Portugal is fast becoming the number one country for anyone involved in crypto, especially long-term investors and retail traders. Official statistics clearly show that immigration to Portugal is growing a lot year after year, and a good chunk of these expats are young people below the age of 40.
Since writing the original version of the article, I’ve personally received a ton of emails from people who have moved to Portugal or are in the process of moving so, with a lot of these people having some involvement in crypto. I think this is extremely exciting for the crypto scene in Portugal and the country in general. Becoming a haven for people involved in this new revolutionary technology can only bring positive effects to Portugal and its citizens.
Do you want to cut straight to the chase and know for sure if Portugal is the right place for you to move to? Schedule a consultation with my trusted Portuguese crypto lawyer to get all your questions answered.
Book a consultation with a Portuguese lawyer
Alternatively, are you still undecided about where to live or want to speak to me directly about crypto or other topics that I write about?
People involved in crypto tend to be forward-looking and risk-tolerant, and they are also likely to have made some good gains and now amass a healthy net worth. This means that they will be spending more money in the local economy, as well as inspiring the people around them to learn more about finance and investments. They will also probably want to diversify their investments, and I bet that we will be seeing a lot of these people starting new businesses in Portugal. I expect to see more modern cafes, international restaurants, and startups, all fueled by the new expats.
See also: The Best Crypto Trading Apps in 2023
For those of you who have never visited Portugal, here’s some background.
Portugal is a member of the European Union and sits right on the Western edge of Europe, bordering Spain. Its climate is generally similar to Spain but it sits on the Atlantic coast, which means that its seas are wavier and colder, which makes it a surfers’ paradise.
The population sits at around 10 million, healthcare is ranked among the best worldwide, the local population is considered to be very friendly and one can feel safe in the streets. There are very low levels of crime. One should consider that Portugal has gone through a very tough period in the past twenty years as it didn’t perform well economically. This led many of its younger people to leave and seek better conditions abroad. The NHR program is actually a countermeasure to try and restore things by making the country once again very attractive to expats and Portuguese who had emigrated years ago.
The NHR programme and a host of other related laws are now having the desired effect, and are a great example of how a country can pick itself up from the ashes and thrive against the odds by supporting freedom and innovation.
Portugal is one of the few countries that is forward-looking and is encouraging the immigration of high-net-worth individuals, investors, and entrepreneurs. This will result in these people having a positive effect in the local economy by spending their money within Portugal. Not only that, they will bring new and bright ideas, and will start new businesses in the country.
See also: Lisbon vs Barcelona
This attitude is in stark contrast to the neighboring country, Spain, which has gone out of its way to punish local and foreign entrepreneurs who want to start new businesses and help the economy. It’s a real pity to see the political situation in Spain at the moment, but hopefully, the politicians will eventually see that the Portuguese model works better and switch course.
The big attraction of Portugal, apart from its beautiful cities, nature and friendly English-speaking (for the most part) population, is the NHR programme. If you qualify for the NHR, you can get foreign dividends tax-free, and there are also allowances for specific types of professions/jobs that can also get their foreign income at 0% tax.
Requirements for NHR
You don’t have to live in Portugal during the whole year to be an NHR. The NHR (non-habitual resident) program, allows citizens from is attractive to professionals, pensioners, investors and entrepreneurs who want to enjoy a life free of income tax. The government of Portugal offers tax benefits to everyone, with a unique advantage: no minimum stay requirement in the country.
You only have to meet one of the following requirements:
- Stay for a minimum of 183 days in the country, whether interrupted or continuous
- Have a house available and have “intention” to live there
- Be a member of a Portuguese ship or aircraft crew
- Have a spouse or children in the country
- Be employed overseas by the Portuguese state
How Crypto Tax Works in Portugal
The crypto space is getting more and more complex over time with the introduction of staking, lending, DeFi, NFTs etc, and each of those needs to be considered carefully. Investors are no longer solely interested in simply buying and trading the big cryptos (Bitcoin, Ethereum etc.) I will keep expanding the information below based on my own research and discussions with Portuguese tax experts.
For now, let’s start with the treatment of crypto sales, which is what the majority of investors are interested in. Basically, we need to understand how the profit on sale of crypto is treated in Portugal. In most countries, this is treated as capital gains and taxed accordingly. What about Portugal?
Simply said, pre-2023, crypto trading in most cases was tax-free due to a loophole in the tax system. As from 2023, crypto trading gains will be taxed at 28%.
While crypto trading is no longer tax-free, one can still use the NHR programme to create a very advantageous structure and lower the overall level of worldwide tax suffered. Read my article on European tax structures for more information on that.
Inheritance Taxes
There is no precedent, specific rules or particular approach regarding the treatment of cryptocurrencies for the purposes of estate planning and testamentary succession in Portugal.
Notwithstanding, certain aspects of estate planning and testamentary succession should be highlighted. Inheritance tax does not exist in Portugal, but stamp duty may apply to certain transfers of certain assets (e.g. immovable property, movable assets, securities and negotiable instruments, provided they are located, or deemed to be located, in Portugal) included in the deceased’s estate in case of succession.
However, in the absence of a legal amendment or binding information from the Portuguese tax authorities, it may be argued that the drafting of the relevant legal provisions does not expressly foresee assets such as cryptocurrencies, thus excluding the same from the scope of application of stamp duty, which de facto mitigates the need for estate planning with respect to cryptocurrencies. Estate planning and testamentary succession must therefore be analysed on a case-by-case basis, considering all variables involved.
VAT
In a 2019 official ruling, the Portuguese Tax Authority confirmed the precedent from the Court of Justice of the European Union (Case C-264/14, Skatteverket v. David Hedqvist) to argue that although cryptocurrencies such as Bitcoin were analogous to a “means of payment” and therefore subject to VAT, they were exempt by application of VAT exemption rules, which should be consistent across EU Member States considering existing VAT EU harmonization.
Get in touch with a Portuguese crypto tax lawyer
How to Buy Bitcoin in Portugal
You can use the world’s best crypto exchanges in Portugal without any problem, there are no limitations imposed by the country or by any of the big exchanges.
My suggestions would be to use any of the following:
For those of you who are more advanced traders, the platforms you’re accustomed to will also work in Portugal:
- Deribit – best platform for crypto derivatives (see my review)
- PrimeXBT (see my review)
- Bitfinex
- Bybit
You can also use crypto borrowing and lending platforms such as Nexo and YouHodler without any problems.
Keep in mind that you will still need to keep good track of your crypto trading activity even though it might be tax-free. I suggest you use a tool like Cointracker for that. Check the other options in my article about crypto portfolio and tax preparation tools.
Crypto-Friendly Banks in Portugal
Please leave a comment if you have found a suitable crypto-friendly bank in Portugal. You can also have a look at the best European crypto debit cards that work in Portugal.
Buying Property with Crypto
Some real estate sales in Portugal have already been done using crypto. The most famous case is this one. I expect this to become more commonplace given the number of crypto people moving to Portugal.
Contact me if you want to buy property with crypto; I’ll put you in touch with my agent.
Golden Visa Investments
If you’re looking for good golden visa-related investments, I can put you in touch with a fund that invests within Portugal, and with an architecture firm that creates homes targeted directly towards satisfying the requirements of getting a Golden Visa. Just get in touch and I’ll put you through.
Participating in the Portuguese Crypto Community
You can follow this Twitter list that features many of the big crypto players that are based in Portugal. Please let me know about other crypto players and communities in Portugal by leaving a comment below or by contacting me.
Hard Fork Cafe is a cool YouTube channel dedicated to crypto, although you need to understand Portuguese for that. It’s a good way to practice learning the language though if you want to hit two birds with one stone.
There are lots of purposes and utilization potential for the cryptocurrency projects and the overall blockchain tech from fast & secure transactions to wider use in the medical field for example or supply chain sectors, banking & fin tech, etc… The potential is enormous and we are still in the early development, testing, utilization & adoption stages. There is still lots of room to grow, progress and more innovation to happen. The crypto universe & blockchain tech will keep growing, transforming and developing rapidly over the next 7-10 years, there will be lots of new projects, utilization and faster adoption with $10+ trillion crypto market cap potential.
What the G20 economies need to do is to adopt crypto-friendly regulations and legal frameworks and facilitate its adoption into the mainstream financial sector. The crypto universe is here to stay with us and the EU with MICA Act has proven that it will create a universal EU legislation, which will in fact help facilitate faster crypto adoption rates % among citizens and growth of the crypto & blockchain start-ups across the EU territory. Other countries need to follow the suit.
So the 2 crypto ,,friendly” banks in crypto friendly Portugal do not let you to cash out from exchanges , in the case of Santander bank , or , in the case of Millenium bank you need a ,,friendly relationship ” with the manager !!?
Does it mean you have to bribe him ? What percentage ?
Like everywhere else in the EU , nothing is clear about tax laws , the bureaucrats can drive you insane with useless paperwork , different gov offices give you different info , they re just justifying their miserable lives by making your life harder.
Very soon you wont be able to withdraw your money if you re not vaccinated.. Read it here first !
Hi Jean,
Thanks for the information, really appreciate it! Can you recommend a good tax lawyer/consultant in Lisbon? I am truly considering moving to Portugal in the next few months but would need to figure out all the details about crypto taxation. Happy to share my experience afterward, if everything works out.
🙂
You’re welcome and yes, as I mentioned in the article, am happy to help put you in touch with lawyers. Please fill in the form and I’ll put you through to the best lawyer I know.
regarding: “From the information I have so far, it seems that Santander and BBVA both play nice with crypto exchanges.”
My €-transfer from a crypto exchange to Santander was sent back to the crypto exchange (all this back & forth took around 3 weeks). On the Santander Hotline they told me that “No portuguese bank will accept € from a crypto exchange as those are the regulations”. On the other hand in “crypto-unfriendly” countries banks have no problem with € from crypto-exchanges. Weird, that Portugal counts as “crypto friendly”. I guess that all successful transfers were made from still yet unblocked/unknown/small exchanges. Anyone to comment on this?
Millenium have accepted euros from exchanges in pretty substantial amounts. You need to make sure that you alert the bank manager and ideally have a relationship built up before you make any transfers. This applies to any bank at the moment, not only in Portugal.
Hi Jean – I just opened an account with Millenium BCP (from abroad, through BORDR) and was told (via email) from my account manager that they do not accept euro from any crypto exchange. I’m struggling with this because I had gone through this process specifically to be able to access funds when I landed in Portugal later this year. Any advice on how I should proceed or what other banks I should reach out to? Thanks
Just to update: after talking to Millenium extensively, they went and asked their Compliance department and got back with 1) they support fiat withdrawals from cyrypto exchanges and 2) for larger amounts you need to prove that the money came originally from your source of income.
I’m still trying to understand exactly what that second part means, but overall it’s positive.
Thanks for the update Ian, that’s in line with what I’ve been told.
Tax on crypto could be an increasingly hot topic for the coming months.
May be helpful to see also someone’s personal experience dealing with the Portuguese Tax authority after depositing from a crypto exchange.
Reading many people are addressing the most popular concerns like:
” So if you want to come to Portugal to cash out your crypto tax free it aint gonna happen. They will consider you as a professional trader if it is your only income or if it is substantial income. Am I right?”
Reading on the internet (few, non official sources though)
It looks to me that the classification of “professional trader” (for which Crypto tax is not free) may be on a case to case basis.
Also, seems entirely at discretion of the tax officer due to the undefined / broad definition of “professional” classification of a professional trader for the crypto industry.
In this view, if your bigger source of income / bank withdrawal in PT is Crypto ( nearly 100% ! )
the tax office has all the power to send you a large tax bill.
Similarly, if you do it regularly they also have the power to decide you are “professional” therefore to be taxed.
I currently don’t know:
If this is the approach, if the bank will report any income to the tax office or over a certain amount or the interests only.
If the Tax office will request to look any trading records from you of the platform you use, then decide with the above criteria.
Best way forward could be:
Check the recent official font of information
Check personal experiences
Inquire with the Tax office directly
I will try to get some more info as well
I was very surprised to read about the Crypto-Friendly Banks in Portugal. it makes life easy for the bitcoin trader. Also, what do you think about the regulation concerns over cryptocurrencies across the world?
Hi Jean, I read your article about Portugal being the most crypto friendly nation in Europe and Santander as the most friendly crypto bank in the country. Do you know which branch should I open the account at? I talked to a few branches and they said they don’t work with Bitcoin exchanges and the transfers might be blocked. Any information is gladly appreciated!
Try Millenium bank instead and see what they say.
bad experience with Millenium, they block transfers to exchanges. perhaps considering what’s happening at the time i’m writing but nonetheless angry because they don’t let users do what they want with their own capital!
Hi,
Do you need to report crypto income on your Portuguese annual return at all even if non-taxable or can you withdraw the money on an account and never bother telling the Portuguese Tax Authorities?
Hi there,
Thanks for sharing your blog document it’s extremely helpful.
Just reaching out for a bit of help. Myself lives in Australia with my partner I have a British and Australian passport, my partner has Australian and Portuguese.
My question is, we wish to send our crypto to Portugal to binance and then withdraw to her Portuguese bank account.
Do you have any idea if this is possible, Will there be tax implications or is it as easy as it sounds? We wish to leave this there to pay for future trips and our wedding in the future?
Any help would be great.
Cheers. !
Great content, thank you for that! Although, I didnt quite understand how would staking, farming rewards be taxed/not taxed. As I understood it would fall into category E. So is there a tax on that or not?
Also, do you know if you still need to declare transactions that happened during the year, i.e. crypto to crypto, crypto to fiat?
Hi Jean, first of all congrats for the quality of your articles! I’m a crypto retail investor since 2017 and I’m actually worried for the incoming DATF proposals, their impact, and the general clamping down in the crypto world.
Does it make sense for me to evaluate the NHR program in Portugal?
Welcome Luca, and yes I would say it makes a lot of sense. Lots of crypto people are moving to Portugal.
Great blog and information!
We are EU citizens who arrived in Portugal a few months ago and have already set up our NHR status, as we have an overseas company which will pay us dividends, so they are tax free.
As we look to delve more into crypto, would we not be better setting up a crypto company outside of Portugal (eg Malta or Ireland) with very low or zero corporation tax and then pay dividends from that company to ourselves in Portugal?
Just another approach we have been considering?
Thanks!
Yes, that is definitely the way I would recommend doing things. In such a case, you would lock in a guaranteed low taxation rather than depend on the Portuguese law regarding taxation of crypto which is likely to change in the coming years and would probably bump up taxation to 28%.
@Nigel @Jean I was exploring the option of an offshore company as well (Malta, Cyprus, Bulgaria etc.) But most experts told me this would not work as the company would become taxed in Portugal because all “substance” and management is found there.
Do you have a good solution to share?
The safest option seems to be the Unipessoal Limitada, which is tax transparent, hence all profits are taxed at only 20% for 10 years. Overall good deal imo.
@Jean @John
I have been told a little different from speaking to a tax lawyer. Yes there is a risk that if you just have a ‘shelf’ company abroad and manage everything in Portugal, you could be taxed at the 20% (still not bad!) under NHR and PT sourced income, as it is determined that in fact Portugal is the centre of the business.
However to safeguard this if you were questioned on it, you would appoint a local director (I believe that companies offer this as a secretarial service) in the country of incorporation and have the AGM in that country with documented minutes.
On top of this too, you can travel maybe once per quarter / 2 x per year to that country for a meeting or some professional development relevant to your business operation – also showing that the major decisions and professional expertise that runs the company is not in PT.
Just some ideas that could help protect and manage the setup – and what a bummer if you have to go to somewhere like Malta 2-3 times per year!! 😉
Cheers
That is accurate information Nigel, and that’s what happens in practice. Both of you are correct, however, and I even spoke about this issue in my article about the best European tax structures.
Ultimately, from my experience, the vast majority of companies opening up in tax-friendly jurisdictions have little reason to be doing so besides the tax advantages. There are exceptions of course, and sometimes the tax advantages are the initial hook only. Sometimes it’s about the tax advantages plus the legislation (for example the online casino and gambling companies operating in Malta). Keep in mind that most people have almost zero knowledge about countries like Malta, Liechenstein, Cyprus, Luxembourg etc. Throughout the process of research and after getting enticed by the tax law in any of these small or emerging countries (Bulgaria as another example), they might realise that, for example, the quality and cost of labor in such country is really good, and it would make sense for them to relocate part of their operations even if there weren’t any tax advantages in play. This ultimately makes it a big win for medium to big companies as they end up lowering their tax bill as well as also lowering their salary expenditure or improving their operations by such a move.
For smaller players this rarely is the case, especially for solopreneurs who have no need or intention to hire people in the country where they intend to incorporate. This is what John, like many other freelancers and solopreneurs, had in mind. For such cases, ultimately it’s a question of risk tolerance. The theory says that such a setup would not work as the company is actually managed and operated from another country. However, in order to counteract such an eventual argument, the solution is, as Nigel mentioned, to appoint local directors, rent offices, have the AGM in that country, and a host of other steps one can take to improve the looks of the setup. This is an open secret, and as Nigel mentioned, many companies in Malta, Cyprus, etc. actually offer such services (directorships, office space rental, mail management and forwarding, etc). The tax authorities in most countries have a limited budget and the chances of them going after such setups are quite low, in my opinion. They would have to dedicate resources to investigate the resident’s affairs plus his company ownerships in other countries, which is not a very straightforward task. They will be looking at how likely it will be that they will win the fight to relocate the company’s taxation, as well as the potential revenue in terms of extra taxation that their employer (the tax authority) will gain. It doesn’t make sense to go to any trouble for small amounts.
In practice, if you look at real cases, they’re either involving big companies when the “lost” tax revenue runs into the millions, or it’s quite an obvious case. What would be an obvious case? Well, imagine you’re a rich and famous personality and paparazzi are following you around on a daily basis, hence it is easy to understand where you’re really living and operating from. Let’s say that you now decide to open a company in a low-tax jurisdiction to channel some of your revenue from there. If this comes to light, it is likely that the general population will be angered by the move and it becomes a tabloid soap opera, whereby the tax authorities have all the incentives to enter the fray and not only recoup the lost tax but also send the message to the general public that they are doing a great job at curbing tax evasion. There are a number of famous cases of this sort involving the world’s richest and most famous football players, including Ronaldo and Messi. Even then, where one would think the outcome should be obvious, we see tough and protracted cases where the outcome is uncertain. In such cases, the tax authorities have an ace up their sleeve, in the fact that they know that any court appearance (even if the case is unjust) will damage the personality’s reputation, hence they are likely to use that to their advantage to ultimately cut a deal with the accused person, even if they know the chances of them winning the case in court are slim. I’ve seen a particular case of this type, whereby a TV personality was basically bullied into an out-of-court settlement in order to avoid being dragged to court and thus have his TV career cut short.
To recap, we live in a world where very few things are black or white, it’s all about shades of grey and you need to do a lot of independent thinking in order to arrive at the best solution.
Hi Nigel! Which jurisdiction do you recommend for such a crypto company?
Hi John
I am not too sure at this stage, I have been recommended Malta, but have also been looking at Ireland and Estonia for low corporation tax – I just need to explore if they are crypto friendly too.
You also need to check they have a DTA with Portugal and not on the tax haven black list otherwise you will be taxed as if the income was earned in PT.
Malta works fine with Portugal, it’s one of the most commonly used structures with NHR.
Hi – this is a really interesting approach. I have a few questions if I may:
1. In terms of setting up the company *say in Malta) would there have to be a transfer of crypto assets from one personal account to a corporate account, e.g. if held on a exchange, would you set up a new corporate exchange account and transfer all across from your personal exchange account etc? I’m asking this as someone who has been in crypto a few years so would theoretically be quite a lot of moving if that was the case.
2. In terms of dividends payments would you therefore need to convert and withdraw to USD/EUR with a bank in Malta and then transfer funds to a Portuguese account and then due to NHR these are not taxable (only in Malta as corporation tax)?
3.was NHR status easy to get? Do you require to be employed while entering Portugal, or can you get one on your previous roles/skillsets (I am in software development, but may not have employment when moving to Portugal)
Any information would be greatly appreciated.
Regards
Hi Nigel, did you ever go through with this?
Question I have are..
– would you transfer your crypto assets from your personal crypto account and add them as assets to the (for example) Maltese business (new crypto account)?
– Furthermore, would you then not have to also investigate where to get a crypto friendly Maltese bank and then do transfers from it to your portuguese bank.
Looking forward to hearing how you have progressed.
Thanks
For all the people asking and worrying whether they could/might be considered a trader and thus having to pay taxes on crypto: when in Portugal, establish a personal LLC (Unipessoal Limitada, Uni. Lda) and pay yourself minimum wage +-650 euro (no IRS, only social security payments. You now have a main activity, you are not a trader and all gains from crypto are not taxable. For further “insulation”, keep all your crypto and fiat outside of the portuguese banking system, use an account on an exchange or service that provides you with a credit/debit card and an IBAN number.
This could be a bit overkill for most people but yes, in general, this would be a good way to further insulate your argument against being a trader. It also applies to other countries not just Portugal. I would only mention that the exchanges that provide a debit card might charge hefty fees for usage and conversions, so just keep an eye on that.
Mr. Valente comments are wise,
also among leading banks outside Portugal, an account with Revolut is fast to set up and effective, debit card provided if needed.
Thanks for the suggestion Mr. Valente.
So if I have already a NIF in portugal, to avoid crypto tax, I just need to ask portuguese tax lawyer or consultant to make an LLC for me to avoid paying crypto tax?
Is it possible to give some more information on how to make this happen, please?
Kind regards, Arthur
Just go to one of the Empresa Na Hora spots, it should take less than 1 hour.
https://justica.gov.pt/Portals/0/IRN/incorporating-company-guide-LINKS.PDF?ver=2020-01-30-214952-110
Hi Mario, would this minimal amount be enough to not classify you as a trader even though your crypto income is potentially much larger?
Furthermore, are you also saying that if you had a part time job doing whatever, you feel that this would be sufficient to classify yourself as crypto not being your main activity (or do you feel an LLC is required)?
Yes that amount is enought. Just like working as a doctor (for whatever amount) and owning milions in stock of Apple doesnt make you an Apple employee or a professional stock trader.
I wouldnt recomend a part time job as strategy. But if you have a work contract working for someone else or some other company that would be enough, no need for a sole ownership LLC.
Hi Mario
Hope you are well and thanks for the reply, much appreciated. Have you experience of doing this or know others that have? I am just wondering if , for example, you had a job paying minimum wage but traded quite a lot, would they not just see the trading as a second job and therefore subject to tax?