We welcomed Madalena Pedreira, Lawyer at LVP Advogados, a law firm based in Portugal that assists international clients with investments, Portugal Golden Visas, residence, and citizenship matters, on our podcast, The Golden Quarter Show.
Key takeaways from our conversation with Ms. Pedreira were:
- How LVP Advogados serves its international clients and how its reluctantly but successfully a ‘one stop shop’.
- The distinctions between both the D7 and the Golden Visa and which solution fits best.
- The tax incentives and opportunities for entrepreneurs and digital nomads in Portugal.
- The undeniable lure of the Non-Habitual Residence Regime and how it continues to magnetize HNWIs to Portugal.
- The demand for Portugal’s Golden Visa and D7 Visa coming in most recently from the US as well as the millionaire hub – Dubai.
Madalena is a lawyer at LVP Advogados in Portugal. She specializes in Foreigners and Nationality Law, Real Estate Law, Corporate Law, and Sports Law. Ms Pedreira completed her law degree at the University of Lisbon, before going on to study Sports Law at the University of Melbourne. She also holds a Masters in Law from the University Institute of Lisbon. Professionally she has undertaken numerous roles and has well over a decade of experience in serving corporate and HNWI clients.
Advising foreign investors in Portugal
Lorena Jimenez: Madalena welcome to the Golden Quarter Show. It is a pleasure to have you on. To start off with, it would make sense to learn more about LVP Advogados and what it is that you do and also, if you could give us some insight on who your clients are and where they’re based.
Madalena Pedreira: Thank you for inviting me. We are a boutique law firm, we have a long experience in dealing with international clients, especially with their investments in Portugal. We have a very personal approach to our clients and we always make a point of getting to know them personally.
Each client is assigned a client managing lawyer that acts as a single point of contact between the client and the firm. This is very good because you always get to speak with the same lawyer and it is someone who knows the file closely, it is someone that it is always able to provide a timely reply and knows your needs instead of jumping around between lawyers for a single matter.
Our clients are usually high net worth individuals, they are looking for tax opportunities, tax benefits and they are also looking for solid investment opportunities and residence by investment permits.
We assist international clients who are looking to move on a permanent basis to Portugal, due to retirement and/or the digital nomad lifestyle and the friendly taxation offered. We have several programs that are very attractive to foreign people, opportunities of investment in general, and of course, those typical things about Portugal; the weather, the food, the wine, the safety, and quality of life.
Lorena Jimenez: Whereabouts are your clients mostly from?
Madalena Pedreira: Most of them are from the US, we have some from Brazil for obvious reasons of language and history.
We have several clients and there has been a growing tendency to attract new clients from Arabic countries. We see a lot of people coming from Dubai, but they are not actually citizens of Dubai, of course, so they come from Lebanon, from Pakistan, even from Syria, or from Turkey, but they are residents of Dubai or Qatar or Abu Dhabi.
We also have some European clients as well that are always exploring options for tax purposes more than for investment purposes.
Establishing long-standing relationships with clients and associates
Lorena Jimenez: Just to delve into that a bit further, do you support clients that are looking at investing in Portugal or obtaining the Golden Visa? Do you find them investment opportunities, is this mostly for real estate, or funds? How do you support your clients with their investments?
Madalena Pedreira: Actually, it really depends on their final goal, because if we are looking at investors, just for the purposes of investing and not actually wanting to move on a permanent basis to the country, we suggest either the golden visa or just an investment.
If they are not looking for a residence permit, we will we look at the investment portfolio that they already have, look at their source of income, their family situation, their employment situation, and try to point them in the right direction.
When our client’s needs go beyond our scope, or those of our legal services, we introduce them to third party professionals.
These are people that have been working with us, they are our business partners for a long time and we can liaise with them on behalf of the client. We are an exclusive interlinked interlocutor for those matters.
The process of obtaining a Portugal Golden Visa or the Portugal D7 Visa
Lorena Jimenez: What about in terms of the clients that do come over for Golden Visas? Or the D7 as well? Do you support them with processing their applications? Or once they relocate to Portugal where does the string end from your end?
Madalena Pedreira: Well, we do not like that expression that I am about to say, but we do provide a ‘one stop shop’ service.
It is not a very happy expression but it’s the truth.
The client must decide if their goal is to move on a permanent basis with their family, or if their goal is just for investment purposes and to travel freely within the Schengen space.
For those who are willing to change their tax residency to Portugal, to change their own life, we offer several opportunities.
The most common nowadays is the D-7 or the passive income residence permit. This is not only for those who receive passive income, such as rental income, interests, capital gains, dividends, but it is also for those who are working in Portugal remotely for a foreign company, as that’s also considered passive income.
For those who want to diversify their investments, or want to have a permit just to travel freely the most common solution is the is the Golden Visa, it is the most attractive residence permit. It has a very short period of stay requirement as you only must stay for 14 nights for the validity of the residence card which is two years. We also provide a full scope of services from day one to find the right investment, to purchase the property, to invest and to go through all the hassle, and believe me, it is a hassle at the immigration office.
Clients really need a lawyer because they do not speak English and language is a barrier. There is a lot of bureaucracy, a lot of administrative work so we go through all the hassle of going through the immigration office and after you receive the residence permit, we continue to support for all the renewals.
The high demand for the Portugal D7 Visa
Lorena Jimenez: You do most certainly hold the hands of your clients throughout then, and are you noticing now post-COVID a bit more of an uptick in the number of D7 applicants, specifically digital nomad applicants that you have got coming in?
Madalena Pedreira: Definitely. If before COVID, the Golden Visa was in high demand, at this moment, we have seen this growing tendency of people wanting to move to Portugal with their families, they want to have a second residence and, in less instances, do they want to have a second passport.
They want to have a way out of their own countries, sometimes it is problematic countries like Lebanon or Pakistan, or Russia so they are looking for an opportunity for a second chance for their kids.
There is a very high demand now for the D7 because COVID created a remote work policy for so many companies, and people are just taking advantage of it.
People are moving around, and they are working remotely in a country that can offer a better quality of life, we still have low cost of life here when compared to other countries, and still offer very good tax opportunities for newcomers, and even for companies as well.
We are a very, very attractive country.
We are extremely sexy now.
A very attractive and sexy country.
And that is why I think we have a high demand.
Tax Incentives in Portugal
Lorena Jimenez: You also touched upon the tax incentives and opportunity could you elaborate a bit more on the tax incentives for entrepreneurs and business owners in Portugal, what would you say the key ones are?
Madalena Pedreira: Well, I will not get into the specifics, otherwise, I would have to do another podcast as the Portuguese tax system is too confusing. This is also why we suggest to our clients always to meet one of our tax lawyers or consultants, because it’s impossible to get it by yourself.
In brief, we have four main tax benefits and incentives for companies.
- We have an incentive for research and development;
- We have a special regime to support investments in which you also have deduction for investments made in certain regions of the country and in the islands, this aims to benefit low density areas;
- The third one is the deduction for reinvestment of retained earnings;
- The last one is a tax benefit for a deduction to the taxable profit up to 7% of the contributions in share capital.
All these four benefits are very beneficial for the companies that are headquartered in Portugal. So, if you incorporate a company in Portugal, you can benefit from not just these main four, but we have a long list of them.
For individuals that are not incorporating companies and are moving to the country, we have the so well-known non habitual residence regime.
This is a tax regime and does need to also have a residence permit, and this is very important, because sometimes I hear clients that get a little bit confused and they say, “I have a visa, I have the non-habitual residence.” To which I clarify this is not a visa as both work in parallel and both live to complement the other but one does not replace the other.
The non-habitual tax residency is just a tax regime that you can apply for after you become a resident.
This regime is beneficial for all those who did not live in the country for the past five years and those registered as tax residents of Portugal. Now, this is particularly attractive for people who receive passive income from foreign countries as most of this passive income is exempt from taxation.
In the case of high added value professional occupations, they can benefit from a flat tax rate of 20%. After registration, this regime is valid for 10 years so for at least for 10 years, you can benefit from this flat tax rate, which is extremely attractive.
LVP Advogados: Prioritizing Service and Advice
Lorena Jimenez: Obviously, what is an example of why clients do choose to work with LVP Advogados. Do you have a case study you would like to highlight from your end?
Madalena Pedreira: We see an increase daily of client referrals and I think this is the best way of knowing that we are doing a good job. In fact, I need to thank them for that, as well.
Law work involves a lot of responsibility and our clients are usually high net worth individuals who are looking for the best performance when it comes to investing in a foreign country. I think the personal relationship we have created with clients, the success rates, and our fast responses have been the main factors to our success, our clients themselves refer us to their colleagues, family, and friends.
In terms of a case study, we have this typical situation that happens almost every day. We are reached out to by the client by email, or through the website, or whatever channel they choose to contact us.
Normally they think that the Portugal Golden Visa is the only available residence permit but this client wants to move to Portugal. He/she wants to move, to buy real estate to live in it, so they are not interested only for investment purposes and their email will say “I’m interested in the Golden Visa, I want to move and buy real estate by the end of the year.”
We have this policy of always offering the best option for the client, not looking only to profit, but also to present a variety of options, and the most suitable option for the very specific situation of this client.
The Portugal Golden Visa is designed for clients who do not want to move to Portugal.
It is designed for foreign investors who actually just want to have the permit to travel freely within the Schengen space, without having to ask for a Schengen visa when they want to travel to Europe.
So, for the typical situation where a family wants to move to Portugal, we always discard this option of the Golden Visa.
We offer them another solution based on their source of income, employment status, and investment portfolio. Usually it is the D7, the passive income visa, and in this way, we end up making the client keep more of their money because instead of paying the super expensive government fees for the Golden Visa, they end up spending a lot less money with the D7 visa.
Lorena Jimenez: And I am sure they appreciate that the authenticity of that level of service as well.
Madalena Pedreira: Yes, because sometimes you do not even know what to expect and it is a situation of pure ignorance, which is totally normal when investing in a foreign country that has different rules. Because the internet is full of Portugal Golden Visas all the time, some people end up not knowing the spectrum of possibilities available so we try to assess each situation to provide a specific solution.
Lorena Jimenez: Thank you Madalena, you have provided a great overview of what your services are, what your added value is, and obviously what makes Portugal so attractive. Thanks for going through those points with us, but before we wrap up, perhaps if you could just let us know where our audience can reach out to you for any further information.
Madalena Pedreira: We have all our contacts in our website and I think this is the best way of contacting us. Its www.lvpadvogados.com and you have a general form you can fill and we will reach out very shortly. Or you have direct contact details in the team’s page as well where you can contact any one of our lawyers and we invite you to do this.
Lorena Jimenez: Fantastic. Well, thank you so much for joining in on the conversation Madalena it was a pleasure having you on.
Madalena Pedreira: Thank you for inviting me.
Read more about LVP Advogados on their website. Our conversation was initially recorded in June ’22.
