PORTUGAL - VENTURE CAPITAL INVESTMENT

2022 Solutions and Changes

PORTUGAL – BRAKE ON GOLDEN VISA – VENTURE CAPITAL INVESTMENT

2022 Solutions and Changes

GOLDEN VISA and ARI are doing well, investments more than doubled in September 2022, however the brake on GOLDEN VISA in the metropolitan areas of Lisbon and Porto is fueling other means of obtaining a residence permit (ARI), namely venture capital investment.

Currently, under the new regime, "203 applications are awaiting analysis for capital transfers of 350,000 euros or more, for the acquisition of participation units in investment funds or capital funds -risk-based capitalization companies, which are incorporated under Portuguese law”.

The Securities Market Commission (CMVM) is very attentive to this new way of obtaining a residence permit, and considers that venture capital investment is made without respecting all the rules aimed at preventing the entry of money of illicit origin in Portugal, in particular through real estate.

Despite the new legislation, it is still possible to invest in real estate under the ARI. There are still real estate and capital transfer opportunities for foreign investors in Portugal, under the Residence Permit for Investment (ARI) regime.

What changed in 2022

The changes generally represent an increase in the minimum amounts of capital investment, as well as limitations of the geographical areas of application of the real estate investment, for housing purposes , are applicable:

Property investment :

A minimum amount of Euros 500,000.00, for accommodation purposes , will only be allowed in Portugal, Azores and Madeira.

A minimum amount of 350,000.00 euros, with rehabilitation works , for residential purposes, is only allowed in Portugal, the Azores and Madeira.

Capital transfers :

The transfer of capital of an amount equal to or greater than 1 million euros will be subject to a minimum investment of 1.5 million euros ;

The minimum amount of investment in capital transfers intended to be applied to research activities developed by public or private scientific research institutions, integrated into the national scientific and technological system, increases from EUR 350,000.00 to EUR 500,000. EUR .00;

The minimum investment amount in capital transfers for investments in private equity funds will be increased from

€350,000.00 to €500,000.00;

The minimum amount of investment in capital transfer for the incorporation of a company in Portugal, associated with the creation of five permanent jobs, or for the strengthening of the social capital of a Portuguese company, with the creation or maintenance of these jobs, goes from €350,000.00 to €500,000.00.

Exceptions

The geographical limitations that will occur in real estate investment for housing purposes, by "pushing" investment inland and towards the islands, will allow that there are still several investment opportunities, with great potential, that will allow the promotion and development of certain areas of the country;

These limitations on real estate investment will apply "only" to properties intended for residential purposes , meaning that foreign investors will be able to continue to invest throughout the country, including Lisbon, Porto and the coast, in properties that are not intended for residential purposes (commerce, services, other), even after January 1, 2022;

The planned changes do not affect the possibility of renewing the ARI or the granting/renewal of residence permits for family reunification (provided that the investor's file has been submitted in accordance with current law).

Do not hesitate to contact us to discuss it

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 – VENTURE CAPITAL INVESTMENT

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