By Miguel Silva Reichinger Pinto Correia No Comments
Last Updated on June 19, 2020 by Miguel Silva Reichinger Pinto Correia
In an effort to promote investment in the country and attracting digital nomads, freelancers, startups and digital entrepreneurs, the Portuguese Government approved Resolution of the Council of Ministers no. 30 / 2020, which sets ou the Action Plan for the Digital Transition (“PATD”) on April 21, 2020. This plan is in line with policies defined by the European Union for the period 2021-2027, aiming at innovation, digitalization, economic transformation of the Single Market.
Under said plan the Government has establish 12 sub-plans to be carried out in accordance with the foreseen digital transition strategies, two of them being of extreme importance for investors and expats alike: the E-Residency Program and the Free Tech Zones.
The E-Residency Program, similar to the one implemented by Estonia in 2014, aims at facilitating access by non-Portuguese to Portuguese services such as company formation, banking, payment processing, and taxation. The program will give the e-resident a smart card which they can use to sign documents and carry out business in the country.
Portugal’s E-Residency Program, foreseen to be launched in early November this year, will allow investors to submit all the needed documentation for application in exchange for residency kit, if said application is approved.
The other important measure foreseen in the PATD is the creation of Free Tech Zones, physical spaces/locations where high-end technologies (such as 5G or self-driving vehicles, for example) can be tested and displayed.
Free Tech Zones will be managed in such a way that specific legislation and regulations will be enacted in order guarantee that enough legal flexibility exists to promote research and development (R&D).
Both these programs are expected to actively promote the development of Portuguese tech companies and research centers through the acceleration of development and testing processes and the creation of Portuguese knowledge and intellectual property.
In this way, these programs will promote Portugal’s positioning in R&D, national resources and participation in international projects, as well as the attraction of innovative projects, foreign investment related to emerging technologies and qualified workers.
The existence and development of such programs can be integrated with Portugal’s attractive taxation system available not only for individuals but also to companies, i.e. the Non-Habitual Tax Resident (NHR) program and the Madeira International Business Center (MIBC).
E-Residents that, at a later stage, wish to relocate to Portugal can benefit from a set of personal income tax exemptions or flat rates, depending on their income source, while those looking into incorporate a company can opt for the MIBC framework, allowing their business to benefit from Europe’s lowest corporate income tax rate, i.e. 5%.
auctor Miguel Pinto-Correia
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