Who are we?
LFT Advisors provides services in international business planning and structuring. Our team of lawyers, accountants, auditors, and tax advisors helps entrepreneurs effectively manage international projects, offering high-quality services and expert support at every stage.
What do we offer?
We provide all the services necessary for running a business in one place. We operate on a “one-stop-shop” principle, meaning you don’t need to engage multiple contractors or incur additional costs. We address the full spectrum of your needs, from company registration to obtaining licenses and opening bank accounts.
Why choose us?
Every step and action we take is done with respect and care for your money, reputation, and ambitions. We do not offer generic solutions— we create personalized tools tailored to specific tasks and needs of your business.
Collaboration process
- Initial consultation:
At this stage, we discuss your goals and business needs to determine what services are required. - Strategy development:
We analyze your current situation and develop an individual action plan focused on achieving your intended goals. - Implementation:
We take over all aspects of the process— from company registration to opening bank accounts, licensing, and taxation. - Support and guidance:
After successfully starting our collaboration, we continue to work with you, providing ongoing support, updates, and advice as needed. - Results evaluation:
Regular assessment of achieved results and adjusting strategies if necessary to ensure maximum effectiveness and reach your business goals.
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Why Portugal Attracts Foreign Residents
Portugal is a popular destination for newcomers due to its breathtaking landscapes, high standard of living, and favorable tax policies for foreign residents. For those considering relocation or already settled in Portugal, the Non-Habitual Resident (NHR) program offers a great opportunity to optimize taxes.
This article explores how the NHR program can help reduce your tax obligations, outlines who is eligible for this status, and highlights recent changes in the program’s regulations.
The NHR program was introduced to attract skilled professionals, entrepreneurs, investors, and retirees from abroad. The main advantage of this program is the potential for significant tax reductions over a 10-year period, making Portugal an appealing choice for those looking to minimize their tax liabilities.
Why is it profitable for businesses to work here?
Portugal is beneficial for business due to its low corporate tax rate of 21%, as well as special programs such as Non-Habitual Resident (NHR), which offers 0% tax on foreign income. The country is a member of the EU, which gives access to the single European market and simplifies international trade.
Portugal actively supports startups and IT companies, providing flexible conditions for their development, and attracts entrepreneurs with a high standard of living and a stable economy.
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1. Who Can Benefit from the NHR Program?
- Specialized Professionals: Individuals working in sectors such as IT, healthcare, engineering, and other designated professions.
- Entrepreneurs and Investors: Those running businesses outside Portugal and seeking tax benefits on international earnings.
2. Key Benefits of the Program
- The NHR program offers tax relief on a variety of income types, including pensions, dividends, royalties, and income from real estate. Due to Portugal’s double taxation agreements, these earnings may either be taxed in the country where they were generated or fully exempt from Portuguese taxes.
- One of the most attractive features is the reduced flat tax rate of 20% on high-earning individuals in Portugal, compared to the standard progressive tax rate which can go up to 48%. Moreover, Portugal does not tax capital or wealth, making it a particularly attractive destination for high-net-worth individuals.
3. Eligibility Requirements
To qualify for NHR status, you must meet the following criteria:
- You should not have been a tax resident in Portugal during the last five years.
- You must either live in Portugal for at least 183 days each year or own a property that suggests your intention to settle permanently in the country.
- Your application for NHR status must be submitted to the Portuguese tax authorities by March 31 of the year after you become a tax resident.
4. Avoiding Double Taxation
A major concern for foreign nationals moving to Portugal is avoiding double taxation. Portugal has signed double taxation agreements with over 70 countries, including most European nations, the USA, and Canada. These agreements ensure that income earned abroad may be exempt from Portuguese taxes if it has already been taxed in the country of origin.
5. Income Eligible for Favorable Tax Treatment
It’s essential to understand which types of income benefit from reduced taxation:
- Foreign Pensions, Dividends, Royalties, and Investment Income may be subject to lower taxes or exemptions depending on the relevant double taxation agreement.
- A preferential 20% tax rate applies to income from highly qualified professions such as science, technology, IT, healthcare, and other government-approved fields.
6. Recent Changes to the NHR Program
Several updates to the NHR program are effective from 2024:
- Tax on Foreign Pensions: Since 2020, foreign pensions for NHR holders are taxed at a fixed rate of 10%, replacing the previous full exemption to prevent abuse.
- Updated Eligibility for the 20% Tax Rate: The list of qualifying professions for the reduced tax rate has been updated. It is important to check if your profession still qualifies.
- Increased Scrutiny: Portuguese tax authorities are closely monitoring NHR status applications. Audits are becoming more common, focusing on ensuring that applicants meet the criteria and comply with income requirements.
7. How to Make the Most of the NHR Program
To maximize the benefits of the NHR program, it’s essential to approach the process with care and precision:
- Consult a Tax Professional: A tax advisor can clarify your tax obligations and suggest ways to minimize your liabilities under the NHR program.
- Ensure Proper Documentation: Make sure all necessary documents meet the requirements of the Portuguese tax authorities.
- Submit Your Application On Time: To enjoy the tax benefits from the start of the tax year, make sure your application is submitted within the designated deadlines.
The NHR program presents an excellent opportunity to reduce your tax burden and retain more of your income. Whether you’re planning to move to Portugal or have already settled there, it’s wise to seek professional advice to optimize your tax strategy.
Find out how to get a residence permit in Portugal through business: requirements, procedures and opportunities for your success
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