Portugal prepares e-residency program under a digital revolution plan

Portugal is underway launching a new measure to encourage investment, technology and innovation under the National Entrepreneurship Strategy. It is taking the first steps towards implementing an “E-residency” program to attract foreign entrepreneurs. The digital program would allow foreign citizens, who don’t live in Portugal, to use Portuguese public services online.

The E-residency program was announced in the State Budget Law for 2020, with final approval scheduled for Feb. 7. The objective is to allow foreign applicants not residing in Portugal to be granted rights regardless of their physical location, replicating the model implemented by Estonia in 2014.

In this sense, foreign citizens will be able to set up and manage a company in Portugal, regardless of where they are in the world, without having to live in Portugal or physically visiting all public entities and services involved in the standard process because they will be able to do everything online. Under the program, an investor may, for example, obtain a tax identification number,  incorporate a company, fulfill tax obligations or develop economic activity in Portugal.

In Estonia, between 2014 and 2018, there were 41,000 applications under this kind of program, dispersed among applicants from 160 countries.

So, the possibility of opening a company in Portugal within minutes, without bureaucracy, paperwork or travel costs, will be a giant step and of extreme economic importance for the development of any foreign business that intends to expand into the European market or into the Portuguese speaking countries market (PALOP), such as Angola, Mozambique or Brazil.

If Portugal follows the Estonian model, this program should not, by itself, have implications for tax residency obligations nor assign rights of residence in the territory or to the Portuguese citizenship, as its focus is the attraction of investment, projects and entrepreneurs to the country.

In addition to the e-residency program, the government is working on simplifying other public administration digital services for international entrepreneurs, providing English-language sites, as well as processes for welcoming immigrants, with one-stop shops that allow integrated responses to their needs.

The Portuguese government will also seek, among other measures, to support the creation or development of companies’ accelerators for seed investment and to encourage the creation of a connection platform between small and medium-sized companies (SMEs), non-governmental organizations (NGOs) and startups, in order to generate new products and services.

Common to all these measures are the main objectives of bridging gaps in the Portuguese economic-business system, creating conditions for the development of innovative economic activities, responding to the challenges of the digital age and taking advantage of the opportunities that the growing geographical mobility of people and companies generates, with significant socio-economic impact, which is deemed necessary and crucial for the country's recovery and growth.

In addition to the E-residency program, Portugal also offers various measures and programs such as the Non-Habitual Tax Residents Scheme (reduced taxation on personal income for new residents), the KEEP (for employees), the Golden Visa (residence right based in real estate, financial, corporate, cultural, technologic or scientific investments), the TechVisa (to attract high qualified foreigners), and the StartUp Visa (for innovative projects and entrepreneurs).

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