It now looks like both existing expat residents as well as those on the cusp of making the move will continue to enjoy the NHR’s tax-free pension income status as well as tax-free interest, tax-free non-resident dividends and tax-free royalties; it is worth noting that the latter of these things is of particular interest to high profile expat entertainers and musicians such as Madonna, Monica Belluci and Eric Cantona.
So, as 2018 moves swiftly on, expats can feel reassured that they will continue to enjoy ten years of the following benefits from the NHR scheme:
- No minimum investment requirement
- Tax-free royalties, interest and dividends
- Tax-free lump sum or regular income pensions
- 20% flat rate tax on high value activity
Keeping Portugal appealing for expats
The apparent about-face regarding the NHR regime means that Portugal remains the leader when it comes to favourable wealth management and residency planning jurisdictions. It also means that the country has every reasonable expectation of again finishing at the top of the pile of an exhaustive list of the most desirable countries in the world to migrate to, following on from its success in topping a 2017 survey.
The survey, which was carried out for the third year in a row, was administered by Henley & Partners, a UK-based firm that specialises in fiduciary-based citizenship planning. It looked at the relative merits of various country’s immigration and residency programmes and then ranked them accordingly.
Although the Southern European archipelago of Malta outperformed all challengers when it came to the attractiveness of its investment schemes enabling citizenship in exchange for a minimum level of investment, Portugal’s golden visa scheme ensured it finished top of the list of countries which allow residence in exchange for investment.
Each country’s residency-by-investment attractiveness was based on scores out of 10 for the following categories:
- Lifestyle
- International standing
- Visa-free access
- Visa processing times
- Quality of visa processing service
- Financial and taxation requirements
- Bureaucratic and financial transparency
- Residency requirements
- Compliance
- Relocation flexibility
- Physical visit requirements
Portugal’s outstanding candidacy was founded on the strength of its Golden Residence Permit Program and earned a score of 79 out of 100, meaning it finished one point ahead of Austria and two points ahead of Belgium.
Those who currently enjoy the many benefits of expat life in Portugal are likely to agree with the findings of the survey while also taking enormous relief from the fact that the Portuguese government has appeared to accept that expat money is invaluable to the country’s economy and that every accommodation should be made to ensure the influx of expats is encouraged.
However, the alarm provoked by the proposed changes to the NHR programme should remind expats in the country of just how quickly things can change. Whatever happens, sound wealth management advice remains the best way to plan for a secure and prosperous financial future.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
More than four in ten retired British expats choose to live in Spain. This could be for various reasons, including Spain’s financial opportunities, family tradition, historical ties between the two countries, and, of course, the Spanish culture and climate.
There has recently been some worry over the future of the “triple-lock”, a measure put in place to help protect pensions in case of a steep rise in inflation (November 2015 saw inflation reach its highest level in two years).