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by 858493 | Oct 12, 2023 | Uncategorized

New rules regarding the GOLDEN VISA – October 2023

One month after the presidential veto on the “Mais Habitação” bill, the Portuguese Parliament has again approved changes to the Portuguese Golden Visa program, which are expected to come into effect in October 2023 .

After the new law comes into effect, alternative paths may still be considered, either :

1 – The creation of at least 10 jobs

2 – A capital transfer for research activities carried out by public or private scientific institutions that are part of the national scientific and technological system must be greater than or equal to 500,000 euros

3 – Capital transfers of an amount equal to or greater than 250,000 euros may be made to support investment or artistic production, the recovery and maintenance of national cultural heritage through public institutions and central or peripheral direct administration services, public sector entities of companies, public foundations, private foundations with public utility status, inter-municipal entities, local sector entities of companies, municipal associative entities and public cultural associations, which develop projects related to artistic production or the recovery and maintenance of national cultural heritage;

4 – Capital transfers of an amount equal to or greater than €500,000, intended for the acquisition of equity units in investment funds (non-real estate collective investment entities) or venture capital funds focused on business capitalization, established in accordance with Portuguese legislation, with a maturity of at least five years at the time of investment, and of which at least 60% of the investment value is made in commercial enterprises based in Portugal.

5 – Capital transfers of an amount equal to or greater than €500,000, intended for the formation of a commercial company having its registered office in the national territory, associated with the creation of five permanent jobs, or for the increase of the share capital of a commercial company having its registered office in the national territory, already existing, with the creation of five permanent jobs or the maintenance of ten permanent jobs, for a minimum period of three years.

It will no longer be possible to invest through:

Capital transfers of an amount equal to or greater than 1.5 million euros
The acquisition of real estate with a value equal to or greater than 500,000 euros
Acquisition of real estate whose construction was completed at least 30 years ago or located in an urban rehabilitation zone and execution of rehabilitation work on the acquired real estate, with a total amount equal to or greater than 350,000 euros.

Note:

The new law will not have retroactive effect

Portuguese funds that are directly or indirectly linked to real estate investments will no longer be eligible for GV investment purposes
This legislative amendment will not affect the possibility of renewing residence permits for investment activities granted under the current legal regime.
The new law will also not affect applications for the granting or renewal of residence permits under family reunification;
These changes will also not affect citizens holding a residence permit for investment activity and their family members who, meeting the legal requirements, wish to apply for a residence permit for investment activity.
Future renewals will be converted into ordinary residence permits for entrepreneurs, also known as D2, without the minimum stay requirement of approximately 183 days per year, while retaining the same minimum requirements of the Golden Visa program, namely a minimum stay period of seven days, consecutive or interpolated, during the first year and 14 days, consecutive or interpolated, during the following two-year periods;
It is also established that applications for the granting and renewal of residence permits for investment activities through real estate investment that are pending a decision from the competent authorities on the date the new law enters into force remain valid, as do applications that are awaiting prior review procedures by municipal councils. These applications will also be converted into ordinary residence permits for entrepreneurs (D2).

The revisions to the Golden Visa program will inevitably have an impact, which is predictable given that real estate investment was a dominant trend and a primary choice.

However, as with any change, the market will have to adapt, not only by offering alternative products, but also by introducing innovative and refined projects in various sectors where the country currently needs investment, such as the environment, technology, culture and education.

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BUSINESS TAXATION MINIMUM TAXATION

The global tax landscape is changing with repercussions for Switzerland and the companies based there.

According to the roadmap planned by the OECD and the G20 states, the first elements of a minimum tax should come into force on January 1, 2023. The Federal Council has therefore decided to implement the minimum tax through a modification of the constitution and to ensure, by means of a transitional order, that the minimum taxation can be introduced on January 1, 2024. Voters will be called upon to vote on this subject on June 23, 2023. Fiscally, Switzerland remains an attractive place for businesses and individuals alike , but with a view to the introduction of a global minimum tax on large companies, some cantons must prepare to tax large companies more. In view of the reforms envisaged by the OECD and the G20 countries, which plan to introduce a minimum profit tax rate of 15% for companies , the differences that exist between cantons which tax their companies low, such as Zug 11.85%, and Berne 21.04% which tax them heavily will decline. However, the minimum tax rate of 15% targeted by the OECD will only apply to companies with an annual turnover of more than €750 million. In French-speaking Switzerland, the cantons of Vaud and Geneva have set their corporate profit tax rate at 14%, Neuchâtel at 13.57%, Friborg at 13.87%, Valais 17.12% and Jura at 16%. %. Compared to the minimum rate of 15% planned by the OECD, the gap is not very high and these cantons will only have to make a slight adaptation to be in compliance with the rates planned by the OECD In German-speaking Switzerland , the canton of Zug is at the top of the ranking, with a rate of 11.9%, Nidwalden (12.0%) and Lucerne (12.2%). With a rate of 21.0%, the canton of Bern is at the bottom of the pack .

2022 profit tax rates in Switzerland

In international comparison, companies are taxed low in Switzerland . Rates lower than those in low-tax cantons are only found in traditional offshore domiciles, in Guernsey, Qatar and a few countries in Eastern (southeast) Europe. Ireland remains Switzerland's main competitor in Europe.
Internationally, large Swiss companies will also be subject to the same rules as those located in cities like Singapore, Hong Kong or Dubai, which will also have to increase their tax rate to 15%.
There will therefore be fewer incentive factors which will encourage companies to move to such locations purely for tax reasons. For very large companies, tax competition between cantons will play a less important role as a factor in establishing themselves in the future. future.
As for whether developments in corporate taxation will have consequences for personal taxation, only time will tell.

2022 income tax rates in Switzerland

PORTUGAL

New rules regarding the GOLDEN VISA – October 2023

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BUSINESS TAXATION MINIMUM TAXATION

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