Portugal’s D2 (Entrepreneurship) Visa & Residency Permit

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The D2 or “entrepreneur visa” is aimed at those from outside of the EU/EEA/Switzerland that want to start a business or startup in Portugal. It isn’t as well-known as the D7 or the Golden Visa, and this is probably due to the fact that the D2 is a little bit more complicated than the other two visas. 

With the Golden Visa, the main requirement is that you have sufficient funds to invest in Portugal. With the D7, you need to prove that you have sufficient regular income coming into your bank account so as to live in Portugal. Those things are generally straightforward and easy to prove. Well, relatively speaking.  

With the D2, however, someone in Portugal has to assess the viability of your business plan, whether it will be successful in Portugal and/or whether it’ll benefit the Portuguese economy and society (whether it has economic, social, scientific, technological, and cultural relevance).

Because of this, most relocation companies or lawyers will recommend that you opt for another visa like the D7 if you are in the lucky position of potentially being eligible for both. 

That said, while the D7 isn’t always as liked as the D7, the D2 has a lot of strengths and is well-regarded when compared to other European entrepreneurship visas. One example is that there is no minimum investment required, although it should be noted that most immigration companies will suggest that you invest at least €5k worth of capital. While this isn’t zero investment, it’s an achievable investment amount for many entrepreneurs. 

There’s also no limitation on the type of business you decide to launch in Portugal: it could be anything from a café to a tech startup to an import or export business.

Tax-wise, it has to be said, there are countries with lower corporation, dividend, and personal income tax than Portugal, even within Europe. However, the value of moving to Portugal is rarely for lower taxes but ease of moving to a European country, Portugal’s low cost of living, subsistence requirements, and all of the lifestyle benefits that come with living in Portugal (such as the good weather and safety).  

D2 Overview 

The D2 visa allows anyone 18 years or older to come to Portugal to start (or transfer) a business, provide services, or start (or transfer) a startup. You do not need to speak Portuguese in order to be accepted for the visa, although it’s obviously recommended that you learn – especially if you plan to do business with Portuguese companies or Portuguese people.

You will need to pass at least the A2 language exam if you apply for citizenship later on, but the citizenship application isn’t an option for at least 5 years anyway (around 6 in practice).  

As with all other visas, you also must not have a criminal record.

Like the D7 and Golden Visa, as well as providing a way of living in Portugal, the D2 offers a path to Portuguese citizenship. After 5 years of being resident in Portugal, those on the D2 are eligible to apply for permanent residency (renewed every 10 years). They’re also eligible to apply for Portuguese citizenship, which comes with the benefit of a a Portuguese passport (which is an “EU passport”).

During those 5 years, you’re normally required to spend at least 6 consecutive months living in Portugal (or 8 months with gaps) to maintain your residency and be eligible for permanent residency. If, however, your business requires you to leave Portugal for work purposes, there is a certain amount of flexibility given. 

As mentioned, you need to provide a business plan that shows the value of your business to the Portuguese economy and society. If you’ve already started other businesses, or are opening a branch of an existing business, this will be easier to show. You don’t have to start a completely new business in Portugal.

As with the D7, you will also need to show that you have means of supporting yourself. In practice, this means having an income that’s greater than the Portuguese minimum wage (roughly €635 per month) to support yourself. If you plan to move to Lisbon, however, which is where the largest startup and entrepreneurial community is located, you should up your budget to at least €1,000 per month.

The D2 is aimed at two groups of people: entrepreneurs and independent service providers.

Entrepreneurs

Most people applying for the D2 visa fall into the entrepreneur category. 

The D2 allows them to open any kind of business in Portugal or to open an arm of an existing business, which may be an easy route for those with established businesses. Unlike the startup visa, there are no limitations on the type of business: you could launch something in the hospitality or tech sector, for example. 

Entrepreneurs will need a NIF (fiscal number), Portuguese business bank account, and to open a limited company in Portugal (known as an LDA). And, because you’re opening a company, you’ll need an accountant as well. An LDA can have one or several partners. 

You can either come to Portugal and obtain these things yourself or you can enlist the services of a company to help you with the process. 

Each of those things comes with an initial cost and then there are the ongoing costs of maintaining a company, using the services of an accountant, and paying taxes (corporation and personal) as well as social security. 

Independent Service Providers

The independent service provider, namely someone who provides services to Portuguese or international clients, is another category of people that can apply for the D2. 

There’s slightly less setup involved here than there is for entrepreneurs. There’s no need, for example, to register a company or to get an accountant, although getting an accountant is always recommended in Portugal. 

Many of those that fall under the independent service provider category may also be eligible for the D7 and many companies will recommend that you opt for the D7 instead. It’s recommended that you speak to a professional to see which visa is most suitable for you. 

Comparisons to other visas

D2 VS the Startup Visa

As well as the D2 entrepreneurship visa, Portugal also has a startup visa.

This visa is slightly more restrictive than the D2 visa in that it’s only suitable for technological or startup-type businesses. It also needs to be able to generate an annual turnover of €325,000 within five years of entering a tech incubator, as well as have the ability to create jobs. You’ll also need a written declaration of interest from a Portuguese tech incubator. You’ll also need to have sufficient funds in your bank account – €5147 per year (per person).

This visa is obviously more complicated again than the D2, and at first glance it may not make sense to apply for the startup visa over the D2, however, it’s always good to get professional advice on the best course of action.

It seems that, because startups have a lot of value to Portugal, there may be some flexibility on the A2 language requirement for citizenship after 5 years. There also seems to be less of a requirement for physical residency in Portugal. If these two factors are of particular importance, it may be worth considering the startup visa over the D2.

That said, the startup visa is a lot more demanding in its requirements and it may be more cost effective to just learn Portuguese and spend 6 months of the year in Portugal.

D2 VS the Golden Visa

Although most people think of the Golden Visa as the property investment visa, this is just one investment area that the Golden Visa offers. It’s also possible to invest in a fund or start a company that creates jobs via the Golden Visa.

While the property requirements of the Golden Visa are very achievable for many, the investment requirements are less attractive. One option is to create at least 10 jobs in Portugal. Another is to transfer €1 million. There’s also a smaller investment option, but the amount is €350k.

For entrepreneurs, the D2 is more attractive in that the investment amount is lower (technically zero, but around €5k in practice) and you’re not required to create jobs.

However, if your goal is simply to buy your citizenship, so to speak, and you have the funds, the D2 may not be the best option for you: transfer of €1 million to a Portuguese bank account is much easier than setting up and running a business for 5 years. If you don’t have €1 million to part with, the property investment route may be more appealing and, again, this involves a lot less work than starting a running a business.

D7

The D7 is the more talked about visa for a number of reasons. Firstly, the requirements are a little more straightforward than the D2. Secondly, the D7 is more suitable for the type of people Portugal tends to attract (namely retirees, those seeking early retirement, employees able to work remotely, and freelancers).

If you meet the requirements of the D7 – basically that you have passive income that’s equal to the Portuguese minimum wage – it’s usually better to apply for this.

There are also no restrictions on starting a business in Portugal on the D7 visa, so you could enter on the D7 (assuming you meet the requirements) and then setup whatever business you were planning to set up.

NHR, Portugal’s Non Habitual Tax Residency scheme, is also an option on the D7, but isn’t always an option on the D2.

Why Portugal

Besides achievable visa requirements, there are a number of other reasons to choose Portugal as the place to launch your startup or business. 

Firstly, there are all of the reasons for moving here: the good weather, the low cost of living, the food, safety, and everything else. From a business point of view, however, Portugal is particularly attractive because it has a well-educated workforce, many of whom are fluent in English and often another language, and because wages here are lower than many other EU countries. 

This isn’t to say that everything about Portugal is perfect, however. Portugal has plenty of cons as well – including complicated bureaucracy, which is obviously a deterrent to many businesses – but for an ever increasing number of entrepreneurs the pros outweigh the cons. This is especially true for those that are looking for a second passport from an EU country.

D2 Application

Like the D7, the D2 visa is normally issued by the embassy or consulate in your country of residence. Basically, if you live in the UK, for example, you apply for the D2 visa there. If you live in the US or India, you apply there.

Once granted, the D2 visa allows you to move to Portugal and attend an interview with SEF. Assuming the interview goes successfully, you’ll then be granted a temporary residence permit. Temporary residence permits are normally granted in 1-2 year blocks. After 5 years, you can apply for permanent residency. Rather than applying for residency in 1-2 year blocks, permanent residency is given in 10 year blocks.

It is possible to enter Portugal on a tourist visa rather than the D2 visa and apply for residency while in Portugal, but applying for the D2 visa from your country of residence is the most common and straightforward way. 

Family Members

Those who have been given a D2 residence permit can apply for a Family Reunification Visa in order to bring their family to Portugal. You will need to show you not only have the means of supporting yourself, but also supporting each family member. The amount for spouses and children is, however, not as high as the amount for supporting yourself.

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