The Portugal D2 Visa allows entrepreneurs, freelancers, and independent service providers to reside in Portugal. The Portuguese government started this visa in order to raise external resources and investments to grow the Portuguese economy. This visa only applies to non-EU/EEA/Swiss citizens who wish to start a business or relocate their existing business to Portugal. You can also choose to invest in an existing business in Portugal. The Portugal D2 Visa is less known than the D7 Visa and the Golden Visa but can be a viable route to permanent residency and citizenship for those looking to work for themselves in Portugal.
Guide to Portugal Visas
If you are an entrepreneur, freelancer, or independent service provider from outside the EU/EEA/Switzerland looking to reside in Portugal, you might be eligible for a Portugal D2 Visa. You must show that you either have set up a company operating in Portuguese territory or that you have the financial resources in Portugal that demonstrate you can set up a company in Portugal. You can obtain these financial resources through a proof of loan from a Portuguese bank. There is no official amount that you need, but the recommended amount is at least €5,000.
You will also need to show that you have enough money to sustain yourself. For yourself as the main applicant, you must have 100% of the minimum salary which is €8,460 per year. For a spouse, you must add 50% to this (€4,230) and for a dependent child, you must add 30% to this (€2,538). Therefore, for a couple with one child, you would need around €15,300 a year to be eligible for the D2 visa.
Applicants must also produce a solid business plan that will be reviewed for its social, economic, and cultural impact. This plan should prove that your business will thrive and lead to economic growth.
Lastly, applicants must explain in their application why they have chosen Portugal as their business location. Rather than just focusing on the cost of living and climate, essentially why the country would be positive for you, also focus on how your company will impact Portugal and satisfy the needs of the population. It might be that you will be creating multiple jobs in Portugal or solving a particular issue that has not yet been addressed in the country.
1. Visa Exemption
The Portugal D2 Visa allows you to enter Portugal and the Schengen area (26 EU countries). You can circulate freely without a visa. The D2 visa essentially grants you the travel rights of all European Union citizens. This is perfect for entrepreneurs who want to travel through Europe to network and build corporate connections.
2. Family Perks
You don’t need to leave your family behind with the D2 Visa. This visa allows for family reunification where your family members are granted the same residency rights as you. This means that a partner, children under 18, dependent children over 18 that are studying, parents, and minor siblings. From getting permanent residence to tax incentives, family reunification grants all the same rights to your family. You will have to prove your relationship to any family members included in the program.
3. Permanent Residence: Does the Portugal D2 Visa Lead to Residence?
Yes! Right after receiving your D2 Visa, you have to book an appointment with the Foreigners and Borders Service (SEF) to obtain a residency permit. Your D2 Visa is only valid for 120 days, but if you carry proof that you have booked this appointment, you are good to go. You will renew your residency until the 5-year mark when you can apply for permanent residency.
4. Citizenship: Does the Portugal D2 Visa Lead to Citizenship?
You can become a Portuguese citizen after 5 years of legal residency. To do so, you need to learn Portuguese and obtain an A2 Portuguese language certificate, have a clean criminal record, and provide documents such as proof of a Portuguese bank account.
5. Tax Incentives: Non-Habitual Tax Regime
With a Portugal Golden Visa, Portugal D7 Visa, and Portugal D2 Visa, you can become a non-habitual resident (NHR) and enjoy the incentives of this fiscal regime. This tax regime allows you to transfer your tax residency to the country. To be eligible, you cannot have been taxed in Portugal during the five years before the application. However, this does not apply to corporate tax.
Here are the benefits of this tax regime:
- You can be eligible to not pay ANY tax on pensions, rental income, real estate gains, and income from non-Portuguese sources if your country has a Double Taxation Agreement (DTA) with Portugal. You would instead pay taxes in your country of origin. The UK, USA, and many more countries have a DTA with Portugal where this is the case.
- If your pension income is taxed in Portugal, it will be at a flat rate of 10%, including retirement savings and insurance.
- Income from “high value-added activities” in Portugal is taxed at 20%. This includes employment and self-employment income from activities of scientific, artistic, or technical character performed in Portugal. Still, you will pay the same income tax as ordinary tax residents for other types of domestic income.
- You will only be taxed on your worldwide income after the first 10 years of residence.
- Foreign interest, dividends, rents, and property capital gains can be exempted from taxation.
- You will not pay an inheritance or wealth tax.
Corporate Tax & Social Security Tax in Portugal
HOWEVER, this will apply to you as a resident, but not a registered company and you will have to pay the regular corporate tax (IRC) in Portugal. The corporate tax in the Portuguese mainland is 21%, while the first €25,000 of taxable profit for small and medium-sized companies is taxed at 17%. The corporate tax rate is lower for Madeira (20%) and the Azores (16.8%). You will also need to pay the social security tax (TSU) for your employees when you pay their salary. Companies pay 23.75% TSU for each monthly wage, while an extra 11% comes directly from the employee’s salary. Therefore, for a €2,000 monthly salary, your company will pay €475 a month for social security, while the employee will pay €220.
Non-EU/EEA/Swiss entrepreneurs, freelancers, and independent services providers can apply for a Portugal D2 Visa. An applicant must show that they either have set up a company operating in Portuguese territory or that they have the financial resources in Portugal that demonstrate they can set up a company in Portugal.
Life After Brexit: Why Should UK Nationals Apply for a Portugal D2 Visa?
UK entrepreneurs who can longer access the European market are in luck with the Portugal D2 Visa. You can apply for permanent residence after 5 years and citizenship after 5 years, effectively gaining back the rights lost after Brexit. From traveling through the Schengen area and being able to reside and work in any EU country, the D2 Visa will make your post-Brexit life much easier.
Many crypto traders are making use of Portuguese residency visas such as the Portugal D2 Visa due to the crypto laws in Portugal, or lack thereof. Portugal is a crypto tax haven, one of the last ones in Europe. While in countries like the US, anyone who sells cryptocurrency must pay a capital gains tax of up to 37%, this is nonexistent in Portugal. Moving to Portugal signified maximizing your crypto gains with 0 percent taxation. You will pay zero capital gains tax and income tax, as well as no VAT on crypto when exchanging it to fiat currency. While many were unsure about these regulations, the Portuguese Tax & Customs Authority (PTA) officially announced in 2019 that buying or selling cryptocurrency in Portugal is tax-free. This is because crypto is viewed as a form of payment, rather than an asset. However, businesses that provide services related to cryptocurrency are taxed on their gains between 28% and 25%. If you trade crypto as your primary income source, as your main profession, you will also need to pay this tax. It can get quite tricky to determine whether this is the case so be sure to contact a tax advisor in Portugal. A professional will look at your profit and frequency of trade to determine if this is the case.
Take a look at our guide to cryptocurrency in Portugal here.
When applying for the D2 Visa, you will need to purchase health insurance for your stay in Portugal. Once you become a resident, you can access the Public Health Care System (SNS) without insurance by registering with your local health care center. Established in 1979, all Portuguese citizens and foreign residents have access to the SNS and it is mostly free. It has improved massively in the last decade, making the 13th spot for the best healthcare in Europe in 2018 under the Euro Health Consumer Index. Almost all services are free in the SNS, but you might still need to pay for specific exams, no more than €5 to €20. However, children under 18 and those over 65 do not pay any fees, as all services are completely free. From maternity care to psychiatric care, the SNS provides a wide range of services.
You can also choose to purchase private insurance and access the private system. Health insurance prices range from €300 to €1,000 a year, depending on the company and other personal factors such as your age. The SNS does not offer dental care so having private insurance could be beneficial.