Have anyone successfully leveraged Portugal NHR and paid 0% taxes?

[mikestachurski]

Hi

I was wondering if there is anyone in this group here who have moved to Portugal applied for NHR maybe have income rental (from property you own abroad), dividends income (from dividend paying stocks) and/or run a company via Estonia (e-residency) and have been able to pay 0% taxes at least on the rental income and dividend stocks?

Anyone?

 

[dlttrading]

good question. I also think NHR could be great if you structure it perfect. But in the end it sounds bit complicate. And from my personal view I dont want to deal with communist countries and their tax department.

But I think if you do it the right way you can have a lot of benefits like:
- living in mainland not shitty island
- unlimited support from local banks (not for offshore but for private use)
- very powerfull airport with a lot of intercontinental flights and european flights.
- cheap housing
- cheap mortgages to buy houses
- probably good for Airbnb rental of your apartment or house
- best surfing in Europe
- nice climate from hot mainland to cool atlantik breeze
- very safe country
- cheap electricity (9 cent in the night , 18 cent in the day )
- very friendly people


cons:
- mentality not very business oriented
- poor country
- poor - average quality of restaurants
- locals are more family focused which mean that it is not an individualistic society like USA, NL, CH, Skandinavia, etc.
- strange language what you only speak in PT, BR and some african countriess
- communist dictatorship past which you still feel that people are afraid of police and authorities ( they still have violent police)
- country is pressing out their own people while accepting NHR expats
- compared to other countries relatively low development

 

[mikestachurski]

good question. I also think NHR could be great if you structure it perfect. But in the end it sounds bit complicate. And from my personal view I dont want to deal with communist countries and their tax department.

But I think if you do it the right way you can have a lot of benefits like:
- living in mainland not shitty island
- unlimited support from local banks (not for offshore but for private use)
- very powerfull airport with a lot of intercontinental flights and european flights.
- cheap housing
- cheap mortgages to buy houses
- probably good for Airbnb rental of your apartment or house
- best surfing in Europe
- nice climate from hot mainland to cool atlantik breeze
- very safe country
- cheap electricity (9 cent in the night , 18 cent in the day )
- very friendly people


cons:
- mentality not very business oriented
- poor country
- poor - average quality of restaurants
- locals are more family focused which mean that it is not an individualistic society like USA, NL, CH, Skandinavia, etc.
- strange language what you only speak in PT, BR and some african countriess
- communist dictatorship past which you still feel that people are afraid of police and authorities ( they still have violent police)
- country is pressing out their own people while accepting NHR expats
- compared to other countries relatively low development

I agree with above and I am aware of pros and cons but what other choices you would recommend to someone with the family? Living in Dubai (on the desert where half a year you have to hide in the air con place or you will melt) is not a great alternative. Also I don't like the people there is all about showing off how rich I am and how poor are you.

 

[dlttrading]

I agree with above and I am aware of pros and cons but what other choices you would recommend to someone with the family? Living in Dubai (on the desert where half a year you have to hide in the air con place or you will melt) is not a great alternative. Also I don't like the people there is all about showing off how rich I am and how poor are you.

To be honest there is not much left I think. I am allways a fan of Cyprus. But the climate is to hot for me to live all year there.
So I would also probably give PT a try especially when you have wife and children. In the end it will be the best deal when you compare tax combined with cost of living and other benefits. And you are right. You can live low profile, comfortabel, safe in a healthy environment of rural tranditional village life. I think the safety combined with the healthy rural neighbourhood is the main USP of Portugal. The infrastructure is ok, lot of fiberglass internet, highways, four lane highways, working administration and authorities,

 

[mikestachurski]

To be honest there is not much left I think. I am allways a fan of Cyprus. But the climate is to hot for me to live all year there.
So I would also probably give PT a try especially when you have wife and children. In the end it will be the best deal when you compare tax combined with cost of living and other benefits. And you are right. You can live low profile, comfortabel, safe in a healthy environment of rural tranditional village life. I think the safety combined with the healthy rural neighbourhood is the main USP of Portugal. The infrastructure is ok, lot of fiberglass internet, highways, four lane highways, working administration and authorities,

If I could I would stay where I am now.... in Netherlands good schools, good infrastructure, centrally located, easy life but WEALTH TAX is a killer paying almost 2% every year to government just because you sit on the assets is a little bit unfair especially if you don't have cash flow to cover your tax obligations and the only way to pay for these tax bills is to sell a little bit of the assets you own.

 

[Silvio]

If I could I would stay where I am now.... in Netherlands good schools, good infrastructure, centrally located, easy life but WEALTH TAX is a killer paying almost 2% every year to government just because you sit on the assets is a little bit unfair especially if you don't have cash flow to cover your tax obligations and the only way to pay for these tax bills is to sell a little bit of the assets you own.

Holy s**t this is nuts. Dutch people don't really own real estate or investments.. they just rent them from the government

To the op: Apparently NHR is a bit of a trap since it's limited in time, and it must really be only passive income. Nice place to live I guess but why do it unless it gives you some added benefit (you desperately need a EU residency, or really want to live there and eventually get the PT passport).

 

[mikestachurski]

Holy s**t this is nuts. Dutch people don't really own real estate or investments.. they just rent them from the government

To the op: Apparently NHR is a bit of a trap since it's limited in time, and it must really be only passive income. Nice place to live I guess but why do it unless it gives you some added benefit (you desperately need a EU residency, or really want to live there and eventually get the PT passport).

I will be consulting with international tax expert re NHR to make sure that the set up is right so the tax authorities don't change their mind and suddenly start taxing my dividend income etc. I know PT is not perfect but I don't see to many alternatives... I am interested in Asia (but hard to convince my wife)

 

[Brutus]

Holy s**t this is nuts. Dutch people don't really own real estate or investments.. they just rent them from the government

To the op: Apparently NHR is a bit of a trap since it's limited in time, and it must really be only passive income. Nice place to live I guess but why do it unless it gives you some added benefit (you desperately need a EU residency, or really want to live there and eventually get the PT passport).

As far as I know the NHR scheme gives you tax benefits for the first 10 years only.

Also income generated outside of Portugal is tax free.
Correct me if I’m wrong

 

[mikestachurski]

As far as I know the NHR scheme gives you tax benefits for the first 10 years only.

Also income generated outside of Portugal is tax free.
Correct me if I’m wrong

Yes NHR is for 10 years re the second point 'income generated outside of Portugal is tax free' I think this is where the nuances starts to come into play.... that is why I am asking around as I don't believe it is so 'easy'

 

[backpacker]

I will be consulting with international tax expert re NHR to make sure that the set up is right so the tax authorities don't change their mind and suddenly start taxing my dividend income etc. I know PT is not perfect but I don't see to many alternatives... I am interested in Asia (but hard to convince my wife)

I fully understand your wife: Asia is not a good place to live with a family. May be Singapore, if you can afford it. Everything else is either a tax-hell or a corrupt third-world-country.

Why not look for something where you pay "a little bit of tax" and otherwise do have a relatively low cost basis. If you only receive dividends, bank interest and capital gains from occasional sale of securities, Bulgaria would fit into that. Capital gains from the disposal of EEA/EU traded securities are even tax exempt.
With regards to family life, check Plovdiv or Varna and its surroundings. Infrastructure is not perfect but when you concentrate on the two aforementioned regions it is acceptable. Even public transportation works smoothly. During the summer months vacation at the beach, during winter months you go skiing. All very close by.

 

[Barney2201]

Did you get any further re NHR? Also looking at best solution with family. Currently looking at Antigua but their digital nomad visa has seen a big influx so international school is full.

 

[mikestachurski]

Hi

Did you get any further re NHR? Also looking at best solution with family. Currently looking at Antigua but their digital nomad visa has seen a big influx so international school is full.

We are currently in Portugal for 3.5 weeks holiday exploring, looking at the properties, getting the feeling for the country. NHR is pretty straight forward there is plenty of 'experts' who can help you get it apply in your name, sort out the paper work and deal with the bureaucracy.

 

[Barney2201]

Have you found the sweet spot of where to live yet? We did a similar thing 2 years ago before moving to Guernsey. We now really need to move to a country which gives us 100% tax free as our business was decimated during COVID but is about to come back stronger than ever so need to hang on to as much profit as possible.... We really were not keen on the Algarve (very bucket & spade) best option seemed Cascais, Porto looks interesting.

 

[ilpablo]

Hi

We are currently in Portugal for 3.5 weeks holiday exploring, looking at the properties, getting the feeling for the country. NHR is pretty straight forward there is plenty of 'experts' who can help you get it apply in your name, sort out the paper work and deal with the bureaucracy.

The problem with NHR comes out when you own a foreign company (so you have to proper setup the structure in order to avoid any trouble)

 

[mikestachurski]

The problem with NHR comes out when you own a foreign company (so you have to proper setup the structure in order to avoid any trouble)

Can you elaborate please?

 

[ilpablo]

Can you elaborate please?

The NHR is supposed to benefit those who get only passive income.

So you don't have to manage actively your company from Portugal if you don't want to be asked to pay Portoguese corporate taxes there

 

[mikestachurski]

The NHR is supposed to benefit those who get only passive income.

So you don't have to manage actively your company from Portugal if you don't want to be asked to pay Portoguese corporate taxes there

Question is how to manage it passively?

 

[backpacker]

Question is how to manage it passively?

The program was never intended for people who are still "active". NHR is for retirees who receive a pension, bank interest, perhaps a few dividends.
I don't know why so many people are attracted by this NHR - must have to do with internet chit-chat were wrong expectation were set right from the start.

 

[dlttrading]

Question1 :

How is the case regarding CFC rules in PT when a PT-NHR-resident holds 49 % of a cypriot trading company. the rest 51% is owned by cypriot shareholder and director. Can the PT-NHR-resident receive dividends für 12,5% (cy divident/corporate tax rate).

Question 2: is about an other source I once found. It is about combining a NHR-resdency with a british limited. I am aware that you need to think about the CFC rules also...

"As an example, we can take the double taxation agreement between the UK and Portugal. If you are resident in Portugal as an NHR but receive dividends from England, the UK has the tax reservation according to Article 10 of the DTA, but in practice does not tax you as a non-resident. In Portugal, on the other hand, you are not taxed as an NHR because the UK could have taxed you. Thus, as a non-habitual resident, you can receive dividends from England tax-free."

Generel question:

So what is the perfect setup regarding taxes on dividends and avoiding CFC conflicts. I do business with other partners so I have few shareholders and directors in CY or other european countries available who would like to do business with me together in a perfect setup.

Thank you

 

[qwerty84]

Does PT CFC legislation even apply to individuals? That's broader than ATAD1