PORTUGAL

New rules relating to the GOLDEN VISA – October 2023

A month after the presidential veto of the “Mais Habitação” bill, the Portuguese Parliament once again approved changes to the Portuguese Golden Visa program, which are expected to come into force in October 2023 .

After the entry into force of the new law, alternative routes may still be considered either :

1 – The creation of at least 10 workstations

2 – A transfer of capital for research activities carried out by public or private scientific institutions forming 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, recovery and maintenance of national cultural heritage through public institutes and central or peripheral direct administration services, entities of the public business sector, public foundations, private foundations with public utility status, intermunicipal entities, entities of the local business sector, entities municipal associations and public cultural associations, which develop projects linked 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 euros, intended for the acquisition of participation units in investment funds (non-real estate collective investment entities) or venture capital funds focused on the capitalization of companies, constituted in accordance with Portuguese legislation, having a maturity, at the time of investment, of at least five years and of which at least 60% of the value of the investment is made in commercial companies based on the national territory

5 – Capital transfers of an amount equal to or greater than €500,000, intended for the constitution of a commercial company with its headquarters on the national territory, associated with the creation of five permanent jobs, or the increase in share capital of a commercial company having its headquarters on 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, for a total amount equal to or greater than 350,000 euros.

To 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 activity granted under the current legal regime.
The new law will also not affect requests for the granting or renewal of residence permits for family reunification;
These changes will also not affect citizens holding a residence permit for investment activity and their family members who, meeting the legal conditions, wish to apply for a residence permit for investment activity.
Future renewals will be converted to ordinary residence permit for entrepreneurs, also known as D2, without the minimum stay requirement of approximately 183 days per year, while maintaining the same minimum requirements of the Golden Visa program, namely a period of stay minimum of seven days, consecutive or interpolated, during the first year and 14 days, consecutive or interpolated, during the following two-year periods. subsequent two-year periods;
It is also established that applications for granting and renewal of residence permits for investment activity through real estate investment which are awaiting a decision from the competent entities on the date of entry into force force of the new law remain valid, as well as requests that are awaiting prior control procedures in municipal councils. These applications will also be converted into ordinary residence permits for entrepreneurs (D2).

The revisions to the Golden Visa program are bound to have an impact, which is to be expected considering that the option of real estate investment was a dominant trend and a main choice.

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

At your disposal for your additional questions

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

New rules relating to the GOLDEN VISA – October 2023

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