More About the Algarve

Algarve Senior Living is proud to have collaborated with both International Living and Overseas Retirement Living, to assist both organisations in their extensive data compilation effort, which resulted in Portugal being named the 9th best country in the world in which to retire, and the Algarve the Best Place in the World to Retire (Retire Overseas Index 2014).

Please take a look at the following links to find out more about the region and what it offers:


Tax-free living in Europe

Portugal’s Non-Habitual Resident Law


Anyone who is nearing or at retirement age wants to protect his or her hard-earned pension.

Many want to do this in a safe country with a warm climate, friendly people and a great lifestyle.

Now one country has made it easy to do all the above.

Portugal, voted the world’s best golfing destination and Europe’s best beach destination by the World Travel Awards, has recently improved legislation aimed at attracting foreign residents and investors to the country. The Non-Habitual Resident (NHR) law allows qualifying individuals who have not been resident in Portugal during the previous five (5) years, to become resident in the country and receive a private pension or non-Portuguese income, tax-free for a period of ten (10) years. Foreign or non-Portuguese income is exempt from taxation if the country from which it is paid has the right to tax the payment (even if it does not). Qualifying individuals include EU/EEA/Swiss nationals and those who qualify based on special programs such as dependent employee, entrepreneurship, study, business investment or the Golden Visa.

The formal requirement for residency is either 183 days or possessing what could be deemed as an habitual (owned or rented) residence on the 31st December of the respective tax year. Exceptions to this exist, such as the Golden visa, which allows non-EU citizens to obtain residence by purchasing at least €500,000 of real estate.

Under the NHR law, a flat rate of 20%* (less than half the highest taxpayer rate of tax) will be levied on any income originating from Portuguese sources, work conducted in the country or foreign income not taxed or subject to taxes at source.

According to most double tax treaties (conventions) taxation of pension income occurs in the country where the person is resident. It thus follows that, under the NHR law, most foreign income will be tax-free. An important exception to the law involves pensions paid to anyone previously employed by the government, in that each government typically reserves the right to deduct tax at source that means that full exemption will not be possible. People who fall into this category can nonetheless offset or mitigate any tax due using the double taxation treatment between Portugal and the country of origin.

It will also be important to analyse each sub-category of assets, such as dividends, royalties, bank interest, etc. in order to ensure that maximum tax relief is obtained in each case. The use of a suitably qualified tax advisory professional is recommended and the typical investment of between €1,500 and €3,000 (depending on complexity of an individual’s financial affairs) is generally quickly recouped.

The process for eligible applicants (i.e. those who meet the prerequisites explained above) is simple: it involves registration with the local Finanças (or tax office) in order to obtain a tax number, indication of a place of residence (either proof of ownership or of a long-term rental contract) and a written request to the relevant government department. All applications must be submitted by the 31st of March of the year following that to which the application refers. Applications may take a few months to process so it is recommended that all eligible applicants submit their requests as soon as they have taken the decision to make the move, in order that the outcome is known if possible before the end of relevant tax years (not only in Portugal but in the country of origin).

The NHR law provides an excellent solution for pensioners as well as liberal professionals such as consultants, company directors, doctors, dentists, architects and engineers, and anyone promoting active investment in the country. Occupational pensions, as long as deemed not to be sourced in Portugal, are exempt under the NHR law.

The possibility of a tax-free pension, the absence of inheritance or gift tax, no wealth taxes (other than annual taxes on real estate), access to the state health system for residents and EU citizens, a lower cost of living than most of the EU-18, and the availability of quality and cost-effective private health, have earned Portugal the accolade of the "Best Place in the World to Retire” from the 2014 Overseas Retirement Index.

In addition to the traditional route involving the purchase of real estate, a rental-based solution for retirement and long-stays now also exists in the Algarve. Complete with medical, F&B and other relevant services, the solution caters for those looking to try-before-they-move, to enjoy winter stays in their destination of choice, and also affords NHR status to qualifying individuals who decide to spend the majority of their time in the country.

* From 2015 the 3.5% surcharge imposed on all personal income tax in Portugal, linked to the end of Portugal’s bail-out from the EU/ECB/IM, will be reduced. 

Fast-track entry to Portugal

The Portuguese Golden Visa program

The Golden Visa Programme launched by the Portuguese government in October 2012, but which only saw its first approved candidates in the second half of 2013, is a fast track method for foreign investors from non-EU countries to obtain an authorisation to reside in Portugal ("Golden Visa”).


To meet the conditions of the Golden Visa programme, applicants need to make an investment in one of three categories: real estate acquisition, investment or business/job creation, and meet general conditions as stipulated within the law.


This Golden Visa will allow the investor to enter and/or live in Portugal and to travel freely within most of the 26 countries within the Schengen space.


The Golden Visa aimed to attract and accelerate investment into Portugal at a time when the country needed to recapture the confidence of both investors and the foreign market. Although several Golden Visas exist within Europe, Portugal’s programme has earned a very favourable reputation due to the combination of low minimum stay requirements, the ease of aggregating direct family members to the main application and the balance between cost and benefit. With the closure of residency visa programmes in countries such as Canada, the Portugal Golden Visa programme has become not only the preferred European residency programme, but is staking a claim as one of the preferred options globally.


In general, all investors have to comply with the following requirements:

Bring funds from outside Portugal
Maintain investment for a minimum of 5 years
Not flagged up by either Portuguese Borders Agency or Schengen services
No criminal record
Entry into Portugal with a valid Schengen visa
Minimum stay in Portugal: 7 (seven) days during the first year and 14 (fourteen) days during each subsequent period of two years


Within each of the specific Golden visa routes, the following rules apply:


Real Estate

Minimum investment of €500,000 with no recourse to debt. Debt finance may be used for amounts in excess of €500,000
Any real estate type qualifies
Shared or co-ownership qualifies
May use for personal use or rent or lease for profit



Minimum investment of €1 million
Funds deposited in bank in Portugal or used for purchase of equities listed on the national stock exchange
Deposits may be released for other investments and a number of interesting possibilities exist with national financial institutions


Business and Job Creation

Creation of at least 10 jobs
Compliance with Social Security obligations
No minimum investment
No sector restrictions
Possibility of applying for EU and Portuguese grants


The Portuguese Golden Visa offers all successful applicants and the direct family members the right to enter, live and work in Portugal (even if resident elsewhere) and to travel within the Schengen space. With its minimal permanence requirements, the Golden Visa offers permanent residency after 5 years and citizenship after 6.