Tax-efficient alternative residency options – The Portugal News


Of these, interest and investment in alternative residency and citizenship options among the affluent (HNWI) has reached an all-time high. There is also a growing class of remote workers who are no longer tied to working from a specific geographic location.

There are many good personal or professional reasons for this change in attitude. Wealthy families have become globalized, with many younger members choosing to study or live and work abroad. Alternative residency and citizenship are seen as a safeguard against restrictions on the free movement of people and capital, and an effective way to achieve geographic and economic diversification.

In the wake of the global lockdown, it’s no surprise that investors are focusing on sustainability for themselves and their families. If these people have money to invest, it makes sense to do so in countries that will grant them official status in return, and there are a growing number of countries that seek to encourage immigration either by granting residency which can lead to citizenship – often known as “golden visas” – or by granting citizenship itself in exchange for an investment.

Residency-by-investment programs provide the opportunity to legally acquire a new place of residence quickly and easily and with minimal disruption to your life. The main drivers for investors are usually mobility, security, quality of life, health and education, as well as tax, retirement and estate planning.

With the geopolitical outlook for 2022 so uncertain, the need for additional residency options – and potentially citizenship – is increasingly recognized as an indispensable asset to maintain optionality and access rights.

There has also been a seismic shift in the way the world works, with remote and flexible working becoming the norm during the Covid pandemic. Once organizations learn how to effectively manage and motivate remote employees, it is likely that this type of employment will increase. And many countries are now trying to attract these “digital nomads” with programs inviting them to move abroad and work remotely.

Portugal has been the gold standard for ‘golden visas’ over the past decade: mild climate, relaxed and affordable lifestyle and investor visas that grant access to the whole of the European Union – all for as little as €280,000. It also offers the hugely popular Non-Habitual Residence in Portugal (NHR) scheme which, as many of you know, provides eligible applicants with substantial tax benefits for a period of 10 years. It’s a menu that has attracted thousands of investors worldwide.

Established in 1999, the Sovereign Consultoria office and its highly experienced client-focused team offer a full range of services to private and corporate clients to those intending or have already established residency in Portugal. However, we are receiving more inquiries from existing and potential clients asking in which alternative countries they can establish their residency and tax residency. Their reasoning is that because they are not or no longer eligible for the NHR, they intend to travel and/or work remotely, or split their time between two or more countries.

In such cases, it can be of great benefit to establish residency and tax residency in a country that offers eligible applicants special tax status and many additional benefits which, depending on the program selected, may include:

• No tax on foreign source income, unless paid to the country in question

• Reduced tax rates applicable to locally generated income

• Reduced or zero tax applicable to foreign source income, dividends, pension or rental income, interest and/or capital gains

• Preferential local corporate tax rates

• No inheritance tax or inheritance tax

• The application of numerous double taxation agreements

Citizens of the European Union (EU), the European Economic Area (EEA) as well as Switzerland can move directly to another EU country and – provided they are eligible – benefit tax-advantaged programs available for non-domiciles. If they wish to establish their tax residency outside the EU, they must ensure that they establish their legal residence in this country before taking advantage of these programs. This is also the case for all other nationalities who wish to establish their residence in a second or third country.

As a global organization with local offices and/or professional partners in most regions, the Sovereign Group is best placed to advise and assist individuals and families wishing to formulate and implement a residency strategy and of tax residence adapted to their personal needs. While we offer a wide range of residency, citizenship, and tax residency programs, countries that offer preferential tax rates for non-domiciled individuals establishing tax residency include, but are not limited to, the following :

Complete and tax-efficient solutions

The Sovereign will work closely with applicants at every stage of the planning and implementation process. When combined and managed correctly, the following Sovereign Group services will enable families to develop and implement a comprehensive, flexible and tax-efficient strategy:

• International residency and citizenship programs

• Tax residency

• Trusts and foundations

• Estate and estate planning

• International retirement plans

• Wealth management

• Corporate Structures and Banking

• International life and medical insurance.

If you have any questions or would like to discuss how you and your family could benefit from creating and implementing a strategy based on international residency, tax residency and citizenship, please contact serviceinfo@Sovereigngroup. com


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