that will be your final tax, is this right? One could pay from the US LLC or UK LLP to the sole trader account making it self-employment income - and hence doesn't matter how Portugal treats dividends.
This information isn't accurate. Dividends are tax free under the NHR except for from blacklist jurisdictions but you will likely be taxed on the other side. There are also other rules to consider. The best option if you're wanting to explore it is to book a call and we can discuss your situation and I can guide you on the best solution for you.
Excellent video. A treasure trove of info. I noticed that in this video you went all "Jim Cramer" on me 🤣. Had to replay some parts to make out what you said as you talked at 110 mph haha. Keep in mind that not all of your audience consists of native English speakers. Cheers!
Hey! Great video! Even tho I couldn't really understand where a guy, that made money from crypto, doesn't like to pay taxes on gains, lives the vanlife can fit in the examples. Can this guy be a citizen of Portugal, paying 0% taxes on crypto gains/dividend, living in his van like a man in paradise? Thanks!
This video goes through the main minor but important details like a minimum 10% taxation on foreign passive income + 20% maximum Income tax for skilled jobs + a "company foreign management control" matter and so on (IMPORTANT). Well done!
I am going to move to Portugal in the next year - virus permitting. The primary reason is because I have sizable unrealized capital gains in crypto and Portugal affords me a 0% tax rate on those gains. However, I would also like to reside there with the purpose of acquiring the citizenship. I have 3 income streams 1) Passive income from crypto lending platforms 2) Dividend income from a US equity portfolio 3) Rental properties in Asia, and Europe (not Portugal). I know these are tax free under NHR but I am still subject to a 15% withholding tax on the dividend income from the US. As an individual, this is automatically collected by my broker. I want to eliminate this withholding tax if possible. Is there a US structure that could be used to obviate this tax and still remain complaint with NHR stipulations for tax free income from overseas? I had thought to use an LLC, but having heard your remarks, i am hesitant. I am not a US citizen or resident and and therefore a non-resident alien for tax purposes. Any advice would be appreciated.
Hi, I’m in a very similar situation, I have dividends and interest from U.S. funds that I invest in and I’m wondering how the hell do you get rid of the 15% withholding, brokers withhold that 15% automatically, can you recuperate that 15% from the Portuguese government, if I can’t get 0% or close to that then I’m not moving to Portugal 🇵🇹
@@p.c.h.6721I don't think 0% is remotely possible and reclaiming it from the Portuguese government is equally impossible. Maybe if you are paying taxes in Portugal, you might get a tax credit. However, if you are paying nothing, no rebate will be possible. Some nations have 10% withholding rates (China, Bulgaria) and could be options for account registration before "forgetting" to update your address details.
@@David-lb1fk Thanks, I was set in the idea of moving to Portugal under the NHR program believing that 0% tax on capital gains and income from U.S. investments was possible, but that 15% withholding on dividends and interest from the U.S. has ruined everything, however there are places where you can get 0% tax on those same investments, such as Panama, I know a couple that just moved there. I don’t know what I’ll do now, have to do more research
The real issue with Portugal for most entrepreneurs is it's management & control rules and it's permanent establishment rules. The US-Portugal tax treaty defaults to if we can't agree on where to tax a company both countries can tax it, so that is particularly bad for most US citizens in the event they are looking to move overseas.
Great introduction video, I am a British citizen, I have rental income from Hong Kong (taxed in HK), also share dividend from Hk and US. Am I qualified for the NHR? Do I have to pay on my share dividend or capital gains on selling of share or property?
One Problem with the real estate option in Portugal and other countries is the high VAT (somtimes around 20%+). On a 500k property plus transfer taxes, you need to make it back on appreciation, otherwise you lose. Any countries with CBI without high VAT/transfer taxes?
Well most of the time real estate options aren't great for CBI. This being said the rules for VAT etc often vary on new vs used properties. Unfortunately, you can't be too choosy with these programs because they are fairly limited at least to achieve the things we usually want.
Hey so did I understand it right, that if you want to apply for the NHR Program the income source has to come from another country than Portugal? So if I want to start a Digital Business and build a corporation in Portugal (because you can't just move out if you build one in Germany) I will not be fit for the NHR Program anymore? Digital Products can be sold all across the globe, so where is it exactly where digital nomads get their money from? Loved the video :) thank you so much
Well you can apply for the NHR but local dividends won't benefit from special tax treatment. So you need to build an international company and use that. Tons of options for this but it's very case by case and depends on clients, suppliers, substance etc. The best if you've got questions is to book a call and we can discuss calendly.com/michael-rosmer/
Scenario. UK citizen whose sole income is from cryptocurrency investments. Wishes to live in Portugal six months of the year and by doing so would like to negate UK CGT. A) Can a zero tax rate apply in Portugal for such a person and B) Can that person then utilise part of those funds to buy assets (eg property) in the UK at a later time without being liable for CGT in the UK? This on the basis that he/she is classed as a non habitual resident in Portugal. Thanks.
A) probably, though specifics matter B) possibly yes but there's some UK rules you need to worry about, I created a video about this recently Yes, can qualify for NHR if you haven't been living there previously. There's a bunch of details that matter in all of these cases so it's not quite so straight forward as yes or no. The best if you'd like to go through the specifics is to book a call calendly.com/michael-rosmer?month=2021-03
@@OffshoreCitizen Thanks for the speedy reply. I'll seek out the video you mentioned above and will certainly consider booking a call if/when the "pipe dream" becomes somewhat closer to reality.
You have to go to the finance office to get the NHR tax. At least that's what they told me. Also, it is better to speak to an accountant and let them do your taxes. You may need to review your information on this program and redo the program. Speak to the tax office in Portugal and to accountants. You need to say The following income is tax free in Portugal under the NHR program: 1) ......., 2).... Then say you will pay 10% tax on the following income: 1)....2) etc. etc. etc. Most people coming to Portugal are retirees! Start with, "If you are a retired investor with dividends and interests income the following applies: 1)...2)...Start with this is how it works for US, Australian, Canadian, etc. retired residents under the NHR! It sounds like you need to speak to a lawyer, too. Explain when the NHR changed and what that means for new people coming to Portugal. Talk about what the residents who applied before the NHR change last year. There are hundreds of thousands under the old system. People who got their NHR tax in Jan 2020 may be here checking to see if it is correct. See comments below from people who have already signed up for the NHR program.
Interesting video, thank you very much. I'm a self-employed (online branding coach) from Canada. I was told by a Portuguese lawyer, a year ago, that I would qualify for the 10-year tax break. This has changed? Obrigada ~
Hello, I am Belgian and I work with 2 clients located outside Europe (Seychelles). Can I open an LLC in the United States in New Mexico for example, and get paid in dividends while having tax residence in Portugal and NRH status in order to benefit from 0% tax. Is this amount legal in my case?
If you have a taxed US Pension + Social security and US investments that their Dividends and Capital Gains are taxed in US, will you be taxed in Portugal too (none of the income is generated in Portugal)? What is the best EU residency visa so you can avoid becoming a Tax resident ( I would not want to establish a company or work in EU or remotely work from EU)?
Hey Michael, just came across this video of yours as my wife and I are looking at relocating to Portugal from Canada. We will be keeping all accounts open in Canada as I receive my pension from Veterans Affairs. My main question is: I understand you said pensions are taxed at 10%. If I have my pension deposited to my BMO account in Canada and tax removed there does this tax amount still apply in Portugal? I was going to deposit it in Canada and then just transfer whatever I need to a prepaid credit card or to a Portuguese bank whenever I need funds.
im a bit confused regarding the cbi program of portugal. j other video in youtube it said that after buying a approved property in portugal and hold for 5 years then you can apply for a citizenship and the processing time is more than 6months after applying for it. but you said in this video that it would take 10years.
No I didn't say the 10 years is to get citizenship, I said 10 years is the duration of the non habitual resident tax status. Citizenship is basically 6 years.
I heard somewhere that royalties are only exempt from one source. I.e. if you have royalties coming from USA, Germany, Australia or whatever, you have to pick one. Is that true?
Great info! Musician/recording artist here moving to Portugal later this year. Partner/husband & I have a CA partnership, total earnings based on global royalties. Would we qualify for NHR, should we restructure our business to facilitate lower taxes? Thanks, subscribed!
You probably could qualify this being said depending where the payments are coming from you might want to be careful how you structure yourself to get the best optimization. Feel free to reach out to discuss.
Good morning, by joining the NHR tax regime, is it possible to enjoy the exemption of capital gain from financial capital gains (trading) as a physicalperson by operating with a broker outside the Portuguese territory? or is it necessary to open a company in another country to trade, as in panama-type territorial tax states ..? Thanks so much, great videos !!
Thanks for posting this video, it's so helpful! Do you have knowledge of setting up a company in Ireland and getting paid dividends with NHR status? Would this be tax exempt? Also, in a situation like this what rate of social security does a Portuguese resident pay? At the moment I am a freelancer and the rate is 21.4 which seems quite high. Thank you!
Dividends from an Irish company would be tax exempt. Whether the company would need to pay Portuguese tax is another question. There are no social securities payable on dividends.
Question: will Americans who are on SS pension, which is already taxed by the US, be taxed an additional 10% if they move to Portugal? If the answer is yes, why is that not considered double taxation? Thanks, AG
Hi Michael, very good video. I have a question. If i get the residence permit in Portugal with the D7 and i have a SRL in Romania that pays 3% tax gross income, what tax i have to pay if i pay myself with dividends lets say 3 times per year to a Portuguese bank account, do i pay only the tax income in Portugal?
So this is a great question because Romania can be a great place to use for Portuguese tax planning. It's worth noting that you can often get away with all kinds of things but I don't advise it, I advise planning properly so you don't have any concerns. So the first thing to recognize is that technically if you are managing and controlling that company from Portugal that is a Portuguese company under the tax treaty. Second, if you're the only employee and you're doing all the work of the business from Portugal that's Portuguese source income. You constitute a permanent establishment of the company within Portugal. So in those scenarios you don't gain anything by having a coolant really anywhere. If in the other hand you can have management and substance of the company in Romania or at least not in Portugal then it can be a very good way to benefit. But in that scenario you could actually benefit more than described here. First, yes in that scenario you could defer the company income but you could also qualify for the NHR and pay zero tax on the dividends, which is very efficient.
@@MichaelRosmer Thanks for the answer! Aha, so in that case without substance in Romania and without being 100% sure about to qualify for the NHR, it could be better to get a residence there, right? I didn't see any video about a Romanian residence permit for Non-EU. What do you think about that option, hard to get it? I had been there even 3 months in a row and i loved so for that side i am all in.
Please could you answer this question for me? I'm 62 and live in the UK and would like to move to Portugal. I don't work and don't plan to work, the money I have to live on is from a house sale, I plan to use this money to live on in Portugal, the rest of it I will invest in gold and silver. My question is if this investment goes up massively in the future will I be taxed on this profit? Also do I go for a retirement visa or a D7 visa? Retirement age in the UK is 66 years old. Thank you.
D7 has nothing to do with age only with proving passive income up support you. As far as being taxed it depends on the type of income. Generally it will be taxed somewhere though.
If you're a US citizen living in Portugal and get your income from dividends from your stock portfolio with Schwab for example, how are those dividends taxed in Portugal?
Interesting analysis! What about dividends from a non-resident owned LTD with a US LLC as a branch? In this case, the LTD would be a holding company doing investments
Depends where the Ltd is based. The dividends could be tax free if it's in the right location but be aware you've also got to worry about management and control and source income rules
@@NomadicJulien yeah it makes sense if you've got enough scale because you can have a foreign director. If you don't have enough scale it doesn't make sense
Thank you Michael! So as a US citizen is there any other option besides puerto rico to get very low or 0%? (besides renouncing & the limited $ amount of 110k with FEIE)? Is there anything worthwhile for US citizens with NHR Portugal?; Cap gains, corporate, dividends, ect? Any videos that might explain alternative Puerto Rico tax options further? THANKS!!!
If i understand correctly based on your guidelines, if one setup an offshore company after moving to portugal, in order to pay himself in dividends, it would look like he is trying to avoid taxes and would be considered as portugal income or so (high tax). Is there a way of doing so after moving in such a manner that would be ok?.
What if im employed in my home country, getting regular salary after taxes, allowed me to work remotely abroad and i would like to stay in portugal. My position is IT-related with income that meets the financial capacity as a temporary resident. But i am an employe and therefore a dependent IT worker. My country does not have a double tax treaty with portugal
If you're not resident in your home country you shouldn't be taxable there so you should be able to get those taxes back or at least the foreign taxes credited but it depends on the country. Best is to book a call to go over specifics calendly.com/michael-rosmer?month=2021-03
There are often ways to structure so that doesn't matter so be sure you need one before you write it off, then make sure you can't structure indirectly to achieve the same before you write it off as a possibility.
@@MichaelRosmer thanks Michael. Biggest thing for me is the management & control/PE rules. Hungary is seeming to be the best option for me until I have enough for any of the Bulgarian programs (or can just live there after 5 years of getting long-term residency status in Hungary if that's still what I'd want). Do you have much experience with the Hungarian residency through Kft formation with no employees? Not sure about the business plan - don't really want to pay 10,000 euros to someone there to help and get it rejected out of hand.
Can they qualify for sure. The question is what kind of tax rates can they optimize for and that will be 20% on the high end down to as low as maybe 3% if they can structure it right through a corporate structure so that's where careful and proper planning is worthwhile.
I am curious about social tax, thats something I got very surprised by because Its incredibly high unless you are employed from a portugal company (from my understanding) but otherwise it seems to be 30% of social tax which is huge. I cant find too much info about social tax, is there anyone who dont have to pay social tax, if you tax in your own country while living in country thats fine. But other than that is social tax always a must, the whole 0% tax thing seems to be a bit of a scam if you have to pay 30% social tax.
I think you're referring to social contributions on wages or what are sometimes called payroll source deductions. If that's what you're referring to, they don't apply on dividends or investment income so we enter into the question of what your income source is.
@@MichaelRosmer I believe she’s referring to Social Security (Segurança social) contributions. These are super high, and based as a percentage of your income. So even if you’re only paying 20% income tax under NHR, you will likely end up paying an extra 15-30% on top of that, meaning you’ll pay similar or more than living in another European country without an equivalent regime to NHR.
@@Bcbweb yeah that's why I mentioned you don't pay social contributions on dividends or investment income. Please note though the other EU nations typically have those socials as well ON TOP OF higher income tax. As a percentage of the gross salary what workers take home tends to be quite low, even worse if you look at what it costs the employer.
@@MichaelRosmer Agreed that it's absurd, and the public healthcare is not good quality in Portugal, plus their sovereign debt is enormous. However, you're likely to end up paying more tax in Portugal even with the special NHR rate than you would in other EU nations (I've lived in the UK, Spain, and Portugal), unless, like you say, most of your income comes from a pension or dividends/investments
@@MichaelRosmer I thought that under NHR the social security tax is only 3.5% for the first 10 years. That seems much better than the 15-30% mentioned here.
Hi there thanks for the video I my wife and I have us passports we have 2 kids. She has EU passport we have temporary residency. We have no income/business in Portugal. We come every 6 months to satisfy our residency requirements. Is my tax liability 0?
If you are a US citizen living abroad and you receive dividends that are effectively taxed below 20%, won't you always have to pay the difference anyway to the I R S when you file your return (20% - % you paid)?
@@OffshoreCitizen hi thank you not only escape but even pay less than 20% really for qual div rates you receive from a foreign company isnt that right, so even if u live in a low tax jurisdiction u are kind of stuck at 20% div tax rate until you do one of the things u suggest i believe is that right
hey. can you create a video on how to declare income for tax purposes in Portugal. I have recently moved to Portugal, and work freelance. My income comes from other countries, but I am a resident in Portugal. I am trying to find information online, but I am struggling due to the language barrier.
Michael Rosmer no I don’t. When I’ve lived in other counties, for E.g.: U.K. I’ve been able to complete an online form which is fairly easy and declared income for tax purposes.
Hi Michael, thank you so much for this explanation. Great content. I'm in the UK, planing to move to Portugal where I'm from... I have a limited company in the UK and I was told that because I'm the only director of the company, when my tax residence changes, the company tax residence will have to change to Portugal as well. Meaning that it will have to pay taxes in Portugal (21% on the corporation tax + 23% on company social security) and that my salaries from the company would also be taxed in Portugal (11% social security plus the 20% IRS flat rate for NHR). Same for the dividends: because they would be considered dividends from a portuguese company I would be taxed 28% on the dividends. Is this information correct?
Anyone has moved from Eu country (EU citizen) to Portugal and kept being self-employed as programmer (under his own name business in home country) and then paid tax only in home country (that has double tax avoidance treaty with Portugal) and then zero tax in Portugal? Or it's not possible (at least by a law - perhaps in practice some people get away with that) and a person should move business to Portugal (under NHR or simplified tax etc.). Anyone who successfully applied for NHR under "Added value" profession to be self-employed?
Michael, first off, thank you for the great content! Question, my understanding is that UK capital gains are actually taxable at 28% rate in Portugal even under NHR scheme due to this type of income not being taxable in the UK for non-residents. This is obviously very confusing because you might have stocks from US, UK, Ireland, Singapore etc in your portfolio, how do you know which one are taxable in the Portugal under NHR and which ones are not? Do you know any source that would summarize nicely sort of saying "US cap gains and dividends are tax free, UK cap gains taxable but dividends tax free etc"
Thanks for the question. Yes, so foreign sourced capital gains are tax exempt, the question is "what qualifies as foreign sourced?" Property is obvious so that one isn't an issue. The issue is when you've got stocks in foreign companies, which often aren't considered foreign earnings. There are some ways using corporate structures to plan around this if the volumes are high enough but in general you should assume the sale of shares are not necessarily foreign
I still have not heard what happens when you just earn money from outside of Portugal. All my clients are foreign and I don't think I'll ever work locally.
If you're under the NHR and you have a foreign company that's not operated likely it could be possible to avoid tax but the details really matter so you need to get into them.
@@OffshoreCitizen Assuming I move in, get NHR and set up a sole proprietor business and all my clients are from outside PT. Does that mean 0%? Or any business is taxed at a regular tax rate?
@@kiwus87 no, that would typically be taxable locally if you structure it that way but we need to get into the details. The best if you'd like to go over the specifics of your situation and what might be possible for you is to book a call and we can go over it: calendly.com/michael-rosmer/
Thanks for the great video. I am an American working remotely for an American US-based company and I was thinking of moving to Portugal. Do I have to pay income taxes to Portugal?
Well the main appeal of Portugal from a tax standpoint is the NHR. Greece isn't as good unless you're in a very high income bracket then you can get a flat €100k/yr. On the flip side Portugal isn't very good once you run out of the NHR. I'd say most people prefer to live in Portugal than Greece but that's personal preference.
Does it mean that I would not pay taxes on my Social Security pension for ten years because I would qualify under the Non Habitual Resident category? I've never lived in Portugal, so I should qualify, but do I still pay from year One?
I will be fully taxed by the US on both my SS payments AND my online work, so im NOT about to spend time in any other country that is going to try and tax me on that SAME income!......that would just be crazy!!....the fact i would be spending buckets of cash in their country IS my tax!....
Hi. How about remote workers? I am in the US working full time for a US company planning to move to Portugal and keep working for this company remotely. As US citizens we are required to pay income taxes in the US which my employer in the US will keep withholding from my paycheck. I’ve heard that because of the tax treaty if I apply for NHR in Portugal I will pay zero taxes there? Is that correct?
Hi Michael, does it makes sense for Crypto investor, to take part in NHR program if I want to become resident of PG and make a sale of my holdings? Im from EU, Im asking because I dont know if it will it be considered foreign income under NHR or will it be considered general income with 20% tax? It is my only income.
Portugal doesn't tax crypto capital gains. That being said there are other factors to consider depending on where you're from. Feel free to book a call if you'd like to discuss and work out what would be best for you calendly.com/michael-rosmer/offshore-citizen-30-min?back=1&month=2021-03
@@MichaelRosmer Hi Michael. The rule that Portugal doesn't tax crypto is not so clear. It actually might tax, depending on the amount. It is very risky. I've been having meetings with top law firm here and they told me that if you cash out a bigger amount, the tax man might decide that it is not a hobby but a professional activity and tax within normal IRS brackets, which are huge
By default a single member LLC is treated the same as an S corp so do you mean switch to c corp? If you get paid as an employee you'll pay tax. The question is how much, which depends on a variety of factors. Usually that's not the best way to go. Feel free to book a call to discuss if you'd like to go over what might work best for you Www.clarity.fm/michaelrosmer
If I have a individual micro-company in Brazil (Brazil has a tax treaty with Portugal) and can earn up to around 15k euro/year tax free, will that money be taxed in Portugal? Also, if I have a client from Canada and get paid as a freelancer, will I have to pay taxes in Portugal? How do I know if this payment was already taxed in Canada?
Do you have any advice on someone who used to run a sole proprietorship in the UK with mainly UK clients, moves to Portugal and operates in the same manner with the same clients? Is there a way to qualify for the NHR? I need to get the application done my end of month so would appreciate some input. I will book a call with you.
Really insightful video the issue I've heard mixed messages on is the yearly amount of days you need to spend in Portugal to qualify for the NHR benefits. Some say over 183 days other say less. Would be interesting to get your take on this? Also you mentioned dividends in HK and the fact they'd be liable for 20% in Portugal... Would it be the same if you paid yourself a director's fee from a HK company, which is subject to salaries tax in HK?
There's some confusions here. Taking advantage of the NHR isn't about a number of days in the country. The NHR has nothing to do with number if days in the country it has to do with treatment based on tax residency in Portugal. If you're not tax resident it doesn't benefit you. Now, to maintain residency there depends on the visa you're under. Golden visa for example requires almost no time and D7 requires well over half the year though you can get away with spending a bunch of that time in other Schengen countries. Now, this raises the other point, which is you could still be taxable in another country so you've got to separate those two things. Now, as for HK it's not that the dividends will be taxed at 20% it's that it will trigger the CFC rules where all your share of the profits of the company will be taxable at a penalty rate, which is much worse than taxing dividends. Directors fees paid will typically be taxable in Portugal as earned income and could risk the foreign company being taxed as a Portuguese resident company so...
@@MichaelRosmer Thanks Michael, I may reach out to you via your website or on Clarity for some further consultancy depending on how my situation unfolds
Hi, great informative video Myself and my wife currently reside in the UK I have retired but do not receive my state pension, however I do live on the rental income from numerous properties My wife works as an employee, either remotely or within the office. We are interested in knowing if by renting a property in Portugal it would enable us to qualify for the 10 year 0%tax incentives that Portugal are offering ? Be it on Income (rent), capital gains or inheritance tax ? Would we no longer pay any tax in the uk ? Would this also allow us to have unrestricted travel to other EU Countries ? Cheers H
Very informative video. I am a software engineer. Originally I'm an Israeli citizen and lately I got my português citizenship. I consider move my life to Portugal in order to live and/or avoid taxes. I have a US LLC in Wyoming, it is an online business that gives worldwide online service (portugal and US are not between the clients). I am operating the business online. I would like to get the company's incomes while paying 0% taxes. Is there a way to do it? What are the step? Apply to NHR? How should i define my self? How should I get the money from the company to my account in portugal, as a salary? dividends?
Great content! I cannot find an answer anywhere in the internet. Hypothetically.. as a individual with EU passport and no job or other income but the one from crypto staking, will I be able to cash out big amounts of crypto in Portugal tax free? Or they will consider me as a professional trader since this is the only income I have, I will not trade daily, maybe cash out once a month, or once every 3 months, will they still impose tax on me in that case?
Hi, interesting video, thanks for sharing it. If you live in EU country (for example Spain) and you trade stocks and crypto. Is it possible to set up a company in Portugal for just capital gains and pay zero tax that this company generated living and trading in other EU country?
Set up in Portugal? No, Portugal is a terrible place to have a company. You could set up abroad though in some other country but you've got to make sure you follow all the corporate residency and source income rules.
HI, Thank you for the great content and videos ! i hold dual citizenship (USA/FRANCE) , Currently living and operating an online business in USA. What is the best option (taxes) when it comes to moving to Portugal ? Moving as French (EU citizen) or as US citizen ? I will be operating the business online from Portugal and all customers / revenue remains in USA.
Hi, Kamel! Thank you for the comment! Since your situation is very specific, it would be best to book a call calendly.com/michael-rosmer and we'll be able to talk about all of the options, in detail
This is soooo confusing, I'm a US citizen and plan on retiring in Portugal. I have rental real estate in the states which is in an LLC and other investment income. Will I qualify for the NHR reduced taxes? I have a management company for the property so I am not actively managing.
I dont get it. so i am a self employed IT specialist. My company is registered in Poland. So if I move to Portugal and get a visa I will still have to pay taxes in Poland but not in Portugal. But if I register my company in Portugal. and perform services and earn money from polish company I will pay 0% tax?
If you're the only person in the company and you're running the company from Portugal, sitting in Portugal doing the work then generally you'll be taxable in Portugal. To get into further planning details it's best to book a call with us
@@OffshoreCitizen I just passed my tax exams and now I am a tax advisor but your videos was a help, ie tax Havens Delaware ect.. I want to learn more about taxation of gas and oil.. that what I am doing now
@@thomaswalmsley4532 good for you that's awesome. Oil and gas is its own beast depending on where you are in the world because source income is very clear, there's often special tax rules in certain parts of the world due to royalties etc. But then there can be tax credits or special structures for things like exploration and then lots you can do rough depreciation etc.
@@MichaelRosmer I am based in Frankfurt as I seen in one other videos talking about our CFC rules.. I like to go America Texas looking at the moment, but with Oil and Gas I know very very little.. I know the EU tax world better also import rules manually to UCC Union customs code.. I understand both U.K. Germany tax system better. Looking at American but Big 4 things online .. they give a very very good overview.. but need to understand America tax legislation
I have a question, if i move to portugal under NHR, and i get paid in crypto from abroad (lets say i invoice a company in Dubai for my services). Do i pay 0% o 20%?
First it's a really good topic that you've addressed in this video albeit hard to follow many times. As a US/EU dual citizen investor receiving dividends and capital gains from the US, is this taxable in Portugal? I believe that you've stated that cap gains and dividends from foreign sources are tax free.
I'm an italian citizen living in the US planning on moving to portugal to live there and not work. My only source of income will be from trading crypto and investments. Will I qualify for no tax residence?
You can qualify for the NHR, but whether you'll be taxed or not depends on many factors. When it comes to crypto - if you just hold and sell, no tax is applied (that's the case with any currency fluctuation); crypto trading could be recognized as proffesional trading and therefore - be taxed. Investmets are a whole other thing, and again can vary from one situation to another. It would be best to book a call if you want me to look into your specific situation calendly.com/michael-rosmer?month=2021-03
To get the tax advantages, does the money have to come from Portugal or does it also work when the money comes from outside of Portugal (other European country)?
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No crypto tax in Portugal,,,
Portugal is a lovely delusional country but people might not realise how complicated Portuguese government and taxes can be. More than any other country, moving to Portugal needs preparation and even leaving needs preparation. I have always done my own taxes globally but becoming a tax resident in Portugal and getting NHR -without- preparation or advice was a mistake for me.
Portugal is a wonderful beautiful kind calm country with some of the nicest people in Europe but Portugal is also completely suicidal in a few ways. Particularly, fecundity is the lowest in Europe, taxes for low to medium earners are almost 50%, the government requires much registration and regulation of employment and even buying a bag of groceries or a night in a hotel usually involves entering your NIF number for government monitoring. The tax website has almost no English.
Portugal is great for Chinese investors starting skilled professional companies because the Portuguese workers are smart, educated, great English speakers, civilised, calm, (never dickheads or selfish) and Chinese companies can pay their offshore managers a little in Portugal but mostly back home with apartments and shares that the Portuguese government never sees or taxes. Also, if you are French, moving to Portugal can be wonderful because apartments are one third of the price of Paris and the taxes with NHR planning will be greatly reduced for 10 years then you go home or to Monaco. For other people, without advice and assistance, moving to Portugal can be trickier than you might expect to get into and to get out of - even after you leave you must still pay accountants and tax offices may be closed.
Other countries report all global income to Portugal and Portugal taxes on all global income, also, some countries like Thailand have no dual tax agreement with Portugal and capital gains taxes are 28% even from your first Euro and NHR does nothing for single company capital gains - nothing! I see many professional websites stating flatly that NHR protects against capital gains taxes and that is simply not true except for fixed asset sales abroad.
Portugal is an exceptionally nice but dying country and there are some great reasons to move there but do prepare carefully and get ready to pay for professional help both before you arrive and even after you leave - check the details.
Finally, Portuguese women are smart, educated, independent, fun and they enjoy dating handsome young poor Portuguese men who are charming liars. In general, they have no interest in rich old men and they do not like giving up any part of a single woman's life for marriage or children. I was very surprised when I thought I was in a quiet Fado music bar in the old streets of Porto when an ancient landlady asked if I wanted to buy her a "bar-girl" drink. Portugal is lovely, Portuguese women are great friends, company and employees, but old foreign businessmen moving to Portugal should bring their own wife or girlfriend with them.
Thank you for the detailed information. I didn’t see Saudi Arabia in the list of the black listed countries and they have zero income tax , but 20% VAT .
I was surprised because Kuwait , Qatar, and the UAE are on the list .
Probably because of the difficulties and different tax treatment for non-Saudis
@@MichaelRosmer I think they took out the UAE of the black list
@@hellophoenix no they didn't but there was a court case where it was ruled they couldn't apply the blacklist when there was a tax treaty.
Could you make a video for cryptocurrency investors from EU ?
Will do, what would you like to know specifically?
Out of my research captial tax for cryptos is free in portugal, i am from germany and want to apply for a NHR to get the status and live there half a year
@@OffshoreCitizen and what can I do in my situation? I am Portuguese, but last year I moved to Germany. Can I ''pay'' crypto taxes to Portugal? Many thanks 👍
I would also be really interested in this.. as living the UK and have a New Zealand passport and lived here for 20 years so I'm keen to understand how long you need to be in Portugal each year to qualify for residency and the 0% capital gains tax also do you need to own a flat or can you rent one.... Be fantastic to get info on this 👍
@@pedro_santos the details here really matter. You have to look at your residency status in each, possibly the tax treaty and operate accordingly.
The best if you've got specific questions is to book a call
calendly.com/michael-rosmer?month=2021-03
With US LLCs, you also have to pay yourself a "reasonable salary" before you pay yourself dividends.
I find $120,000 to be a perfect amount 😂
Thank you for the explanation.
I just received my NHR approval (I arrived from Canada in 2023)
Should I keep receiving dividends or switch to Salary?
Beautifully explained ! One of the best videos on this topic 👍
Thanks!
It makes a lot of sense what you say.. But it would be better if you talk a bit slower.. Don't forget we have to proces in our minds what your saying.. Just a saying this as a interested viewer and observer.. 😉
Thanks for the feedback!
You can slow down the video, 2 clicks ;)
You can put the video at 0.75x speed.
I am retired and had hoped to relocate to Portugal... however, I have been advised that Portugal now levies a 10% income tax on expat income --- including pension/retirement income...!!!
This has been discussed by the Government but not implemented.
As described the tax rate depends on the type of income. 10% on pensions, 0% on some other, 20% on some other etc
@@MichaelRosmer what's the definition of 'pension'? From what I've heard, it appears to be a pretty broad term that can apply to 401k, Roth, tIRA. Have not been able to get a crisp explanation with regard to Roth tax treatment, which is US tax exempt with respect to both contributions and capital gains. I understand that some countries have equivalent Roth treatment per their tax treaties with the US (France, Belgium, Malta), but given the fact that the US/PT tax treaty was ratified before the inception of the Roth, there appears to be a gap.
Nice one, US LLC is zero percent tax for non US citizens not living in the US ...
Not necessarily no. I've got a couple videos about how this works. That's just the US perspective though.
If you are a USA Citizen, you will pay USA tax no matter where you live. If you claim Portugal NHR and you live in Portugal for more than 183 days a year , you are going to pay 10% ( not zero any more) depend on the source of income. US-Portugal Tax treaty may exclude SS from double tax,. Don’t know 401k and IRA income.
0% on many types of income, 10% is on pensions
Wow, that was SUPER clear! Thank you 🙏
Happy to be of service :)
Anything you'd like to see next?
Another great video. Love the breadth of knowledge per jurisdiction. Have not found a bad video yet.
Thanks! Anything you'd like to see?
I like how Nomad Capitalist calls it "the Swiss cheese" of tax exemptions, since it's full of holes. These Latin countries are too freaking complicated: what's the incentive for such a small, poor place to be so convoluted? Thanks for the great info.
The D7 has a minimum stay of 6 months. The NHR has no minimum stay. If I get the D7 and then the NHR does that mean have a minimum stay or not? Thanks
There are many german youtubers who have moved to Madeira claiming "they just like the island" and they imply that they are not saving much on taxes and that this is not their main reason they moved there. I call that bs but I am not 100%.. could you elaborate on that? Most famous one is Simon Unge.
Madeira is actually a very beautiful island. But yes you can have a company there paying 5% tax
Thanks for this informative video! I have a UK LTD comp and looking at moving to Portugal under the NHR. I have a few questions, if you would care to answer :-)
1. What are the tax rates on Salary from the UK to Portugal? 1A. Could you take a high salary from the UK company and not pay the UK corp tax?
2. Do you have to still spend time In the UK to keep the LTD co there?
3.What is the minimum time you have to spend in Portugal each year for the NHR?
Thank you! ☺️
1. Depends on the type of income - best to book a call about this
2. No
3. It's not any the NHR it's about your residency permit, again best to book a call about this
so in which cases, you can have a zero or very low overall tax with dividend income? any jurisdiction examples you can give? Also I heard self-employment income outside portugal will not be taxed in portugal at all, so if the country where you are registered as a sole trader charges very low tax, that will be your final tax, is this right? One could pay from the US LLC or UK LLP to the sole trader account making it self-employment income - and hence doesn't matter how Portugal treats dividends.
This information isn't accurate.
Dividends are tax free under the NHR except for from blacklist jurisdictions but you will likely be taxed on the other side. There are also other rules to consider.
The best option if you're wanting to explore it is to book a call and we can discuss your situation and I can guide you on the best solution for you.
Excellent video. A treasure trove of info. I noticed that in this video you went all "Jim Cramer" on me 🤣. Had to replay some parts to make out what you said as you talked at 110 mph haha. Keep in mind that not all of your audience consists of native English speakers. Cheers!
What information did you find helpful here? If you had invested $10,000 with Jim Cramer ten years ago it would be worth $500 today.
@@erikberg849 what does investing with Jim Cramer have to do with anything here?
Hey! Great video! Even tho I couldn't really understand where a guy, that made money from crypto, doesn't like to pay taxes on gains, lives the vanlife can fit in the examples. Can this guy be a citizen of Portugal, paying 0% taxes on crypto gains/dividend, living in his van like a man in paradise? Thanks!
Michael, if you want to make more money, you need to make more content: you are very knowledgeable and likeable - people trust you
I make a video a day...
This video goes through the main minor but important details like a minimum 10% taxation on foreign passive income + 20% maximum Income tax for skilled jobs + a "company foreign management control" matter and so on (IMPORTANT).
Well done!
Thank you!
Anything you'd like to see next?
@@OffshoreCitizen I sent tou some messages in clarityFM, for a paid consultation
I am going to move to Portugal in the next year - virus permitting. The primary reason is because I have sizable unrealized capital gains in crypto and Portugal affords me a 0% tax rate on those gains. However, I would also like to reside there with the purpose of acquiring the citizenship. I have 3 income streams 1) Passive income from crypto lending platforms 2) Dividend income from a US equity portfolio 3) Rental properties in Asia, and Europe (not Portugal). I know these are tax free under NHR but I am still subject to a 15% withholding tax on the dividend income from the US. As an individual, this is automatically collected by my broker. I want to eliminate this withholding tax if possible. Is there a US structure that could be used to obviate this tax and still remain complaint with NHR stipulations for tax free income from overseas? I had thought to use an LLC, but having heard your remarks, i am hesitant. I am not a US citizen or resident and and therefore a non-resident alien for tax purposes. Any advice would be appreciated.
No you can't eliminate the it you might be able to reduce it a bit
@@MichaelRosmer Does the 15% withholding tax apply to your first $105k dividend income that receive while living abroad?
Hi, I’m in a very similar situation, I have dividends and interest from U.S. funds that I invest in and I’m wondering how the hell do you get rid of the 15% withholding, brokers withhold that 15% automatically, can you recuperate that 15% from the Portuguese government, if I can’t get 0% or close to that then I’m not moving to Portugal 🇵🇹
@@p.c.h.6721I don't think 0% is remotely possible and reclaiming it from the Portuguese government is equally impossible. Maybe if you are paying taxes in Portugal, you might get a tax credit. However, if you are paying nothing, no rebate will be possible. Some nations have 10% withholding rates (China, Bulgaria) and could be options for account registration before "forgetting" to update your address details.
@@David-lb1fk
Thanks, I was set in the idea of moving to Portugal under the NHR program believing that 0% tax on capital gains and income from U.S. investments was possible, but that 15% withholding on dividends and interest from the U.S. has ruined everything, however there are places where you can get 0% tax on those same investments, such as Panama, I know a couple that just moved there. I don’t know what I’ll do now, have to do more research
The real issue with Portugal for most entrepreneurs is it's management & control rules and it's permanent establishment rules. The US-Portugal tax treaty defaults to if we can't agree on where to tax a company both countries can tax it, so that is particularly bad for most US citizens in the event they are looking to move overseas.
He mentions that after the minute 6:00. I'm interested on this matter as well (CFC Rules and "place of central management" of a company).
Great introduction video, I am a British citizen, I have rental income from Hong Kong (taxed in HK), also share dividend from Hk and US. Am I qualified for the NHR? Do I have to pay on my share dividend or capital gains on selling of share or property?
One Problem with the real estate option in Portugal and other countries is the high VAT (somtimes around 20%+). On a 500k property plus transfer taxes, you need to make it back on appreciation, otherwise you lose. Any countries with CBI without high VAT/transfer taxes?
Well most of the time real estate options aren't great for CBI. This being said the rules for VAT etc often vary on new vs used properties.
Unfortunately, you can't be too choosy with these programs because they are fairly limited at least to achieve the things we usually want.
Hey so did I understand it right, that if you want to apply for the NHR Program the income source has to come from another country than Portugal? So if I want to start a Digital Business and build a corporation in Portugal (because you can't just move out if you build one in Germany) I will not be fit for the NHR Program anymore? Digital Products can be sold all across the globe, so where is it exactly where digital nomads get their money from?
Loved the video :) thank you so much
Well you can apply for the NHR but local dividends won't benefit from special tax treatment. So you need to build an international company and use that. Tons of options for this but it's very case by case and depends on clients, suppliers, substance etc.
The best if you've got questions is to book a call and we can discuss
calendly.com/michael-rosmer/
May I ask whether we need to pay 10% tax if we receive monthly pension from Hong Kong, in which we have to pay tax in Hong Kong?
Pensions are taxed at 10% in Portugal
Scenario. UK citizen whose sole income is from cryptocurrency investments. Wishes to live in Portugal six months of the year and by doing so would like to negate UK CGT. A) Can a zero tax rate apply in Portugal for such a person and B) Can that person then utilise part of those funds to buy assets (eg property) in the UK at a later time without being liable for CGT in the UK? This on the basis that he/she is classed as a non habitual resident in Portugal. Thanks.
A) probably, though specifics matter
B) possibly yes but there's some UK rules you need to worry about, I created a video about this recently
Yes, can qualify for NHR if you haven't been living there previously.
There's a bunch of details that matter in all of these cases so it's not quite so straight forward as yes or no. The best if you'd like to go through the specifics is to book a call
calendly.com/michael-rosmer?month=2021-03
@@OffshoreCitizen Thanks for the speedy reply. I'll seek out the video you mentioned above and will certainly consider booking a call if/when the "pipe dream" becomes somewhat closer to reality.
Brilliant info. Thanks.
Thanks!
You have to go to the finance office to get the NHR tax. At least that's what they told me. Also, it is better to speak to an accountant and let them do your taxes. You may need to review your information on this program and redo the program. Speak to the tax office in Portugal and to accountants. You need to say The following income is tax free in Portugal under the NHR program: 1) ......., 2).... Then say you will pay 10% tax on the following income: 1)....2) etc. etc. etc. Most people coming to Portugal are retirees! Start with, "If you are a retired investor with dividends and interests income the following applies: 1)...2)...Start with this is how it works for US, Australian, Canadian, etc. retired residents under the NHR! It sounds like you need to speak to a lawyer, too. Explain when the NHR changed and what that means for new people coming to Portugal. Talk about what the residents who applied before the NHR change last year. There are hundreds of thousands under the old system. People who got their NHR tax in Jan 2020 may be here checking to see if it is correct. See comments below from people who have already signed up for the NHR program.
Interesting video, thank you very much.
I'm a self-employed (online branding coach) from Canada. I was told by a Portuguese lawyer, a year ago, that I would qualify for the 10-year tax break. This has changed? Obrigada ~
You should qualify if you become a resident of Portugal. What that means for your taxes will depend on your structure.
@@MichaelRosmer, can you please clarify what you mean by structure? :)
You can be guided on how to trade bitcoin ahead of your arrival
Hello, I am Belgian and I work with 2 clients located outside Europe (Seychelles). Can I open an LLC in the United States in New Mexico for example, and get paid in dividends while having tax residence in Portugal and NRH status in order to benefit from 0% tax. Is this amount legal in my case?
Michael... responded to your email twice. I’d like to discuss Portugal. Thank you
Great I'll try to respond today.
If you have a taxed US Pension + Social security and US investments that their Dividends and Capital Gains are taxed in US, will you be taxed in Portugal too (none of the income is generated in Portugal)? What is the best EU residency visa so you can avoid becoming a Tax resident ( I would not want to establish a company or work in EU or remotely work from EU)?
Croatia potentially has a zero tax situation for digital nomads, but the US will still tax US citizens anywhere.
Hey Michael, just came across this video of yours as my wife and I are looking at relocating to Portugal from Canada. We will be keeping all accounts open in Canada as I receive my pension from Veterans Affairs.
My main question is: I understand you said pensions are taxed at 10%. If I have my pension deposited to my BMO account in Canada and tax removed there does this tax amount still apply in Portugal? I was going to deposit it in Canada and then just transfer whatever I need to a prepaid credit card or to a Portuguese bank whenever I need funds.
im a bit confused regarding the cbi program of portugal. j other video in youtube it said that after buying a approved property in portugal and hold for 5 years then you can apply for a citizenship and the processing time is more than 6months after applying for it. but you said in this video that it would take 10years.
No I didn't say the 10 years is to get citizenship, I said 10 years is the duration of the non habitual resident tax status. Citizenship is basically 6 years.
I heard somewhere that royalties are only exempt from one source. I.e. if you have royalties coming from USA, Germany, Australia or whatever, you have to pick one. Is that true?
Great video! I'm Portuguese and I'm going to need some help
Sure reach out and book a call happy to assist
calendly.com/michael-rosmer/offshore-citizen-30-min?back=1&month=2021-03
@@OffshoreCitizen hey, i ve added a comment recently can you check that? Pls
Great info! Musician/recording artist here moving to Portugal later this year. Partner/husband & I have a CA partnership, total earnings based on global royalties. Would we qualify for NHR, should we restructure our business to facilitate lower taxes? Thanks, subscribed!
You probably could qualify this being said depending where the payments are coming from you might want to be careful how you structure yourself to get the best optimization. Feel free to reach out to discuss.
Good morning, by joining the NHR tax regime, is it possible to enjoy the exemption of capital gain from financial capital gains (trading) as a physicalperson by operating with a broker outside the Portuguese territory? or is it necessary to open a company in another country to trade, as in panama-type territorial tax states ..? Thanks so much, great videos !!
If you make no income and have money in a US Bank why should you have to pay any tax to live in Portugal?
Thanks for posting this video, it's so helpful! Do you have knowledge of setting up a company in Ireland and getting paid dividends with NHR status? Would this be tax exempt? Also, in a situation like this what rate of social security does a Portuguese resident pay? At the moment I am a freelancer and the rate is 21.4 which seems quite high. Thank you!
Dividends from an Irish company would be tax exempt. Whether the company would need to pay Portuguese tax is another question. There are no social securities payable on dividends.
@@MichaelRosmer Great thanks
Another good video! What about trading stocks/options in US? I thought it could mean 28% tax.
28% tax on the US side or Portuguese side?
How is option trading taxed?
Question: will Americans who are on SS pension, which is already taxed by the US, be taxed an additional 10% if they move to Portugal? If the answer is yes, why is that not considered double taxation? Thanks, AG
It is yes and it is double taxation but you should be able to claim a tax credit for foreign taxes paid to eliminate that
Hey Michael, any idea if a revenue share program would be considered "passive income" and be tax free under the NHR?
Can you make an updated video on this given the new 2022 Digital Nomad Visa for Portugal. Thanks!
Hi Michael, very good video. I have a question. If i get the residence permit in Portugal with the D7 and i have a SRL in Romania that pays 3% tax gross income, what tax i have to pay if i pay myself with dividends lets say 3 times per year to a Portuguese bank account, do i pay only the tax income in Portugal?
So this is a great question because Romania can be a great place to use for Portuguese tax planning.
It's worth noting that you can often get away with all kinds of things but I don't advise it, I advise planning properly so you don't have any concerns.
So the first thing to recognize is that technically if you are managing and controlling that company from Portugal that is a Portuguese company under the tax treaty.
Second, if you're the only employee and you're doing all the work of the business from Portugal that's Portuguese source income. You constitute a permanent establishment of the company within Portugal.
So in those scenarios you don't gain anything by having a coolant really anywhere.
If in the other hand you can have management and substance of the company in Romania or at least not in Portugal then it can be a very good way to benefit.
But in that scenario you could actually benefit more than described here.
First, yes in that scenario you could defer the company income but you could also qualify for the NHR and pay zero tax on the dividends, which is very efficient.
@@MichaelRosmer Thanks for the answer! Aha, so in that case without substance in Romania and without being 100% sure about to qualify for the NHR, it could be better to get a residence there, right? I didn't see any video about a Romanian residence permit for Non-EU. What do you think about that option, hard to get it? I had been there even 3 months in a row and i loved so for that side i am all in.
@@iwasthere01 yeah Romania isn't bad if you can go live there. I haven't created any videos on their residency programs yet.
@@MichaelRosmer Waiting for it!
Please could you answer this question for me? I'm 62 and live in the UK and would like to move to Portugal. I don't work and don't plan to work, the money I have to live on is from a house sale, I plan to use this money to live on in Portugal, the rest of it I will invest in gold and silver. My question is if this investment goes up massively in the future will I be taxed on this profit? Also do I go for a retirement visa or a D7 visa? Retirement age in the UK is 66 years old. Thank you.
D7 has nothing to do with age only with proving passive income up support you.
As far as being taxed it depends on the type of income. Generally it will be taxed somewhere though.
@@MichaelRosmer Thank you Michael for answering my questions.
If you're a US citizen living in Portugal and get your income from dividends from your stock portfolio with Schwab for example, how are those dividends taxed in Portugal?
Interesting analysis! What about dividends from a non-resident owned LTD with a US LLC as a branch? In this case, the LTD would be a holding company doing investments
Depends where the Ltd is based. The dividends could be tax free if it's in the right location but be aware you've also got to worry about management and control and source income rules
@@MichaelRosmer Yes management/control is probably the reason I won't choose this NHR setup. Thanks!
@@NomadicJulien yeah it makes sense if you've got enough scale because you can have a foreign director. If you don't have enough scale it doesn't make sense
Thank you Michael! So as a US citizen is there any other option besides puerto rico to get very low or 0%? (besides renouncing & the limited $ amount of 110k with FEIE)? Is there anything worthwhile for US citizens with NHR Portugal?; Cap gains, corporate, dividends, ect? Any videos that might explain alternative Puerto Rico tax options further? THANKS!!!
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If i understand correctly based on your guidelines, if one setup an offshore company after moving to portugal, in order to pay himself in dividends, it would look like he is trying to avoid taxes and would be considered as portugal income or so (high tax). Is there a way of doing so after moving in such a manner that would be ok?.
What if im employed in my home country, getting regular salary after taxes, allowed me to work remotely abroad and i would like to stay in portugal. My position is IT-related with income that meets the financial capacity as a temporary resident. But i am an employe and therefore a dependent IT worker. My country does not have a double tax treaty with portugal
If you're not resident in your home country you shouldn't be taxable there so you should be able to get those taxes back or at least the foreign taxes credited but it depends on the country.
Best is to book a call to go over specifics
calendly.com/michael-rosmer?month=2021-03
I’m in a similar situation. What if the home country is the U.S.?
This looked great until I saw Australia doesn't have a DTA with Portugal :( What a surprise! Thanks for the video though Michael.
There are often ways to structure so that doesn't matter so be sure you need one before you write it off, then make sure you can't structure indirectly to achieve the same before you write it off as a possibility.
@@MichaelRosmer thanks Michael. Biggest thing for me is the management & control/PE rules. Hungary is seeming to be the best option for me until I have enough for any of the Bulgarian programs (or can just live there after 5 years of getting long-term residency status in Hungary if that's still what I'd want). Do you have much experience with the Hungarian residency through Kft formation with no employees? Not sure about the business plan - don't really want to pay 10,000 euros to someone there to help and get it rejected out of hand.
Can TH-camrs / bloggers qualify for the NHR? 😉
Can they qualify for sure. The question is what kind of tax rates can they optimize for and that will be 20% on the high end down to as low as maybe 3% if they can structure it right through a corporate structure so that's where careful and proper planning is worthwhile.
I am curious about social tax, thats something I got very surprised by because Its incredibly high unless you are employed from a portugal company (from my understanding) but otherwise it seems to be 30% of social tax which is huge. I cant find too much info about social tax, is there anyone who dont have to pay social tax, if you tax in your own country while living in country thats fine. But other than that is social tax always a must, the whole 0% tax thing seems to be a bit of a scam if you have to pay 30% social tax.
I think you're referring to social contributions on wages or what are sometimes called payroll source deductions.
If that's what you're referring to, they don't apply on dividends or investment income so we enter into the question of what your income source is.
@@MichaelRosmer I believe she’s referring to Social Security (Segurança social) contributions. These are super high, and based as a percentage of your income. So even if you’re only paying 20% income tax under NHR, you will likely end up paying an extra 15-30% on top of that, meaning you’ll pay similar or more than living in another European country without an equivalent regime to NHR.
@@Bcbweb yeah that's why I mentioned you don't pay social contributions on dividends or investment income.
Please note though the other EU nations typically have those socials as well ON TOP OF higher income tax. As a percentage of the gross salary what workers take home tends to be quite low, even worse if you look at what it costs the employer.
@@MichaelRosmer Agreed that it's absurd, and the public healthcare is not good quality in Portugal, plus their sovereign debt is enormous. However, you're likely to end up paying more tax in Portugal even with the special NHR rate than you would in other EU nations (I've lived in the UK, Spain, and Portugal), unless, like you say, most of your income comes from a pension or dividends/investments
@@MichaelRosmer I thought that under NHR the social security tax is only 3.5% for the first 10 years. That seems much better than the 15-30% mentioned here.
Hi there thanks for the video
I my wife and I have us passports we have 2 kids. She has EU passport we have temporary residency. We have no income/business in Portugal. We come every 6 months to satisfy our residency requirements. Is my tax liability 0?
Good info, thanks. How about Google Adsense or Apple AppStore income ? Is it possible to get 0 tax with that income ?
If structured properly yes
Feel free to book a call to discuss if you'd like to discuss for you www.clarity.fm/michaelrosmer
If you are a US citizen living abroad and you receive dividends that are effectively taxed below 20%, won't you always have to pay the difference anyway to the I R S when you file your return (20% - % you paid)?
Yes that's correct as an American you don't escape US tax unless you renounce, use a trust structure or move to Puerto Rico
@@OffshoreCitizen hi thank you not only escape but even pay less than 20% really for qual div rates you receive from a foreign company isnt that right, so even if u live in a low tax jurisdiction u are kind of stuck at 20% div tax rate until you do one of the things u suggest i believe is that right
hey. can you create a video on how to declare income for tax purposes in Portugal. I have recently moved to Portugal, and work freelance. My income comes from other countries, but I am a resident in Portugal. I am trying to find information online, but I am struggling due to the language barrier.
Don't you have an accountant?
Michael Rosmer no I don’t. When I’ve lived in other counties, for E.g.: U.K. I’ve been able to complete an online form which is fairly easy and declared income for tax purposes.
@@nadiaakhtar7203 In Portugal, you're going to need an accountant...
please respond to my polite query: do international students in Portugal pay income taxes on their worldwide income or income from back home?
Yes, not such a great deal when you realize that your pension and S.S. could be taxed up to 40% after 10 years. That is not very attractive.
Hi Michael, thank you so much for this explanation. Great content. I'm in the UK, planing to move to Portugal where I'm from... I have a limited company in the UK and I was told that because I'm the only director of the company, when my tax residence changes, the company tax residence will have to change to Portugal as well. Meaning that it will have to pay taxes in Portugal (21% on the corporation tax + 23% on company social security) and that my salaries from the company would also be taxed in Portugal (11% social security plus the 20% IRS flat rate for NHR). Same for the dividends: because they would be considered dividends from a portuguese company I would be taxed 28% on the dividends. Is this information correct?
High level yes it is. It's somewhat more complex than this both in practice and theory but that's definitely the danger if you don't plan around it
Anyone has moved from Eu country (EU citizen) to Portugal and kept being self-employed as programmer (under his own name business in home country) and then paid tax only in home country (that has double tax avoidance treaty with Portugal) and then zero tax in Portugal?
Or it's not possible (at least by a law - perhaps in practice some people get away with that) and a person should move business to Portugal (under NHR or simplified tax etc.). Anyone who successfully applied for NHR under "Added value" profession to be self-employed?
Michael, first off, thank you for the great content! Question, my understanding is that UK capital gains are actually taxable at 28% rate in Portugal even under NHR scheme due to this type of income not being taxable in the UK for non-residents. This is obviously very confusing because you might have stocks from US, UK, Ireland, Singapore etc in your portfolio, how do you know which one are taxable in the Portugal under NHR and which ones are not? Do you know any source that would summarize nicely sort of saying "US cap gains and dividends are tax free, UK cap gains taxable but dividends tax free etc"
Thanks for the question.
Yes, so foreign sourced capital gains are tax exempt, the question is "what qualifies as foreign sourced?"
Property is obvious so that one isn't an issue. The issue is when you've got stocks in foreign companies, which often aren't considered foreign earnings.
There are some ways using corporate structures to plan around this if the volumes are high enough but in general you should assume the sale of shares are not necessarily foreign
I still have not heard what happens when you just earn money from outside of Portugal. All my clients are foreign and I don't think I'll ever work locally.
If you're under the NHR and you have a foreign company that's not operated likely it could be possible to avoid tax but the details really matter so you need to get into them.
@@OffshoreCitizen Assuming I move in, get NHR and set up a sole proprietor business and all my clients are from outside PT. Does that mean 0%? Or any business is taxed at a regular tax rate?
@@kiwus87 no, that would typically be taxable locally if you structure it that way but we need to get into the details.
The best if you'd like to go over the specifics of your situation and what might be possible for you is to book a call and we can go over it:
calendly.com/michael-rosmer/
Thanks for the great video. I am an American working remotely for an American US-based company and I was thinking of moving to Portugal. Do I have to pay income taxes to Portugal?
I'm somewhat depressed realising that the NHR is not all it's cracked up to be in my circumstances. I guess it might be Bulgaria after all!
I’m sorry to hear that . Why do you think it won’t apply to your circumstances?
Curious how you compare Portugal vs Greece in terms of living, taxation, etc.? Most prefer Portugal but Greece also looks interesting.
Well the main appeal of Portugal from a tax standpoint is the NHR. Greece isn't as good unless you're in a very high income bracket then you can get a flat €100k/yr. On the flip side Portugal isn't very good once you run out of the NHR.
I'd say most people prefer to live in Portugal than Greece but that's personal preference.
Hello, question for you: Is there a Portuguese virtual address assigned to you in this non-habitual tax regime?
Does it mean that I would not pay taxes on my Social Security pension for ten years because I would qualify under the Non Habitual Resident category? I've never lived in Portugal, so I should qualify, but do I still pay from year One?
No, pensions are taxed at 10%
I will be fully taxed by the US on both my SS payments AND my online work, so im NOT about to spend time in any other country that is going to try and tax me on that SAME income!......that would just be crazy!!....the fact i would be spending buckets of cash in their country IS my tax!....
Well that choice is up to you. The US tax system has credits for taxes paid abroad. Of course more people are renouncing now than ever
Hi. How about remote workers? I am in the US working full time for a US company planning to move to Portugal and keep working for this company remotely. As US citizens we are required to pay income taxes in the US which my employer in the US will keep withholding from my paycheck. I’ve heard that because of the tax treaty if I apply for NHR in Portugal I will pay zero taxes there? Is that correct?
Hi Michael, does it makes sense for Crypto investor, to take part in NHR program if I want to become resident of PG and make a sale of my holdings? Im from EU, Im asking because I dont know if it will it be considered foreign income under NHR or will it be considered general income with 20% tax? It is my only income.
Portugal doesn't tax crypto capital gains. That being said there are other factors to consider depending on where you're from.
Feel free to book a call if you'd like to discuss and work out what would be best for you
calendly.com/michael-rosmer/offshore-citizen-30-min?back=1&month=2021-03
@@MichaelRosmer Hi Michael. The rule that Portugal doesn't tax crypto is not so clear. It actually might tax, depending on the amount. It is very risky. I've been having meetings with top law firm here and they told me that if you cash out a bigger amount, the tax man might decide that it is not a hobby but a professional activity and tax within normal IRS brackets, which are huge
Does the 10% pension income for the Portugal NHR program apply only to private pensions, or also state pensions too (coming from another EU country).
How would this apply if you’re a remote working making earned income from a U.S. Company?
What if US LLC (single member) goes S-corp and pays owner as w2/paycheck?
By default a single member LLC is treated the same as an S corp so do you mean switch to c corp?
If you get paid as an employee you'll pay tax. The question is how much, which depends on a variety of factors. Usually that's not the best way to go.
Feel free to book a call to discuss if you'd like to go over what might work best for you
Www.clarity.fm/michaelrosmer
If I have a individual micro-company in Brazil (Brazil has a tax treaty with Portugal) and can earn up to around 15k euro/year tax free, will that money be taxed in Portugal? Also, if I have a client from Canada and get paid as a freelancer, will I have to pay taxes in Portugal? How do I know if this payment was already taxed in Canada?
Do you have any advice on someone who used to run a sole proprietorship in the UK with mainly UK clients, moves to Portugal and operates in the same manner with the same clients? Is there a way to qualify for the NHR? I need to get the application done my end of month so would appreciate some input. I will book a call with you.
You can qualify for the NHR for sure though it's probably not the most tax efficient. Usually best if you can operate through a foreign company
Really insightful video the issue I've heard mixed messages on is the yearly amount of days you need to spend in Portugal to qualify for the NHR benefits. Some say over 183 days other say less. Would be interesting to get your take on this? Also you mentioned dividends in HK and the fact they'd be liable for 20% in Portugal... Would it be the same if you paid yourself a director's fee from a HK company, which is subject to salaries tax in HK?
There's some confusions here.
Taking advantage of the NHR isn't about a number of days in the country. The NHR has nothing to do with number if days in the country it has to do with treatment based on tax residency in Portugal. If you're not tax resident it doesn't benefit you.
Now, to maintain residency there depends on the visa you're under. Golden visa for example requires almost no time and D7 requires well over half the year though you can get away with spending a bunch of that time in other Schengen countries.
Now, this raises the other point, which is you could still be taxable in another country so you've got to separate those two things.
Now, as for HK it's not that the dividends will be taxed at 20% it's that it will trigger the CFC rules where all your share of the profits of the company will be taxable at a penalty rate, which is much worse than taxing dividends.
Directors fees paid will typically be taxable in Portugal as earned income and could risk the foreign company being taxed as a Portuguese resident company so...
@@MichaelRosmer Thanks Michael, I may reach out to you via your website or on Clarity for some further consultancy depending on how my situation unfolds
Hi, great informative video
Myself and my wife currently reside in the UK
I have retired but do not receive my state pension, however I do live on the rental income from numerous properties
My wife works as an employee, either remotely or within the office.
We are interested in knowing if by renting a property in Portugal it would enable us to qualify for the 10 year 0%tax incentives that Portugal are offering ? Be it on Income (rent), capital gains or inheritance tax ? Would we no longer pay any tax in the uk ?
Would this also allow us to have unrestricted travel to other EU Countries ?
Cheers
H
Very informative video.
I am a software engineer. Originally I'm an Israeli citizen and lately I got my português citizenship. I consider move my life to Portugal in order to live and/or avoid taxes. I have a US LLC in Wyoming, it is an online business that gives worldwide online service (portugal and US are not between the clients). I am operating the business online. I would like to get the company's incomes while paying 0% taxes. Is there a way to do it? What are the step? Apply to NHR? How should i define my self? How should I get the money from the company to my account in portugal, as a salary? dividends?
pay the man his money honey this kinds info is gold
Great content! I cannot find an answer anywhere in the internet. Hypothetically.. as a individual with EU passport and no job or other income but the one from crypto staking, will I be able to cash out big amounts of crypto in Portugal tax free? Or they will consider me as a professional trader since this is the only income I have, I will not trade daily, maybe cash out once a month, or once every 3 months, will they still impose tax on me in that case?
What about freelancers working on overseas projects? Especially IT ones (e.g consultant or developer) - it is 20 percent or 0 or full tax ?
Hi, interesting video, thanks for sharing it. If you live in EU country (for example Spain) and you trade stocks and crypto. Is it possible to set up a company in Portugal for just capital gains and pay zero tax that this company generated living and trading in other EU country?
Set up in Portugal? No, Portugal is a terrible place to have a company. You could set up abroad though in some other country but you've got to make sure you follow all the corporate residency and source income rules.
Do you know if VA disability and SSDI are taxes under the 10%? I believe my VA is tax free in the United States
I believe so but haven't ever had that question. It should be though.
If you have UK property assets producing income, would this be taxed at 0% under NHR?
if i move to Portugal under the NHR regime and work remotely for a UK company, will I pay taxes in the UK and be exempt in Portugal?
HI, Thank you for the great content and videos ! i hold dual citizenship (USA/FRANCE) , Currently living and operating an online business in USA. What is the best option (taxes) when it comes to moving to Portugal ? Moving as French (EU citizen) or as US citizen ? I will be operating the business online from Portugal and all customers / revenue remains in USA.
Hi, Kamel! Thank you for the comment!
Since your situation is very specific, it would be best to book a call calendly.com/michael-rosmer and we'll be able to talk about all of the options, in detail
This is soooo confusing, I'm a US citizen and plan on retiring in Portugal. I have rental real estate in the states which is in an LLC and other investment income. Will I qualify for the NHR reduced taxes? I have a management company for the property so I am not actively managing.
In Portugal probably yes but as a US citizen the US will still tax you unless you renounce.
or do the Puerto Rico act 60 decree. Geo tax service expedites it.
I dont get it. so i am a self employed IT specialist. My company is registered in Poland. So if I move to Portugal and get a visa I will still have to pay taxes in Poland but not in Portugal. But if I register my company in Portugal. and perform services and earn money from polish company I will pay 0% tax?
If you're the only person in the company and you're running the company from Portugal, sitting in Portugal doing the work then generally you'll be taxable in Portugal.
To get into further planning details it's best to book a call with us
Are Canadian dividends on Portugal's blacklist? What about capital gains?
I like your video can you do a video on treaties shopping.. like to see your thoughts
Sure, will do!
@@OffshoreCitizen I just passed my tax exams and now I am a tax advisor but your videos was a help, ie tax Havens Delaware ect.. I want to learn more about taxation of gas and oil.. that what I am doing now
@@thomaswalmsley4532 good for you that's awesome.
Oil and gas is its own beast depending on where you are in the world because source income is very clear, there's often special tax rules in certain parts of the world due to royalties etc. But then there can be tax credits or special structures for things like exploration and then lots you can do rough depreciation etc.
@@MichaelRosmer I am based in Frankfurt as I seen in one other videos talking about our CFC rules.. I like to go America Texas looking at the moment, but with Oil and Gas I know very very little.. I know the EU tax world better also import rules manually to UCC Union customs code.. I understand both U.K. Germany tax system better. Looking at American but Big 4 things online .. they give a very very good overview.. but need to understand America tax legislation
@@thomaswalmsley4532 lots to learn and understand just in US domestic, heck a person can specialize in just particular areas of US domestic.
I have a question, if i move to portugal under NHR, and i get paid in crypto from abroad (lets say i invoice a company in Dubai for my services). Do i pay 0% o 20%?
I'm from Germany and plan to trade Options on US markets for a living while emigrating to Portugal.
How and where would i bei taxed?
First it's a really good topic that you've addressed in this video albeit hard to follow many times. As a US/EU dual citizen investor receiving dividends and capital gains from the US, is this taxable in Portugal? I believe that you've stated that cap gains and dividends from foreign sources are tax free.
Yeah foreign investment income is generally tax free under the NHR unless it comes from a blacklist country.
@@MichaelRosmer Thx. What about dividends or cap gains earned in Croatia? My understanding is that it's not taxed.
@@cornelpod2068 that's correct
@@MichaelRosmer Thx! Your videos have a lot of useful and valuable info!
What if you use a non-trading UK company owned by a trust, that would still be legitimate dividend not?
I'm an italian citizen living in the US planning on moving to portugal to live there and not work. My only source of income will be from trading crypto and investments. Will I qualify for no tax residence?
You can qualify for the NHR, but whether you'll be taxed or not depends on many factors.
When it comes to crypto - if you just hold and sell, no tax is applied (that's the case with any currency fluctuation); crypto trading could be recognized as proffesional trading and therefore - be taxed.
Investmets are a whole other thing, and again can vary from one situation to another.
It would be best to book a call if you want me to look into your specific situation calendly.com/michael-rosmer?month=2021-03
To get the tax advantages, does the money have to come from Portugal or does it also work when the money comes from outside of Portugal (other European country)?
Depends on the advantage but usually it needs to come from outside of Portugal