Not quite. A temporary GV permit doesn’t automatically make you a tax resident; a permanent GV permit, if there are any, doesn’t automatically make you a tax resident; a permanent residence permit does have residency requirements that effectively make you a tax resident. You are deemed to be a tax resident if you are there for more than 183 days beginning or ending in that year, so usually two years. Then you have to look at the treaty.
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The situation is likely to be the same in both cases: no capital gains tax in Portugal—unless you have registered your main residence in Portugal or spend the majority of the year in Portugal.
The 28% capital gains tax that was mentioned above would apply to Portuguese tax residents (natural persons).
However, I am unsure whether the tax residency of the SDIRA follows the owner or not. It’s possible (likely) that it remains tax resident in the US even if the owner moves abroad. That would mean that investing through an SDIRA would shield you from Portuguese capital gains tax even in the case you move to Portugal. But please verify this with someone familiar with international taxation issues of SDIRAs before relying on it!
Also, I think it’s possible that you get out of the whole PFIC taxation/reporting mess by investing through an SDIRA as opposed to directly. The same caveat applies: please verify before relying on this!
Of course, distributions from the IRA may be taxed wherever you are tax resident (Portugal or elsewhere).
So to summarize my understanding:
| Direct fund investment | Investing via SDIRA | |
|---|---|---|
| Capital gains tax in Portugal (non-resident) |  None1) |
None |
| Capital gains tax in Portugal (tax resident) |  28% for e.g. Optimize, IMGA, etc, 10% for many VC/PE funds2) |
None |
| PT tax on dividend distributions (non-resident) | Reduced to 15% by tax treaty1) 2) |
Reduced to 15% by tax treaty |
| PT tax on dividend distributions (tax resident) |  Taxable at Portuguese domestic rates (28% or marginal rates)1) 2) |
Reduced to 15% by tax treaty |
| US PFIC reporting/taxation | Applicable |
None |
| IRA distributions (non-resident) | N/A | Not taxable in Portugal |
| IRA distributions (tax resident) | N/A | 0-10% in Portugal under NHR, otherwise marginal rates for gains (principal may be tax free for Roth IRAS).1) 2) |
1) May be taxable in the US or wherever you’re tax resident.
2) May be claimed as a deduction on US/foreign tax (if any) on the same income.
Once again, please verify this with someone that actually knows this stuff before relying on it for your own tax planning!
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Below is what I read re: the minimum presence requirement to maintain PR status in Portugal:
- You must not be absent from Portugal for more than 24 consecutive months, or 30 non-consecutive months over a 5-year period.
- This means you do not have to live in Portugal 183+ days per year, but you do need to return regularly to maintain the status.
I don’t believe you are automatically a tax resident if you have permanent resident status because you’re not required to live there for more than 183 days per year.
So, construct a hypothetical timeline that has you in PT for 31 out of 60 months, not more than 183 days in a calendar year and less than 183 days in each 12 month period. And also be resident somewhere else. It’s really hard.
I see my blind spot now. In that case, I would try to maintain my GV and investment until I obtained citizenship to avoid becoming a tax resident. The path is now narrower, but clearer. Thank you.
There’s also the “GV PR” which maintains the minimum stay requirement of GV but also costs the same as GV per year when averaged out (assuming you didn’t invest in real estate—in which case it’s significantly cheaper to keep renewing the special D2 you got converted to). It may or may not allow you to sell your GV investment, depending on who you ask.
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That’s news to me, I’d assumed we wouldn’t be allowed to sell with the GV PR but I haven’t made any inquiries with lawyers about it. Does anyone have any experience with this?
I tried finding information on the GV PR and came up short. Is that when you maintain your investment and continually renew your GV? I couldn’t find anything about a unique GV PR status.
It’s briefly mentioned under Notas on this page:
Original Portuguese text
Aos e às titulares de Autorização de Residência para Investimento e seus familiares, que cumpram os requisitos previstos no artigo 80.º do REPSAE e requeiram a concessão de Autorização de Residência Permanente, será emitida uma Autorização de Residência para Atividade de Investimento Permanente, excecionando a este regime o previsto na alínea b) do n.º 2 e n.os 3 e 4 do artigo 85.º do mesmo diploma (cancelamento do direito por ausências de Portugal, cf. artigo 65º-K do Decreto Regulamentar 84/2007, de 5 de novembro, na sua atual redação).
A Autorização de Residência para Atividade de Investimento Permanente poderá ser alvo de taxas específicas de análise e de emissão, a regulamentar em sede de alterações à Portaria n.º 1334-E/2010, de 31 de dezembro, alterada pela Portaria n.º 307/2023, de 13 de outubro.
Holders of Residence Permits for Investment and their family members, who meet the requirements set out in article 80 of REPSAE and apply for a Permanent Residence Permit, will be issued a Residence Permit for Permanent Investment Activity, with the exception of the provisions of paragraph b) of no. 2 and paragraphs 3 and 4 of article 85 of the same law (cancellation of the right for absences from Portugal, cf. article 65-K of Regulatory Decree 84/2007 of 5 November). Article 85(2)(b) and (3) and (4) of the same law (cancellation of the right due to absences from Portugal, cf. article 65-K of Regulatory Decree 84/2007, of November 5, in its current wording).
The Residence Permit for Permanent Investment Activity may be subject to specific analysis and issuance fees, to be regulated by amendments to Ordinance no. 1334-E/2010, of December 31, as amended by Ordinance no. 307/2023, of October 13.
Here’s the text in the actual law:
Original Portuguese text
Artigo 65.º-K
Concessão de autorização de residência permanente a titulares de autorização de residência para atividade de investimento
Aos e às titulares de Autorização de Residência para Investimento e seus familiares, que cumpram os requisitos previstos no artigo 80.º do REPSAE e requeiram a concessão de Autorização de Residência Permanente, será emitida uma Autorização de Residência para Atividade de Investimento Permanente, excecionando a este regime o previsto na alínea b) do n.º 2 e n.os 3 e 4 do artigo 85.º do mesmo diploma (cancelamento do direito por ausências de Portugal, cf. artigo 65º-K do Decreto Regulamentar 84/2007, de 5 de novembro, na sua atual redação).
A Autorização de Residência para Atividade de Investimento Permanente poderá ser alvo de taxas específicas de análise e de emissão, a regulamentar em sede de alterações à Portaria n.º 1334-E/2010, de 31 de dezembro, alterada pela Portaria n.º 307/2023, de 13 de outubro.
Article 65-K
Granting of a permanent residence permit to holders of a residence permit for investment activity
Citizens who hold a residence permit for investment activity and their family members, who meet the requirements foreseen in article 80 of Law no. 23/2007, of 4 July, as amended, and request the granting of a permanent residence permit, will be issued a residence permit for permanent investment activity, with an exception to the regime foreseen in article 85(2)(b), (3) and (4) of the same diploma.
Looking at article 85, here is the relevant part (that don’t apply to holders of “GV PR”):
Original Portuguese text
Artigo 85.º
Cancelamento da autorização de residência
2 - Sem prejuízo da aplicação de disposições especiais, a autorização de residência pode igualmente ser cancelada quando o interessado, sem razões atendíveis, se ausente do País:
b) Sendo titular de uma autorização de residência permanente, 24 meses seguidos ou, num período de três anos, 30 meses interpolados.
3 - A ausência para além dos limites previstos no número anterior deve ser justificada mediante pedido apresentado na AIMA, I. P., antes da saída do residente do território nacional ou, em casos excecionais, após a sua saída.
4 - Não é cancelada a autorização de residência aos cidadãos que estejam ausentes por períodos superiores aos previstos no n.º 2, quando comprovem que durante a sua ausência de território nacional desenvolveram atividade profissional ou empresarial ou de natureza cultural ou social.
Article 85
Cancellation of residence permit
2 - Without prejudice to the application of special provisions, the residence permit may also be canceled when the person concerned absents themselves from the country without good reason:
b) Being the holder of a permanent residence permit, 24 months in a row or, in a period of three years, 30 months interpolated.
3 - Absence beyond the limits set out in the previous paragraph must be justified by an application submitted to AIMA, I. P., before the resident leaves national territory or, in exceptional cases, after they have left.
4 - A residence permit shall not be canceled for citizens who are absent for periods longer than those provided for in no. 2, when they can prove that during their absence from national territory they carried out professional or business activities or activities of a cultural or social nature.
As far as I can tell the law doesn’t specify any minimum stay at all, nor any requirement to maintain the investment. However, I am not sure how this is implemented in any regulations or internal AIMA guidance.
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Mais Habitação law does: for those converted to D2, including dependents, and those who then get GV PR, it says for all those categories the residence requirement is 7/14/14… same as GV.