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July 8, 2019 - No Comments!

Immigration in Portugal: Breaking Records since 1976

Portugal is becoming more and more a residency destination for foreigners. This information is confirmed by the Immigration Authorities with the Immigration and Asylum Report, published on 28th June 2019, by occasion of the Service of Foreign and Boarders’ 43rd Anniversary.

According to the Report, the number of foreigners residing in Portugal continues to increase every year, with an increase of 13.9% in 2018, in relation to the previous year, which translates to an increase of 58,589 individuals in a total of 480,300.

The Government justifies this increase with the appealing factors that Portugal has, namely due to Portugal being a safe country. In fact, according to the Global Peace Index, Portugal is currently ranked 3rd as the safest in the world.

This position is justified by the increase investment of the country in policing activities and organization between the several different police forces, including the Immigration Authorities. It is also considered that the immigration increase shows that Portugal is an appealing country due also to its growing economy.

The majority of the foreigners residing in Portugal, in a percentage of 81%, are part of the working population, between ages of 28 and 44; again showing the growing economy in Portugal, and 68.9% resides in the boroughs of Lisbon, Faro and Setúbal.

Brazilians continue to be the leading nationality of foreigners residing in Portugal but there is a significant increase of other nationalities, such as Italians and French, and also Bengali, Nepali, Indians and Venezuelans.

Portuguese Nationality Applications have also broke the record of the past five years, as more than 41,000 citizens have requested Portuguese Nationality in 2018 only. From the same, it has been issued 32,414 favorable decisions.

This increase reflects the amendments of the Nationality Law from July 2018 that opened the scope for Portuguese nationality acquisition. In fact, this amendment reduced from 6 to 5 years, the legal residency period for foreigner applicants to become Portuguese. The acquisition of nationality based on residency is on the top applications, representing 70% of the same.

The issuance of new residency cards in 2018 has also suffered a significant increase of 51.7%, referring to 93,154 new Portuguese residents. In particular regarding the Golden Visa applications, the Report refers that in 2018 it were approved more than 3,000 new applications, with a total amount invested of € 838,532,935.27.

Considering the increasing numbers and also justifying the same, the Immigration Authorities have implemented and continuously worked during 2018 in integration friendly policies and simplified procedures in order to be able to assist all foreigners in Portugal.

Lisbon, 28th June 2019
By Catarina Ruivo Rosa, Associate at EDGE International Lawyers
For further information please contact: crosa@edge-il.com

July 8, 2019 - No Comments!

Tax Regime for Former Residents (Regressar Program)

The 2019 State Budget created the Regressar Program, designed for Portuguese emigrants and encouraging their return to Portugal by implementing tax benefits for the emigrants that meet the requirements set out by the Program.

In accordance with the added Article 12 – A-Tax Regime applicable to former residents - to the Personal Income Tax Code, former residents will have 50% of employment or self-employment income and business and professional income excluded from taxation if they meet the following cumulative requirements:

· Have not been considered Portuguese residents in the three years previous to 2019 or 2020;

· Were Portuguese residents before 31-12-2015;

· Become Portuguese tax residents in 2019 or 2020, in accordance with Article 16, number 1 and 3 of the Personal Income Tax Code;

· Have not applied for the Non Habitual Resident Program; and

· Have their tax situation in compliance with the Law.

This regime is applicable to the income earned in the first year in which the resident meets the requirements mentioned above and for the next four years, and ceases after the production of all the effects in respect to the residents who only meet the requirements in 2020.

This is a tax benefit with automatic effects, since its effects are immediately derived from the law by the simple verification of the respective requirements which means that it does not depend of any act of recognition by the Tax Authorities, and is made with the submission of the tax return.

Lisbon, 28th June 2019
By Geoffrey Graham, Senior Partner at EDGE International Lawyers
For further information please contact: contact@edge-il.com

July 8, 2019 - No Comments!

The relationship between units being used for short-term leases and the Condominium of the building

In an attempt to clarify and further develop the legal regime on short-term leases, new legislation has been approved to amend and substantiate certain aspects, with one of the most important being the relationship between the Condominium of the building and the independent units being used for short-term leases, due to the tensions that normally arise from these cases between those using the units for short-term leases and the remaining owners of units in the same building.

As such, it has been clarified that the Condominium’s General Meeting cannot decide to forbid the use of a unit for short-term leases. The only exception to this rule are units being operated as hostels in buildings for habitation, where it is necessary to first seek a decision from the Condominium’s General Meeting approving that use. For all other cases, the only thing the Condominium can do is have owners who represent at least more than the majority of the percentage of the building decide that a unit should not be allowed to do short-term leases, so that this is conveyed to the President of the City Hall, who will decide whether or not the short-term leases should be prohibited. However, in order to decide this, the Condominium needs to allege specific facts that took place for a continued period of time and which disrupted the rest and well-being of the owners of units at the building and/or affected the normal use of the same.

The Condominium, based on the fact that some units for short-term leases may use the common parts of the building more than the owners ot the remaining units, may decide that the owners of the units being used for short-term leases must pay an amount towards the use of the common services of the building up to 30% more than the yearly condominium fees that those owners already have to pay. However, for short-term leasing units which were already in business at the time this new law came into force, the Condominium can only approve the above mentioned 30% starting from November 2020.

Lisbon, 4th July 2019

By Rodrigo Noronha Mourão, Associate at EDGE International Lawyers – Litigation Department

For further information please contact: rmourao@edge-il.com

July 8, 2019 - No Comments!

Important changes to the regime of transfer of business

With the purpose of a better understanding of the legal concepts, the Law now defines economical unit as well as the contractual acquired rights which now should include not only remuneration, basic salary and its complements, but also social benefits paid by the employer. As a result whenever there’s a transfer of business affecting employees, the news is that the employee shall be entitled to maintain the rights in which social benefits are included.

Another relevant change is the right of opposition of the employee which now is established in the Law. The employee which contract is supposed to be transferred is given a period of 10 days after notification of such a transfer by the employer to oppose. This period is in fact a 5 days’ period to create an ah hoc commission to represent him/her in the negotiations, as well as another 5 days’ period to formally oppose in writing if that’s the employee’s decision.

In case opposition is filed by the employee, the employer cannot transfer such a contract to the transferee and in such case if there is termination of contract by the transferor, the general rules of unfair dismissal and respective compensation rights shall apply.

Also in the package of new changes to the Law we can highlight the new period of 2 years (previously it was of 1 year only) during which both the transferor and transferee can be found jointly liable for any claims which arise from the transfer of contract.

Lisbon, 26th June 2019
By EDGE International Lawyers – Employment Department
For further information please contact: cpovoa@edge-il.com

 

May 30, 2019 - No Comments!

Brexit and what it means for British residents

After the UK referendum vote to leave the EU nearly three years ago on 23 rd June 2016, the exit date had been fixed for 29 th March 2019 under Article 50 of the Treaty of the European Union. Since then the deadline has been extended with the agreement of the EU
member states to grant a flexible extension of the Article 50 until 31 st October 2019. In
addition, on 31 st December transition period is due to end.

The UK Government published 2020 is the its Brexit White Paper explaining all
proposals for the future relationship between the UK and the EU and lays out five key areas
on which to focus including the economy, communities, the union, democracy and the UK’s
place in the world.

On 21 st February 2019 the Portuguese Ministers Council published the Draft Brexit
Law Proposal, designed to address the legal vacuum which would be created if the United
Kingdom left the European Union with no deal. Just over a month later, on 28 th March 2019, the Brexit Law number 327-A/2019 was approved. This Law has focussed on residency rights and the preservation of them.

Between the publication of the draft law and the final law some changes have
manifested themselves, specifically in relation to the exemption from the requirements and
supporting documents required for residency permits, which stipulate the rules applicable to third country nationals (Law no.23/200). This exemption was specifically mentioned in the draft law and applied to all British citizens as well as their family members. However the
new law states that the exemption only applies to British citizens and their family members
who have obtained a temporary residency permit and wish to renew it or who wish to obtain a permanent residency permit within 5 years of the date they established their residency in Portugal.

The good news for British citizens is that the interpretation given by the Portuguese
Government and the Portuguese Immigration Authorities (SEF) indicates that current
residency documents remain valid until the end of 2020 after which that United Kingdom
nationals will be issued with new documents by SEF. In addition, they will be exempt from
complying with third-country requirements when they renew their residence documents,
even if they do so after 2020.

Other practical issues include health care, and Portugal will not suspend the access
to healthcare, even if the UK does not create a similar regime for the Portuguese citizens
residing in the UK. Therefore residents will continue to have uninterrupted access to the
State healthcare system (SNS) and visitors, up to the transition period due date, will also
have access by showing their valid passport (even if they do not have insurance they will
only pay normal user fees and later UK will be invoiced with treatment charges). On other
hand, UK nationals living in Portugal up to the date of leaving the EU will have until 31 st
December 2020 to exchange their UK driving licence for a Portuguese one.

Lisbon, 5th June 2019
By Geoffrey Graham, Senior Partner at EDGE International Lawyers
For further information please contact: contact@edge-il.com

May 24, 2019 - No Comments!

Recent changes in the Portuguese Legal Regime governing lease agreements for housing

There have been recent legislative changes in the Portuguese law governing lease
agreements, which are aimed at giving additional protection to tenants and promote the
rental market and its stability.

In terms of lease agreements for housing, some of the most relevant changes include:
• Lease agreements must now have a minimum duration of 1 year and cannot go
beyond 30 years, save for temporary cases, such as professional, educational and
touristic purposes, where they can be signed for less than 1 year;
• Unless the parties stipulate otherwise, lease agreements with an initial duration of less
than 3 years are now automatically renewed for a further minimum period of 3
years;

• If the landlord opposes to the renewal of the lease for the first time, this opposition
only produces its effects 3 years after the lease agreement has been signed (even
if the contract was signed for a duration of less than 3 years), except when the
landlord or his first line descendants need the property for their own housing;
• While before, the landlord could claim an additional compensation of 50% of the
amount due from the tenant, should there be outstanding rents, this compensation
is now reduced to 20%;

• While before, the landlord could claim payment of the rents against both the tenant
and the guarantor, provided that he/she had notified the tenant of the amount of
outstanding rents in advance, the landlord must now also inform the guarantor in
advance, before being able to claim payment of the outstanding rents from the
latter as well;

• In cases where there is no written lease agreement, and provided that this situation is
not attributable to the tenant, the latter can now prove the existence of the lease
by showing the use of the property without opposition from the landlord, together
with the payment of the rent for a minimum period of 6 months.

• When the lease agreement has indefinite duration, the landlord must now give a pre-
notice of 5 years (as opposed to the former 2 years) to the tenant, from the date

on which the lease will end, and must confirm this termination notice to the tenant
again between 12 to 15 months from the date on which the lease will end.
• While before, if the tenant passed away, the lease would only pass onto the civil
partner and/or cohabitee who lived with him for more than a year, if they also lived
at the leased property for more than a year, this last requirement is now abolished,
meaning that the lease will pass onto the civil partner and/or cohabitee, provided
that they lived with the tenant for more than 1 year, even if they lived at the lease
property for less than that period. As for the tenant’s spouse, the situation remains
unchanged, meaning that, should the tenant pass away, the lease will pass on to
the spouse, as long as the latter already lived at the lease property, regardless of
the period.

Lisbon, 24th May 2019
By Rodrigo Noronha Mourão, Associate at EDGE International Lawyers – Litigation Department
For further information please contact: rmourao@edge-il.com

May 24, 2019 - No Comments!

Worsening of the IMI applicable to vacant premises

The XXI Government has recognized, within the framework of its political priorities, the importance of housing and rehabilitation in order to improve the quality of life of the
population.

In order to fight the lack of availability of real estate, mainly in areas of the country where
there is greater difficulty in accessing housing, a new law came into force, giving the
possibility to the municipalities to increase significantly the rate of the property tax for
vacant premises located in “urban pressure zones”, that consist in areas where the
demand is much greater than the supply or in areas where people's financial capacity is
well below the market values.

Under the Portuguese legislation, it is already stipulated in the Property Tax Code an
increasing taxation for vacant premises for more than an year, increasing annually the
current rates of the IMI Tax, that vary between 0.3% and 0.45%, up to the triple.
For the vacant premises located in “urban pressure zones”, the municipalities can
increase, from the second year that the property is vacant, up to six times the current
rate of the IMI Tax and after that, 10% for consequent years, up to the maximum of
twelve times the current tax rate.

In conclusion, the Government felt the necessity to create a complementary instrument
that was made available to the municipalities in order to increase housing supply and
regulate the real estate market, by penalizing the non-availability of existing properties.

Lisbon, 24th May 2019
By Denisa Burlacu, Legal Executive at EDGE International Lawyers
For further information please contact: taxrep@edge-red.com

May 20, 2019 - No Comments!

Social Benefits of Residency in Portugal

The Golden Visa program in Portugal, through which any non-EU citizens are eligible to
obtain residency in Portugal through a qualifying investment, has raised awareness to
the many benefits of having a residency permit in Europe, from traveling freely in the
EU/Schengen Area to getting preference in various services. Notwithstanding, there are
several advantages that are often not mentioned when “selling Portugal”, and that may
be key when making the very important decision of choosing a country to live in.
In view of this, we take the opportunity to point out the most relevant social benefits of
obtaining residency in Portugal.

Firstly, having legal residency in Portugal grants its holder to be registered at Serviço
Nacional de Saúde, i.e., the country’s free and universal healthcare service. Portugal is
served of very comprehensive and well-equipped healthcare services throughout the
entire country, and currently ranks 22nd in the world in this field.

Another social advantage granted to legal residents in Portugal is access to free
education, including at a University level. This will also allow one to benefit from several
European interchange programs, such as Erasmus and others, allowing non-EU citizens
to study in any country of the EU/Schengen Area. Currently, our education services hold
24th place in PISA rankings.

One will also be able to be registered at Portuguese Social Security and obtain
assistance and social subsidies in the event of illness, pregnancy, unemployment, etc.
Lastly, and perhaps the most important social benefit of all, it is sunny in Portugal 300
days out of the year.

Lisbon, 20th May 2019
By David Oliveira Duarte, Associate at EDGE International Lawyers – Foreign
Investment & Tourism Department
For further information please contact: contact@edge-il.com

July 17, 2018 - No Comments!

Changes to the Law of Nationality

The Portuguese Parliament has approved relevant changes to the general Law of Nationality easing up the requirements for obtaining the Portuguese nationality. These changes have been published in the Official Gazette on 5th July 2018 and are now in full force.

Some of the most relevant changes to the law, include the reduction from 6 to 5 years for the minimum period of residency to obtain nationality and also the automatic nationality for children born in Portugal with parents that have been residents for at least 2 years.

Regarding the reduction of the time of citizenship, article 6, number 1, paragraph b), establishes that the Portuguese Government will grant citizenship for foreigners that have been resident for a minimum of 5 years.

As to children born in Portugal, article 1st, number 1, paragraph f), grants nationality to individuals born in Portugal, children of foreign parents, when at the time of birth one of the parents has legal residency for at least 2 years.

The Government will now implement the necessary changes to the Regulation of Nationality.  The changes should be decided within 30 days from the approval of the changes to the Law of Nationality.