Moonshot Alert (PRO) #2 - Portugal 🌴
& how to optimize for quality of life
Happy Friday everyone!
Welcome to another Moonshot Alert.
These alerts are dedicated to finding 10X opportunities off the beaten path - in business, investing, and lifestyle design.
Yes, they’re about making money. For example, two weeks ago, I wrote a detailed report on Ethereum. It’s up 50% since.
But ultimately, the goal we’re going for is freedom - and quality of life.
doing whatever you want, wherever you want (e.g. swimming in the Mediterranean)
whenever you want (e.g. on a sunny Tuesday morning)
with whomever you want (e.g. with your friends, spouse, dog, children, etc.)
without anyone telling you where to be, what to wear, or what to do.
And what better place to enjoy life than sun-drenched Portugal.
Portugal is one of the easiest countries to move to in the world.
Anyone, no matter where they are from, can obtain residency in Portugal by simply meeting minimum financial requirements (which are really low).
The quality of life in Portugal is fantastic - and it’s cheap.
On top of that, you may be able to legally qualify for very attractive tax exemptions.
So if you’ve been wanting to spend a few months of the year (or the whole year!) in tax-free Paradise while sipping vinho de porto and eating freshly caught bacalhau for a fraction of what it would cost elsewhere - then Portugal is for you.
So let’s dive right into how exactly you can obtain residency in Portugal.
🏝️ Why should you care about Portugal?
Sea, cities & sun. Portugal has some of the most beautiful coastlines and charming cities in Europe. The weather is incredible.
The cost of living is low. Expect to spend 60% less in Porto than in any major Western metropolitan city.
Taxes are low - as low as 0% on income, capital gains, and investment/rental income (more this below)
The process to obtain residency is fast, easy, and cheap (you don’t need to invest anything in Portugal) - and is available to everyone.
After 5 years of residency, you’ll be able to qualify for a Portuguese passport - which is a fantastic travel document that allows you to live anywhere within the Schengen area.
If you’re not European it’s an easy, fast, affordable access to a low-tax, high quality of life, and a European passport a few years down the line.
If you’re European, it’s a Paradise by your doorstep with incredible weather, low taxes, low cost of living - all close to home.
⭐ Do you need to invest €300,000 into Portugal to qualify?
No, that is for the Golden visa program.
Qualifying for “regular” residency in Portugal versus qualifying under the Golden Visa Program is a distinctly different process - with different outcomes.
Under the Golden Visa program, you will need to invest roughly €280,000 (and pay €30,000 of fees) and you are required to spend less than two weeks per year in Portugal to maintain your residency.
On the other hand, qualifying for residency in Portugal under the traditional route will require that you live in Portugal for at least 4 months a year. But the process is practically free.
So if you’re ready to actually spend part of your year in (tax-free) sunny Portugal - get ready to be amazed.
🏖️ One visa to rule them all
Portugal’s Golden Visa program (which requires investment) attracts a lot of media attention to Portugal, but it’s really Portugal’s D7 Passive Income Visa that is the key to living a life of freedom in Portugal without breaking the bank.
You do not need to be retired to qualify. Any non-EU citizen who meets one of two financial requirements can qualify.
Typically, the visa is used by digital nomads, investors, online entrepreneurs, or those who work remotely.
But if you wanted to, the D7 visa also allows you to get a local job in Portugal.
So if you wanted to practice your Portuguese skills by working at a café, museum, etc., or simply wanted to find a full-time job in Portugal, those options will available to you as well.
👙 The 2 ways to qualify for the D7 Visa
[The following does not apply to EU citizens, who for now, do not need a visa to live in Portugal].
To qualify for the D7 visa in Portugal, you will need to prove to Portugal that you will not be a burden on its social system and that you can sustain yourself and your dependents financially.
There are two ways to prove this:
On the basis of recurring revenue
As of May 2021, the financial requirements for the D7 visa are based on the minimum wage in Portugal - which sits at €665 euros per month.
As a single applicant, you will need to prove that you have recurring income of at least the monthly minimum wage (€665/month) to apply.
If you want to include a spouse in your application, you will need to earn an additional 50% of the minimum wage (€332,5) for a total of €997,5 per month.
For dependent children under the age of 18, you will need to prove an additional 30% of the minimum wage for each child - €119,5.
As a result, a family of four who wishes to apply will need to prove at least €1,396.5 per month in income.
On the basis of personal savings
The second way to apply for the D7 visa is by proving you have at least 24 months of the local minimum wage in savings to sustain yourself.
As of May 2021, this amounts to €665*24 = €15,960.
Just as with the recurring revenue option, if you want to apply with a spouse, you will need to add 50% of the minimum wage over 24 months (€7,980), and each dependent child under the age of 18 will require 30% of the minimum wage over 24 months (€4,788).
As a result, a family of four will need to prove savings of at least €33,516 to apply.
🏄 The step-by-step application process
Applying for the Portuguese D7 visa is a relatively straightforward process.
You will need to submit your application at one of the Portuguese consulates close to where you live (here’s a full list).
Once submitted, the application takes between one and three months to be approved.
After approval, you will need to enter Portugal within 4 months - so make sure you apply roughly 5 months before you actually want to move to Portugal.
Here’s the full process:
Prepare the necessary documents proving either your recurring income or savings (in the form of bank statements, income reports, etc.)
Get a police background check from your home country (depending on where you are from, this can take a while - up to 10 weeks in the US, for example - so prepare accordingly).
Make an appointment at your local Portuguese consulate to apply for your visa (again - approximately 5 months before your desired departure date)
Book an appointment in Portugal with the Serviço de Estrangeiros e Fronteiras (SEF) - the service for foreigners in Portugal.
Fly to Portugal and meet with the SEF to pick up your visa.
⛵ Contact details of a local immigration lawyer
You could go through the entire process of applying for the D7 visa yourself.
If you do, you will find all the details you need right here (in Portuguese) and here.
However, if you don’t speak Portuguese, I generally recommend hiring a local lawyer on the ground.
This helps make sure you do everything by the book - and you won’t have to deal with filling out paperwork in Portuguese.
I don’t recommend this for just Portugal, by the way. I recommend always hiring local help from a seasoned law firm when you apply for residency or invest in a foreign country.
If you want to hire the services of a local, reputable, law firm, I recommend SRS Abogados. You can contact them directly on their website.
(I receive no compensation for this recommendation, by the way).
They can help you will all legal matters during your stay in Portugal - including applying for citizenship further down the line.
If you chose to go the do-it-yourself, there is a nominal government fee for the entire D7 visa application of roughly €130.
If you chose to hire a professional law firm like SRS Abogados, expect to pay roughly €3,000 for a single applicant, or €4,000 for a married couple.
📈 The Non-Habitual Tax Regime - how to live tax-free in Portugal
Portugal offers incredible tax incentives to some foreign residents.
If you have not been a resident of Portugal in the last five years, you could potentially qualify for the Non-Habitual Tax regime, whereby:
your pension income tax is reduced to a flat 10%
your worldwide employment and self-employment income is taxed at a reduced flat rate of 20% if no tax treaty exists with the country of origin of the income OR is entirely tax-free IF Portugal has a tax treaty with the country
rental income, capital gains, dividends, interests, and royalties are tax-free if Portugal has a tax treaty with the source country
The tax benefits are available for ten years.
Portugal has 71 tax treaties with other countries - and the rules change quite regularly.
To see whether you qualify, and what part of your income will be taxed at a reduced rate, I recommend contacting the law firm SRS Abogados.
⚖️ Getting a European passport
After 5 years of residency in Portugal, you will qualify for Portuguese citizenship.
A Portuguese passport is a great travel document and allows you to live, work and travel visa-free in the entire Schengen area.
A passport is a gift that keeps giving. Your children, and their children, and all of your descendants will benefit from it too.
Being able to live, work and travel freely to another county is not only the ultimate insurance - a Plan B in case something were to happen in your home country - but also an incredible opportunity to see and discover more of the world.
And even if you are European, I still recommend getting a second passport - including a Portuguese one.
Whether the European Union still exists in its current form in 10 years is up to much debate. I don’t have the answer obviously, but I see no downside in hedging my bets.
To acquire Portuguese citizenship, you will need to pass a basic Portuguese language test (which is not difficult).
If you want to learn some Portuguese, I recommend getting the Michel Tomas course - it’s what I use to learn languages quickly.
When you are ready to apply, get in touch with the law firm recommended above, and start your process of becoming a Portuguese citizen.
🎙️ Date of our next Q&A call
Our next Q&A call will be held on Wednesday, May 19th at 6 pm Central European Time (Paris time).
To join the call, simply click this link.
Please submit your questions in advance in the comments section below (on the website) so that I can address as many of them as possible.
There will of course be time for live questions as well.
I look forward to speaking to you all on Wednesday.
To your freedom,
Hello Alex, Can you please answer my last question regarding saving from crypto. is it acceptable and considered as saving. and what about crypto asset, will it be considered as source of income as well.