Looking for help to finance your property in Portugal?
Make a real estate loan request with CAFIMO right now!From the nice weather to the local business opportunities, there is no shortage of good reasons to move to Portugal. But if you want to become one of the circa 10,000 American citizens residing in the country, you first need to ask yourself: Can you move to Portugal easily? And what are the steps required to move to Portugal as an American citizen?
In this guide, we will tell you everything you need to know to leave the U.S. and start enjoying the social, economic, and taxation benefits of residing in one of the most Expat-friendly countries in Europe.
Why Move to Portugal as an American Citizen?
- Cost of living: The cost of living in Portugal is significantly lower than in the United States. While the average monthly expenses in the U.S. sit at $1,784, the average monthly expenses in Portugal are just $712.
- Quality of life: Portugal is associated with a relaxed lifestyle, pleasant weather, and a rich culture, all of which can contribute to reducing stress and increasing happiness.
- Tax benefits: American citizens residing in Portugal can access several tax benefits, which we will explore closely later in the guide.
- Entrepreneurial opportunities: Portugal is extremely friendly to both foreign investors and entrepreneurs, with a strong remote-work workforce and growing industries in the fields of technology, renewable energies, and tourism.
- Healthcare and education: Portuguese residents benefit from stellar public healthcare and education systems, both of which can be accessed by American citizens. While American colleges cost an average of roughly $27,000 per year, attending public Portuguese universities has a yearly cost of around €1,000 ($1,115).
- Vibrant Expat community: Portugal is already home to a booming Expat community, so you will be able to find many other foreigners residing in the country. They can help you integrate the Portuguese culture, find friends, and navigate local legislation.
- EU citizenship: After residing legally in Portugal for five years, Americans can apply for citizenship and reap the benefits of being EU nationals, including complete freedom of movement in European Union countries.
How to Move to Portugal
Moving to Portugal as an American citizen requires having a valid visa (only EU/Switzerland citizens can relocate to Portugal without one) and fulfilling the necessary legal demands to enter the country. In many cases, both requirements are intertwined but, overall, the point of these bureaucracies is to show the Portuguese Government that:
- You're entering the country legally;
- You fulfill the basic conditions to support yourself in the country (accommodation, health insurance, and so forth).
As one of the five easiest countries to immigrate to in Europe, Portugal is as American-friendly as it gets. Navigating local regulations as a foreigner is always tricky, but the country also has many resources and institutions such as CAFIMO, designed to help Expats move to Portugal as quickly and effortlessly as possible.
Before exploring all the steps to moving to Portugal in detail, let's take a more general look at what is required to immigrate to Portugal and what's the best way to start the process.
What Are the Requirements to Immigrate to Portugal?
- A valid passport
- A valid visa
- A Portuguese tax number
- Valid health insurance
- A clean criminal record (issued by the United States)
- Proof of financial means
- Proof of accommodation
How to Start the Process of Moving to Portugal?
- Choose and apply for a Portuguese visa
- Find a place to live in Portugal
- Obtain a Portuguese tax number
- Register with SEF, the organization equivalent to the U.S. Citizenship and Immigration Services
Steps to Moving to Portugal as a U.S. Citizen
Leaving the U.S. and relocating to move to Portugal can feel scary and overwhelming at first, but it's simpler than most people assume. Here are all the steps you need to follow, conveniently listed in the most efficient chronological order:
1. Apply for a Portuguese Visa
Every citizen residing outside the European Union or Switzerland must have a valid visa to move to Portugal. This table shows the most common visas available; carefully review them and choose the one that aligns with your ambitions the most:
| Type of Visa | Who is it for? | Particular Requirements |
| D1 Visa | Americans with a job offer from a Portuguese company | – Employment contract – Proof of job qualifications |
| D2 Visa | Entrepreneurs and freelancers | – Business plan/proof of freelance work – Proof of financial means – Portuguese tax number |
| D7 Visa | Americans with proven passive income (mostly retirees) | – Proof of regular passive income – Proof of accommodation – Health insurance |
| Student Visa | Americans who want to study in Portugal | – University acceptance letter – Proof of financial means – Proof of accommodation – Health insurance |
| Golden Visa | Large investors | – Proof of a large real estate or capital investment/creation of a company that generates jobs in Portugal |
| Family Reunification Visa | Americans with Portuguese citizens as family members | – Proof of relationship – Proof of financial means – Health insurance |
The most common visas for moving to Portugal as an American citizen.
Once you have chosen the Portuguese visa most befitting of your social and economic status, it's time to collect the documents needed for your application. These vary from visa to visa, but the following are mandatory in most cases:
- Completed visa application form
- A valid passport, not expiring for at least six months following the application date
- Proof of financial means
- Proof of accommodation
- A clean background check, issued by the FBI and also known as a "rap sheet"
Finally, to apply for the visa, you just need to submit your application to a Portuguese Consulate in the United States. Portugal's consulate network in the U.S. covers 15+ cities and extends from New York to Honolulu.
Something to keep in mind: Due to its controversial role in the EU geopolitical context, the Portuguese Golden Visa may be subject to rule changes and even face the possibility of revocation.
2. Obtain a Portuguese Tax Number
Every Portuguese citizen is attributed a tax number after filing for their first I.D., but American citizens looking to move to Portugal must request one either in a physical Portuguese Tax Authority store or online. The Portuguese Tax Number is known as NIF, and it's the equivalent of the U.S. Taxpayer Identification Number (TIN).
Applying for an NIF before relocating to Portugal requires enlisting the services of a legal representative, i.e., a certified professional residing in Portugal who can act on your behalf. However, it pays off! After all, having an NIF is mandatory for doing things as crucial as opening a Portuguese bank account, starting a Portuguese business, paying rent, and signing a job contract.
To successfully obtain a NIF while still residing in the United States, you will need:
- A valid passport or civil identity document
- A residence permit
- A legally-appointed fiscal representative
- Proof of birth (applicable only to minors)
In some cases, obtaining a NIF is necessary even before applying for a Portuguese visa. D7 Visa applicants, for example, must associate a Portuguese bank account with their visa application, and opening a Portuguese bank account is only possible with an NIF.
3. Find a Place to Live in Portugal
Relocating to Portugal with temporary proof of residence (such as a short-term rental contract) is possible, but—considering how cheap real estate is—shouldn't American immigrants look for their own place? It's the logical step for American Expats after successfully applying for a visa and obtaining a Portuguese tax number.
To start, make sure you're buying a house in the right Portuguese city; the best places to live in Portugal include the largest cities, such as Lisbon and Porto, but also lesser-known locations that are quickly becoming hubs for American cities (with Funchal, Algarve, and Braga sitting at the top).
The next step is to find financing. Finding the perfect mortgage broker in Portugal can be tough, so the logical solution is to rely on the services of companies such as CAFIMO, specifically designed to provide real estate loan opportunities to foreign citizens looking to settle in Portugal. More than just a mortgage broker, CAFIMO streamlines the process of buying a house in Portugal as an American citizen, saving you time and money.
To reside in Portugal legally as a non-EU/Switzerland foreigner, you must also apply for a residence permit with the SEF. You can find all the necessary info in this official PDF form. Please don't forget that an SEF residence permit is mandatory for anyone who's been living/staying in Portugal for more than 90 days.
4. Fix Your Fiscal Situation
The U.S. fiscal system is based on citizenship, not residency. This means that, even though the United States and Portugal have double taxation treaties in place, Americans living abroad will still have to pay taxes to their home country. Naturally, these add up to the new taxes they will have to comply with in Portugal.
There are two main taxes all Portuguese residents, national or foreigner, must pay:
- Income tax, or IRS: The income of every Portuguese resident is taxed at anywhere between 14.5% and 48%, depending on the income level;
- Social Security tax: Every person who works or employs others in Portugal needs to pay regular Social Security contributions, taxed at 11% for workers and 23.75% for employers (both taxes are paid simultaneously, not one instead of the other).
If you're a real estate investor, you also need to pay a Capital Gains Tax, taxed at 28% even if you don't reside in Portugal. For real estate valued at over €600,000 (roughly $670,000), an additional wealth tax is imposed, with the following varying rates:
- Properties valued between €600,000 and €1 million: 0.7%
- Properties valued between €1 million and €2 million: 1%
- Properties valued over €2 million: 1.5%
Even though the Portuguese Government does want to raise its tax revenue with payments from Expat communities, it also wishes to attract foreigners to the country. To facilitate the entrance of talented newcomers (especially those covered by the D1 and D2 Visas), Portugal launched a tax program known as NHR.
The NHR Portugal offers tax breaks to American residents for up to a decade. The only caveat? You need to apply during your first year residing in Portugal to not miss the opportunity. Regarding the specific benefits of the NHR, these are the highlights:
- Exemption of Portuguese taxation for foreign income (this means, for example, that you may only have to pay U.S. taxes while residing in Portugal);
- A favorable, flat 20% tax rate for foreign employers working in high-value professions.
Finally, please keep in mind that Portugal, like virtually every other country, also has a Value Added Tax (known as IVA) varying from 6% to 23%.
5. Integrate the Portuguese Lifestyle
To truly excel as an American residing in Portugal, you need more than a house. Integrating the Portuguese lifestyle is, for the most part, pretty easy. More than half of the Portuguese population speaks fluent English, American culture is widely known and appreciated locally, and Portugal is home to many corporations and services of American origin.
Nevertheless, integrating the Portuguese culture and lifestyle will provide you with a richer experience and boost your professional ambitions. These are some of the things you can do to become as Portuguese as the famous pastel de nata:
- Learn Portuguese: While most Portuguese people understand English, they also value foreigners who take the time to learn the local idiom;
- Support local traditions: Portugal has a rich culture when it comes to street festivals, cuisine, and literature (among others). Familiarize yourself with the local traditions, and your Portuguese friends will be impressed;
- Build meaningful connections: This may involve, for example, participating in local communities, volunteering, or simply saying hello to your neighbors every morning (Portuguese are usually very friendly);
If you enjoy the experience of living in Portugal and feel like this could be the place you call home, you're ready for the final step of the process of moving to Portugal: applying for Portuguese citizenship!
6. Apply For Portuguese Citizenship
There are four ways of successfully applying for Portuguese citizenship:
| Citizenship Method | How long does it take? | Requirements |
| By naturalization | 5 years | – Proof of legal residence (minimum 5 years) – A2 Portuguese level – Clean criminal record – Proof of financial means |
| Through marriage | 3 years | – Proof of marriage – Clean criminal record |
| By descent | As long as the application process takes | – Direct proof of Portuguese lineage |
| By investment (Golden Visa) | 5 years | – Minimum qualifiable investment of €500,000 – Proof that you have maintained your investment for a minimum of 5 years |
Ways to apply for Portuguese citizenship as an American.
Once you have become a Portuguese citizen, you have completed all possible steps to move to Portugal, and you get to share all of the benefits enjoyed by born-and-raised Portuguese nationals.
Steps to Moving to Portugal (A Quick Summary)
- Apply for a Portuguese Visa: Portuguese visas are available for students, people with a job offer from Portugal, Americans with sufficient passive income (including retirees), entrepreneurs/freelancers, and people with Portuguese family members. For big-time investors, the Golden Visa can also be a viable option.
- Get a Portuguese tax number: Obtaining a Portuguese NIF is essential for doing stuff as basic as opening a Portuguese bank account or paying utility bills. You can get one online, even before traveling to Portugal, by finding a legal representative.
- Find a house: There are some constraints to finding a house in Portugal, but CAFIMO can help you navigate the entire process without a hassle.
- Understand Portuguese taxes: Know which taxes you must pay while residing in Portugal and, if possible, apply for the NHR tax program, which can grant you complete tax exemptions for up to 10 years.
- Become Portuguese: Don't just live inside the Expat bubble—make an effort to integrate Portuguese culture by learning the language, being an active community member, and experiencing Portuguese traditions.
- Apply for Portuguese citizenship: After residing in Portugal for 5 years, you can apply to become a Portuguese national.
Looking for the perfect house in Portugal?
Make a real estate loan request with CAFIMO right now!
