Features
TYPE
LENGTH
FEE
MIN AN. INCOME
LOCAL TAX
INTERNET
COST OF LIVING
PORTUGAL D7 Passive Income Visa
Alternative to digital nomad visa for anyone with Passive Income
In the past, many remote workers have successfully applied for the D7: Passive Income Visa, however, now that the proper Digital Nomad Visa exists, remote workers are expected to apply for a D8 Temporary Stay and Temporary Residency Visa instead of a D7. That said, D7 might still be an attractive option due to low-income requirements (€760 per month) and an easy application process, but only for anyone who has a passive income (e.g. dividends, rental income, royalties, and pensions).
The D7 Visa is valid for 4 months, during which you must obtain a residence permit. You’re required to stay in Portugal for at least 12 within the first 2 years. It also allows visa-free travel in the Schengen area for 90 days every 180 days.
A number of websites still refer to the D7 visa as Portugal’s digital nomad visa, that is incorrect. Remote Workers are advised to use the Digital Nomad Visas unless you only have a passive income.
PROS
- Various Tax Exemption under the NHR for up to 10 years
- Affordable living costs
- Good internet connection
- Strong digital nomad community & infrastructure
- Warm weather and stunning landscapes
CONS
- Not advised for most Nomads anymore, only if you have passive income
- The NHR tax advantages don't necessarily mean 0% income
- Process for getting the visa might take longer then it should
- Things like getting a bank account, tax number etc might take a while
Specification: PORTUGAL D7 Passive Income Visa
Taxes
Local Taxes
The Temporary Residency Visa doesn’t offer a specific tax exemption, but Portugal offers two attractive tax regimes: the Non-Habitual Residence and the Simplified Tax Regime to anyone who is going to become a tax resident of Portugal. And yes, you will become a resident of Portugal on D7 visa. This is mainly due to the fact that you need to have accommodation available to you for at least a year but also due to the fact that you will spend more than 183 days in Portugal.
Here is just a quick summary of each regime, you can read more about it here.
- Non-Habitual Resident (NHR) Program: This is a Portuguese tax incentive to attract high-value professionals and individuals. It offers reduced or even zero taxation on certain types of income from foreign sources for up to ten years. It’s a tax regime for new residents who haven’t been Portuguese tax residents in the previous five years.
- Simplified Tax Regime: This is a tax system for freelancers and small businesses registered in Portugal. Taxable profits are calculated based on specific coefficients applied to the taxpayer’s invoiced income, not actual profit. The scheme allows for simplified calculations and certain deductions.
Home Country Taxes
Holders of the D7 visa are expected to pay taxes back home unless you formally inform your home country about your absence and become tax non-resident back home.
For most of the remote workers, the fact that you going to spend over 1 year in Portugal and therefore become a tax resident there, might mean that you qualify for a tax break back home, due to prolonged absence. This depends on your residency and the existence of Double Tax Agreements between Portugal and your home country.
Certain types of income might be exempt from tax in Portugal even if your home country doesn’t want to tax you because they consider you a non-resident. This however means you might enter the digital nomad grey zone and discussing this setup with your accountant is essential.
If you are from the US, however, that becomes a bit more complicated but you should be able to use the FEIE: Foreign Earned Income Exclusion. You can learn more about it on the IRS website and we will be sure to write about it more in the future.
Requirements
D7 Visa is only available to Non-Europeans who are living of their own, passive income (e.g. dividends, rental income, royalties, and pensions), which for most Remote workers mean they would have to have their own company set up and pay themselves only dividends only.
The visa itself is valid for a period of 4 months, but it allows you to apply for a residence permit in Portugal. Once you have the residence permit, you need to spend at least 16 months in Portugal during the first 2 years. This visa also gives you visa-free travel across the whole Schengen area for up to 90 days in every 180 days.
To be approved for the 2-year visa, remote workers need the following:
- Visa Application form, filled out for each applicant;
- 2 recent photos (1 for the visa form);
- Passport or other travel document, valid for 3 months after the estimated date of return. Photocopy of passport (biographical data);
- Proof of accommodation for 1 year, try Airbnb, Flatio or Idealista (you can book for a few months in advance with a flexible cancelation policy so you can cancel if you don’t get visa);
- Proof of residency status, if you are applying for a visa from a country where you reside but which is not your home country (e.g. if you are a resident of the UK but Canadian nationality), you need to show confirmation that you can be a UK resident that is valid for more than the date of expiry of the visa you are applying for;
- Travel Insurance – ideally one that covers you for at least 1 year;
- Criminal record certificate, issued by the competent authority of the country of the applicant’s nationality or of the country where the applicant has resided for over a year
- Request for criminal record inquiry by the Immigration and Border Services (SEF) [pdf]
- Proof of financial resources in case of independent professional activity, one of the following documents:
- Company registration or a contract confirming the services you provide or a contract with a supplier
- NIF – Portuguese tax identification number
- Portuguese Bank Account and make the deposit (you will need NIF to open the account)
- Proof of average monthly income for the last three months with a minimum value equivalent to min monthly salaries in Portugal. As of 2023, that amount was €760, so at least €9,120 a year, which comes to about US$ 10,500 per year. If you want to bring dependents, 50% of the salary is added for a partner and 30% for each child.
- You will need to show evidence of this over at least 3 previous months.
- You can provide bank statements showing the amount (ideally in your Portuguese bank account).
- Proof of your tax residence – confirmation of where you pay your taxes. If you are one of the nomads who try the “tax nomad” lifestyle, you might have a big problem getting this visa as proving your tax residency is one of the application requirements.
Visa applications should be submitted in advance as it can take up to 60 days to receive the response.
Apply
Process
1
Prepare All the Documents
2
Get your PT Tax Number (NIF) and Bank Account
3
Setup an appointment with a Portuguese Embassy
4
Attend the interview submit the required documents
5
Travel to Portugal
6
Attend your pre-assigned SEF interview in Portugal within 4 months of visa approval.
7
Receive your Portuguese Residency Permit Card valid for 2 years
Application review is expected to take up to 60 days following receipt of all required documentation.
Fees
The initial visa application fee is typically around $100 or €90. You submit it at your local Portuguese consulate or embassy. If you apply from abroad or don’t want to deal with the Portuguese bureaucracy yourself, you can hire a lawyer to apply on your behalf.
If your visa is approved and you arrive in Portugal, you then need to apply for a residence permit from the Immigration and Borders Service (SEF). The first residence permit for the D7 visa costs approximately €83, with an additional €72 for the issuance of the document.
You should also consider the cost of getting the:
- NIF – Portuguese Tax Number (see options in Nomad Business Network)
- Portuguese Bank Account (as above)
- Lawyer & Fiscal Representation
- Accommodation
How
The application can only be made in person. Once your application is approved, you have 4 months to pick up your residency permit in Portugal.
All the details of the program, including How to Apply and Visa Application Form, are available on the government website:
Govermet Info Application Form [pdf]Facilities
Medical
Yes, once your D7 residency permit has been approved by SEF (Portugal’s Immigration and Borders Service), you’ll be able to access Portuguese public healthcare services in the same way that a regular resident would. However, you do need to register with Portugal’s National Health Service (SNS) to gain access.
Please note that the D7 Visa requires applicants to purchase travel insurance in their home country, which provides health coverage for one year. This proof of coverage will be requested along with other required documents when applying for the D7 Visa.
Schools
Children of visa holders can attend the private but also the local public schools. This is part of the benefits of having a D7 Visa, which essentially grants you the rights of all European Union citizens.
Traveling
You can travel freely in and out of Portugal on the D7 visa but once you have the residence permit, you need to spend at least 12 (absence of 8 non-consecutive months) to 16 months (absence of 6 consecutive months) in Portugal during the first 2 years. After that, it’s expected that you spend no less than 28 months in the country in any 3 years.
This visa also gives you visa-free travel across the whole Schengen area for up to 90 days in every 180 days.
Assistance
For more details see:
Country Info
Internet
The average internet speed in Portugal is relatively high, clocking in at about 63Mbps. While there might be occasional inconsistencies, the robustness of the digital infrastructure ensures that coworking spaces, cafes, and other public places generally offer reliable connectivity.
Portugal has also taken note of the growing digital nomad community and is making dedicated efforts to enhance its digital infrastructure even further, making the country an attractive destination for remote workers globally.
Cost of Living
The cost of living in Portugal is generally more affordable compared to countries like the US, the UK, or other Western European nations, though it may be higher when compared to some countries in Eastern Europe or other regions globally. Nevertheless, it still offers a cost-effective lifestyle when compared to many popular destinations around the world.
In terms of our ☕ Cappuccino Index, which uses Numbeo’s average price for a regular cappuccino, the average cost in Portugal is US$ 1.62. This is significantly lower than the average price in the US, which stands at US$ 4.30, and in the UK, where the average cost is US$ 3.83. Therefore, living in Portugal can be a budget-friendly option, especially for coffee lovers.
FAQs
Am I going to become a Portuguese Tax Resident if I am approved for the visa?
Most likely, yes you will! Mainly due to the fact that you need to have accommodation available to you for at least a year but also due to the fact that you will spend more than 183 days in Portugal.
What happens with my tax residency back home?
Well, it depends on where home is.
For most of the remote workers, the fact that you going to spend over 1 year in Portugal and therefore become a tax resident there, you might qualify for a tax break back home, due to prolonged absence but it depends on the existence of Double Tax Agreements between Portugal and your home country plus you should make sure that you formally inform your home country about your absence.
If you are from the US, however, that becomes a bit more complicated but you should be able to use the FEIE: Foreign Earned Income Exclusion. You can learn more about it on the IRS website and we will be sure to write about it more in the future.
Videos
Source: Scenic RelaxationDisclaimer: Our aim is to provide an overview of Digital Nomad Visas & Taxes that should not be considered as legal opinion or tax advice. You should always seek expert advice. If you want to receive a legal opinion or tax advice, please contact us, and we will refer you to a legal practitioner.
Learn about the data sources & how is the score calculated. Published on July 14, 2023.
