Why Portugal should be the first choice for cryptocurrency investors?

Contributed by Global Citizen Solutions, 28 October, 2019

For some time now Portugal has been positioning itself as a hotspot for investment and innovation, and it's time that cryptocurrency investors take note.

Recent statements released by the government have clarified the official stance of cryptocurrency laws, going a long way towards cementing Portugal's place as one of the top countries for cryptocurrency traders and investors.

The Western European country also comes up on top in rankings for quality of life for expats and is also one of the cheapest places on the continent to live and buy real estate.

Cryptocurrency in Portugal is tax-free

The Portuguese authorities have recently clarified that the country's law officially follows EU regulation of cryptocurrency, which means that any gains from buying of selling cryptocurrency are not subject to value-added tax (VAT) as it constitutes an "on-demand, VAT-free exercise of services".

Portuguese tax residents are also exempt from Capital Gains Tax on any profit made from the purchase and sale of cryptocurrency. Foreigners can obtain Portuguese tax residency through the popular non-habitual tax regime. However, companies that are registered in Portugal are still liable to pay capital gains tax (between 28% and 35%).

A second passport can be an asset for cryptocurrency traders

Another scheme that should interest cryptocurrency traders is Portugal's Golden Visa program. The highly successful citizenship by investment program has resulted in EUR 4 bn worth of investment since it was first introduced in 2012. Since then thousands of investors and their dependents have obtained residence permits in Portugal.

In many countries all over the world, cryptocurrency is being subject to increasing scrutiny and stricter regulation. This can cause problems for investors, particularly during the coin mining process, and many ICO's (Initial Coin Offerings) will not accept investors registered in cryptocurrency-hostile countries such as the US.

Having another passport from a stable, cryptocurrency-friendly country such as Portugal makes sense as it provides investors with the added security of being able to choose to do business and pay taxes on terms that are more beneficial.

Investing in a second passport is investing in your future

One of the key benefits of Portugal's citizenship by investment program is the low "stay requirement" (the number of days required to maintain residency). With a stay requirement of just 7 days per year, investors in Portugal do not need to relocate from their home country in order to obtain a Portuguese passport. As long as the investment is maintained for 5 years, Golden Visa applicants and their dependents will be eligible for European passports.

Portugal also has a generous definition for dependents included in the scheme. This means that spouses and children up to the age of 18 or in full-time education can also be included in the application. This way investors can provide access to excellent healthcare and world-class education for their entire family.

Portugal is tax-friendly for foreign investors

Income tax in Portugal is paid on a sliding scale. However, foreign investors and professionals who move their tax residence to the country can benefit from the non-habitual tax regime (NHR), which can result in significant tax reductions and exemptions over a 10-year period.

Individuals who are deemed of high cultural or economic worth benefit from a reduced tax rate, or in some cases a complete exemption. This means that cryptocurrency investors who declare tax residency in Portugal may be able to monetize personal cryptocurrency profits exempt from capital gains tax.

Stable economic and political future

While other countries in Europe are experiencing times of political and economic turmoil, Portugal has a stable economic outlook and a government that is committed to encouraging innovation and incentivizing investment. This makes it an excellent choice for cryptocurrency investors.

Tags: currency | investment | Portugal |



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