How to Retire in Europe with the Portugal Passive Income Visa

The Portugal D7 visa offers an option for retirees to obtain residency if they meet certain passive income requirements. Mint explains what you need to apply for the D7 visa, which is also known as the Portugal passive income visa.

Financial Eligibility

As mentioned above, the D7 visa requires applicants to meet certain minimum passive income thresholds.

This income could come from various sources: rents, dividends, interest income, pensions, etc. The minimum income requirement is linked to minimum wages in Portugal. While the minimum wage in Portugal is currently €820 per month, it is recommended that an applicant maintain a passive income of €1,000 per month ( $93,000), while the minimum wage continues to fluctuate. Annually, this amounts to €12,000 ( $11.16 lakh).

If the spouse needs to be added to the application, the passive income requirement increases by 50%. Thus, the total passive income requirement for a couple amounts to €1,500 ( $1.39 lakh) per month, or €18,000 ( $16.74 lakh) per annum.

But since these figures are linked to minimum wages in Portugal, you may need a higher income stream depending on your living costs and lifestyle needs. Therefore, the larger the income stream, the better. It also adds weight to your D7 visa application.

You can add a minor dependent or an adult dependent (single and studying) to your D7 visa application, but then the total passive income requirement would be slightly higher.

starter kit

You can apply for the D7 visa through the Portuguese embassy. The application fee for a single adult is €90 ( $8,370). However, before even beginning the application process, you need to have certain things in place.

First of all, you need to find a Portuguese lawyer who can remotely help you obtain a NIF, which is the taxpayer identification number in Portugal.

Apart from this, it is necessary to open an account in a Portuguese bank. Once you open the bank account, you will need to deposit the minimum passive income during the first year of your stay in Portugal. Therefore, you will need to deposit €12,000, based on current salary trends in Portugal, if you apply for a D7 visa just for yourself.

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It is also necessary to obtain proof of accommodation in Portugal. This can be done by renting a property for a minimum 12 month contract or by obtaining a ‘term of liability’ signed by a local friend or family member in Portugal, stating that they are willing to provide you with accommodation for 12 months.

Once your application is approved, you are granted a four-month double-entry visa to Portugal, with a temporary D7 visa. You must visit Portugal to apply for the final D7 residence visa, register your biometrics and provide other documents.

“Within four months of arriving in Portugal, make an appointment with AIMA (Integration, Migration and Asylum Agency) for an interview and biometrics. You need to carry documents like proof of passive income, accommodation, criminal record certificate, health insurance and valid passport,” says Himani Negi, associate partner at Multipolitan, a global migration platform.

Stay requirements

The D7 visa is initially issued for two years. However, the minimum stay required during the initial two years is 16 months. A D7 visa holder cannot leave the country for six consecutive months or eight months in total.

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After the initial two years, the visa can be renewed for three years. During this three-year period, the D7 visa holder must stay in Portugal for 28 months. The visa holder cannot leave the country for six consecutive months or eight months in total during this three-year period.

Labor rights

As the D7 visa is granted to people who are financially independent and can support themselves without working in Portugal, you cannot work for a local Portuguese company on a D7 visa.

In addition to residence rights in Portugal, the D7 visa also provides visa-free access to the Schengen Area, which includes 29 European countries.

However, after obtaining permanent residency, you can work for a Portuguese company.

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Permanent residence or citizenship can be applied for after five years with a D7 visa. In addition to unconditional residence in Portugal and visa-free travel to the Schengen area, permanent residence also allows you to work in Portugal.

Portuguese citizenship grants the maximum rights as it completely opens access to the European Union. As a holder of a Portuguese passport, you can live and work freely throughout the Schengen area. The Portugal passport also provides visa-free or visa-on-arrival access to 188 countries.

Tax implications

India and Portugal have a Double Taxation Avoidance Agreement (DTAA). Speak to a qualified public accountant in Portugal to understand the taxes applicable to different types of passive income. For example, if you receive a pension from a National Pension Scheme (NPS) in India, you will have to pay taxes as per Portuguese taxes, according to Harshal Bhuta, partner at accounting firm PR Bhuta & Co. pension income, as per defines the DTAA. Therefore, it will be considered ‘other income’, which is only taxed in Portugal according to the DTAA,” he says.

Who is eligible for the D7 visa?

The Portugal D7 visa is suitable for people who really want to move to Portugal, as it has high minimum stay requirements. Paresh Karia, a Mumbai-based chartered accountant who tracks the immigration space, says this visa program is suitable for senior executives who receive large pension income or traditional investors with real estate investments and rental income.

“Even large stock investors or retired corporate officers who earn large dividend income from their stocks could qualify for this program through adequate dividend income,” adds Karia.

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