As Portugal reopens its borders to American travelers, now is a perfect time to consider a move to Portugal from USA.
Portugal has become one of Europe’s most popular relocation destinations. This small Atlantic country has so much to offer, from scenic destinations like the Algarve, Silver Coast and Madeira, to generous tax breaks for remote workers and online business owners.
For those who move to Portugal from the USA for the long-term, there’s the option to go for Portuguese citizenship after just five years – one of the fastest timelines in the European Union.
Armed with an EU passport, you’ll benefit from freedom of movement across the entire Eurozone. That includes not just freedom of travel, but the full rights to live, work, study and retire across all countries in the EU.
So, without any further ado, let’s dive in and look at 11 reasons to move to Portugal from the USA.
1. Political stability
Are you fed up with constant conflict between Republicans and Democrats? Are you concerned that Trump might somehow get back into power in 2024? If you move to Portugal, you can leave those stresses behind.
Portuguese politics isn’t perfect either, but as a foreigner in Portugal, you won’t have to deal with constant anxiety about the country’s political direction. What’s more, Portugal is politically stable and lacks the toxic polarization that presently characterizes the United States.
And if you’ve had enough of sovereign citizens, QAnon obsessives, and rampant antivaxxers, then Portugal will make a refreshing change of pace.
2. Free healthcare
Europe has long been known for its state healthcare, and Portugal’s no exception. When you move to Portugal and become a resident, you’ll be eligible to access free good quality healthcare anywhere in the country. If you still prefer to go private, health insurance in Portugal is very affordable compared to the US.
Also, health issues don’t get as politicized as they do in the US. For example, Portugal legalized abortion in 2007 (albeit very late compared to the rest of Europe). The country held a referendum on the issue in February 2007 with 59% voting in favor of legalization. Now women are much safer, as the number of deaths from complications has reduced to zero.
Then there’s the drug issue. In 2001, Portugal became the first country in the world to decriminalize the consumption of all drugs. Since then, it has seen dramatic drops in overdoses, HIV, and drug-related crime.
3. Guns, yet low gun crime
You might be surprised to discover that Portugal has some of the most relaxed gun ownership laws in the EU. Portuguese citizens can own guns for hunting, target shooting, pest control and collecting.
There’s even a permit for self-defense, but it’s hardly ever granted to civilians. This policy has caused tensions between Portugal and the rest of the EU, which has far more stringent laws on gun ownership, such as the EU Gun Ban.
Despite all this, gun crime in Portugal remains extremely low. Mass shootings on a United States scale are practically unheard of. In 2016, Vice News tracked all the mass shootings across Europe. Portugal featured only twice. In both instances, five people were injured. None died.
In the same year, the USA had 133 mass shootings within just 164 days, including the notorious Orlando nightclub attack in which 49 people were killed.
4. Safer food
Thanks to EU regulations, Portugal has significantly stricter sanitary and animal welfare standards than the US.
For example, the US uses chemical washes such as chlorine, growth hormones in animal feed, genetically modified foods that aren’t labeled and pesticides that are banned in the EU. That means no chlorinated chicken or high fructose corn syrup.
In some regions, such as Madeira, locally grown produce (such as bananas and avocados) is plentiful and low-cost. Produce that doesn’t grow in Portugal is often brought in from nearby Spain, reducing environmental costs in terms of transportation.
5. Easy immigration pathways
Now let’s look at how to get into Portugal as a US citizen. For starters, all US citizens can enter Portugal visa-free as tourists for stays of up to 90 days. During that period, you can use your 90-day allowance to travel freely across other countries in the Schengen zone.
For those who want to stay in Portugal for the long term, the two best options are the D7 visa or the Golden Visa. Let’s take a quick look at what each one involves.
The D7 Passive Income Visa
The first is the D7 visa, often known as the ‘passive income’ or ‘retiree’ visa. In fact, this flexible immigration pathway goes beyond just passive income or pensions.
The D7 is also a good fit for remote workers and online business owners. Portugal allows those working remotely with an overseas employer to be eligible for D7, as well as online business owners who draw their income in dividends.
The most important factor in getting the D7 is showing proof of income, and, depending on the embassy, proof of having enough savings in the bank. Income levels are based on the equivalent of the Portuguese minimum wage, which at €665 per month is one of the lowest in the EU.
The Portuguese government wants to know that D7 applicants can support themselves in Portugal without needing to ask for state funds. If you can do that, and don’t have a criminal record, then the D7 visa is easy to get.
The initial D7 residency is valid for two years. After that, you’ll need to renew your status again for a further three years, which means showing evidence of sufficient income and savings. Once you hit the five-year residency mark, you’ll become eligible to apply for permanent residency or citizenship.
It’s important to note that D7 residency means that Portugal should be your main home. You’ll need to become a Portugal tax resident and declare your worldwide income to Portugal every year, although you won’t necessarily have to pay tax on it. We’ll take a closer look at the tax implications in the next section, after looking at one more useful type of visa.
The Golden Visa
The second immigration pathway is via Portugal’s residency by investment program, known as the Golden Visa. It gives you immediate residency for five years, which will take you all the way to being eligible for permanent residency or citizenship.
In return, Portugal wants you to make a significant investment in the country. The most commonly used option is real estate, but there are also opportunities to invest in venture capital funds, arts and heritage projects, or simply deposit €1 million into a Portuguese bank.
Real estate investment thresholds can be quite affordable, ranging from €280,000 in low density areas of the country to €500,000 for any sort of real estate in any region. Lisbon, Porto, and the Algarve are the most popular areas for Golden Visa real estate investment, but the Portuguese government will remove them from the list at the end of 2021.
Perhaps you want to move to Portugal from the USA with the Golden Visa but can’t manage it until 2022 or beyond. In that case, getting your Golden Visa in Madeira could be one of your best alternatives to Lisbon, Porto, and the Algarve. Here’s our full article on the first-hand experience of life in Madeira.
6. Generous tax breaks
Let’s now look at what Portugal offers in terms of tax benefits. In fact, Portugal isn’t a tax haven or even a low tax country. It uses a progressive income tax scheme with a top threshold of 48%.
But one of the main attractions for foreigners who move to Portugal from the USA is the non habitual residency (NHR) tax scheme. This name is misleading, because it’s full-time tax residents of Portugal who typically use the NHR scheme.
So, what exactly is Portugal’s NHR scheme and what does it offer?
The NHR grants preferential tax treatment for a period of 10 years to individuals (foreigners or citizens) who haven’t been taxed as a Portuguese tax resident during the preceding five years.
You can apply for NHR status from the moment you register as a tax resident of Portugal. Benefits include tax exemptions from non-Portuguese sourced income in most categories, including foreign dividends, salary, real estate income and capital gains on property.
NHR status also gives you a flat rate of 20% tax on most Portuguese-sourced income, if it comes from one of the eligible professions. For more information, here’s our full guide to the NHR scheme.
NHR is extremely beneficial for those with EU citizenship as their end goal. The NHR timeline extends far beyond the citizenship timeline, allowing you to work towards Portuguese citizenship while still benefiting from preferential tax treatment.
It’s important to note that US citizens must file taxes with the IRS every year no matter where they live. The US has a citizenship-based taxation scheme, but, thanks to the double tax treaty, you won’t be taxed twice in both the US and Portugal.
If in doubt, you should seek advice from a qualified US tax advisor with cross-border knowledge.
7. Cash out crypto tax-free
Another big benefit of a move to Portugal from the USA is Portugal’s treatment of income from cryptocurrency investments.
At present, Portugal doesn’t levy capital gains tax for gains on cryptocurrency (although this only applies to investments rather than day-trading. The latter would likely be classified as work and taxed accordingly).
If you’ve made large gains on crypto in the last few years and are thinking of cashing out, a move to Portugal to become a tax resident could be an interesting solution for you.
8. Five years to full EU citizenship
Here at Digital Émigré, our number one goal is helping people to get EU citizenship. We’re firm believers in the many benefits of dual citizenship, which go beyond those of mere permanent residency. Here’s our full comparison of permanent residency vs citizenship.
So how does Portugal measure up when it comes to getting citizenship? The answer: extremely well.
In fact, Portugal has one of the fastest citizenship by naturalization pathways in the whole EU. Five years is as quick as you’re going to get without having family ties to an EU country. What’s more, Portugal allows dual citizenship, so you’ll get to keep your US passport. Language skills are a requirement for citizenship, but Portugal’s required level is one of the lowest in the EU.
A massive benefit of having a Portuguese passport is full freedom of movement across the EU countries, with the right to live freely, travel, access study at EU-level tuition rates, and retire anywhere you want in Europe. Fancy spending your golden years in Greece or Italy instead of Portugal? That’s easy to do as an EU citizen.
What’s more, if you get into trouble while travelling abroad, as a Portuguese-US dual national you’d be entitled to consular assistance from the embassy of any EU country (if Portugal isn’t represented), as well as from the United States embassy.
9. Access the entire Schengen zone
Remember that 90 days in 180 limit on travel across Europe? Well, as a resident of Portugal, you’ll be able to reset it by going back to Portugal (instead of leaving the Schengen area altogether). Once you’re a citizen, the limit gets removed completely and you can travel across Europe for as many days as you like. You can also move freely to any EU country if you decide to Portugal is no longer the right fit.
10. Diverse choice of destinations
Portugal has some stunning places to live in. Whether you’re a fan of year-round sunshine, or prefer a cooler climate, Portugal has it all. Madeira is a great place to opt out of winter permanently, while Porto offers a similar climate to San Francisco.
The Algarve region is loaded with golden sand beaches and boasts a lively international community, while cosmopolitan Lisbon has everything that a world capital should offer.
Central Portugal has countless historical towns, such as the old university city of Coimbra, and affordable real estate investments that still have plenty of mileage for the Golden Visa beyond the end of 2021.
11. Tolerant and progressive
Portugal is famous for its tolerance of LGBTQ and alternative lifestyles. Despite its conservative Catholic heritage and recent dictatorship, Portugal has evolved into a progressive and accepting country.
As an LGBTQ foreigner, you’re highly unlikely to experience any form of homophobic violence. People are more likely to just accept you with a relaxed indifference – as it’s none of their business anyway.