Author Topic: FIRE in Portugal  (Read 2551 times)

DollarStoreBaller

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FIRE in Portugal
« on: August 25, 2019, 05:04:34 PM »
Hi All,

As part of our FIRE roadmap, my wife and I are planning to move to Porto, Portugal at the beginning of 2020. I did a quick search of the forums and haven't been able to find much content specific to our situation so I thought I'd post to see if there are other Mustachians who have gone down this road.

Some background on us - my wife works as a freelance web/graphic designer and I do tech sales. I've negotiated a position to be the first EU employee and to help my company establish their European presence and will be continuing on with my current employer. We plan to buy property in Porto in order to take advantage of the Golden Visa program (https://en.wikipedia.org/wiki/Portugal_Golden_Visa) that Portugal offers which will allow us the right to live/work and in ~5 years time apply for citizenship. Additionally, we'd like to maximize the benefits of their Non Habitual Resident tax program (https://www.globalcitizensolutions.com/nhr-portugal-tax-regime/) and the US Foreign Earned Income Exclusion (https://www.americansabroad.org/us-taxes-abroad-for-dummies-update/)

Has anyone else been through this process? We've been trying to do self guided research and decisions thus far but we're getting to the point where chatting with folks who have gone down this path and/or professionals who specialize in this area would be very helpful as this move will have major life ramifications and we want to make sure that we get it right :).

Thanks!

orangewarner

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Re: FIRE in Portugal
« Reply #1 on: August 26, 2019, 10:06:37 PM »
I lived there for two years doing volunteer work. I wasn't a retired person, but Portugal was awesome

expatartist

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Re: FIRE in Portugal
« Reply #2 on: August 26, 2019, 11:04:09 PM »
Congratulations on making the move and finding a sustainable way to do so! A US artist couple I know has successfully done this in Portugal after making a killing in RE in the Bay area, but they're not on MMM. I will most likely do the Greek Golden Visa which is cheaper and in a more, er, lively [unstable] region. My friends bought several flats and now rent them out on AirBnB/privately when they're not in town. They're frequently in the US and other places, traveling to exhibitions, projects, and residencies. For peripatetic people like us these visa programs can be really useful in terms of making it easier to work in various countries, helping our career long-term.

WalkaboutStache

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Re: FIRE in Portugal
« Reply #3 on: August 27, 2019, 02:18:31 AM »
Congratulations on making the move and finding a sustainable way to do so! A US artist couple I know has successfully done this in Portugal after making a killing in RE in the Bay area, but they're not on MMM. I will most likely do the Greek Golden Visa which is cheaper and in a more, er, lively [unstable] region. My friends bought several flats and now rent them out on AirBnB/privately when they're not in town. They're frequently in the US and other places, traveling to exhibitions, projects, and residencies. For peripatetic people like us these visa programs can be really useful in terms of making it easier to work in various countries, helping our career long-term.

I have actually been thinking of the Greek Golden Visa program.  I like where I am and my little community so I haven't taken any concrete steps in that direction, but it is tempting.

expatartist

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Re: FIRE in Portugal
« Reply #4 on: August 27, 2019, 02:55:19 AM »
Congratulations on making the move and finding a sustainable way to do so! A US artist couple I know has successfully done this in Portugal after making a killing in RE in the Bay area, but they're not on MMM. I will most likely do the Greek Golden Visa which is cheaper and in a more, er, lively [unstable] region. My friends bought several flats and now rent them out on AirBnB/privately when they're not in town. They're frequently in the US and other places, traveling to exhibitions, projects, and residencies. For peripatetic people like us these visa programs can be really useful in terms of making it easier to work in various countries, helping our career long-term.

I have actually been thinking of the Greek Golden Visa program.  I like where I am and my little community so I haven't taken any concrete steps in that direction, but it is tempting.

Would be great to share tips if you do! It's more appealing now there's the possibility of a passport and proper long term residency. But tbh it's not a top choice for most from first world countries - been more popular with those fleeing currency controls or authoritarian regimes, ie Turkey, China, Russia. I bought a tiny, cheap flat in Athens 4 years ago to test things out, an incentive for visits and an experiment. It's doubled in value yet costs remain quite low. I really enjoy the city and for me it can be an affordable European base. But the economy is fundamentally flawed in many ways, and the real estate-centric golden visa plus air bnb have begun to inflate real estate prices. Taxes may well become extensive for foreigners or draconian in other ways, or they may split from the Euro eventually or have other economic issues. For me Athens makes the most sense not just due to the cheaper cost, but its arts infrastructure, international importance, and relevance are very good for the price. [Berlin's is better but I just don't like the city or language ;)]

Thanks for your patience with our thread hijack OP, hope to follow your journey as you move.

Linea_Norway

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Re: FIRE in Portugal
« Reply #5 on: August 27, 2019, 05:06:07 AM »
Do you realize that for a few years ago Greece was almost broke? Around that time, that had some consequences for the public services that might not be on normal levels all the times, like public workers not getting paid. I would check the economics prospects of a country before moving there.

expatartist

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Re: FIRE in Portugal
« Reply #6 on: August 27, 2019, 05:43:09 AM »
Do you realize that for a few years ago Greece was almost broke? Around that time, that had some consequences for the public services that might not be on normal levels all the times, like public workers not getting paid. I would check the economics prospects of a country before moving there.

Yes, in fact I bought in the middle of the crisis in 2015. The banks were shut - many cash machines empty. I had to pay for the flat in cash (all done legally) since banks were shut. My Greek lawyer is amazing and has been with me every step of the way. She's an expert in Golden Visas but has never pressured me to get one. She's not made much money off me but calls me her lucky client, since people began buying again shortly after I did. We've worked together for 4 years, and I have many other Greek friends who advise at every turn. They mostly recommend I marry someone ;)

My life and my career are not typical. They are not particularly special, but what I look at for investments and to secure my future are not the same as many people on these boards. Like you I've lived in several European countries (studied in France and Italy, interned in the UK) but most of my adult life has been spent in first-, second- and third-world Asia, where things don't always function as one would like. In Hong Kong where I now live, portions of our metro (one of the world's finest) have recently been closed and people are terrified China will shut the city down and roll in with tanks. But I'm immigrating here anyway.

If there's interest, perhaps I should start a thread on the Greek golden visa so we don't distract any further from the OP.

@arebelspy or other mods, could we move this post over to a new thread?  Or new journal, since TBH I wouldn't want to go too much further into detail if it's 100% publicly visible.
« Last Edit: August 27, 2019, 06:35:00 AM by expatartist »

BicycleB

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Re: FIRE in Portugal
« Reply #7 on: August 27, 2019, 01:19:23 PM »
Friends who visited Portugal during the past year reported it as cheap, friendly, safe, and with good food. One just returned last weekend from 2-3 weeks of sailing there. Showed some lovely pictures!

Your plans sound exciting - interested in how they turn out. Best wishes.

PS. Also - great screen name.
« Last Edit: August 27, 2019, 01:30:27 PM by BicycleB »

shmadas

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Re: FIRE in Portugal
« Reply #8 on: September 02, 2019, 11:49:29 AM »
I've also been interested in the NHR program, but haven't pursued it in detail. I do remember reading somewhere that the other European countries might pressure Portugal to rescind the program, since they were losing residents (and tax revenue) to Portugal.

Out of curiosity, why Porto over Lisbon?

Do you speak any Portuguese?

TexanInBavaria

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Re: FIRE in Portugal
« Reply #9 on: September 03, 2019, 01:52:50 AM »
Be aware that as an EU resident, no matter how nice Portugal's tax system will be to you, you will likely have trouble buying or even reinvesting dividends from US-domiciled ETFs, and that buying EU-domiciled ones will force you to deal with PFIC regulations (and taxes). US brokerages have started complying with MiFID II, and they take this to mean that they cannot allow customers who are EU residents to buy US-based ETFs because they lack the EU-mandated customer disclosures, and reinvesting dividends counts as buying. Schwab does interpret it to mean that they can allow investment advisers in the US to continue buying ETFs on behalf of US citizen customers who are currently living in the EU.

Read this thread: https://forum.mrmoneymustache.com/investor-alley/etfs-for-american-(usa)-expats-living-in-the-eu/

More details:
 
MiFID II and PRIIPs (EU residents, not just citizens): https://www.bogleheads.org/wiki/EU_investing#EU_legislation_:_UCITS.2C_MiFID_II_and_PRIIPs

PFIC: https://www.bogleheads.org/wiki/Passive_foreign_investment_company

But Portugal is fantastic, so worth planning around the investment difficulties.

ItsALongStory

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Re: FIRE in Portugal
« Reply #10 on: December 28, 2019, 08:42:29 AM »
@TexanInBavaria do you know if some of these robo-advisors would count as an investment advisor?

My circumstance will likely be that I will have Roth IRA, 401k and taxable accounts with Fidelity/Vanguard which will remain untouched for possibly up to 10 years. Any investments i would do in Europe are likely to be done through DeGiro or IB. Based on what you wrote should I consider moving my funds to Schwab merely for their interpretation of the law? 

brooklynmoney

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Re: FIRE in Portugal
« Reply #11 on: December 28, 2019, 11:44:25 AM »
I am also considering a golden visa or applying for my Italian citizenship (or recognition of my Italian citizenship). Overseas at least for part of the time seems like the smart thing to do for my situation.

aspiringnomad

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Re: FIRE in Portugal
« Reply #12 on: December 29, 2019, 03:44:44 PM »
We're moving to Southern Portugal (the Algarve) to kick-off FIRE in late-April. We're planning to stay a year but are committing to at least six months there, then expect to slow travel through Southern Europe. This plan has been in the works since I realized FIRE was a possibility--Portugal specifically to start because I've been to the country four times (first time in 2003) and kind of fell in love with the mix of culture, food, beaches, and cost of living. I've been learning Portuguese the last couple years in preparation.

My spouse has Irish citizenship so visas won't be an issue. I'm posting mostly to follow the investment discussion. I hadn't realized that purchases of US domiciled ETFs could be a problem and even though we'll have no earned income, had been planning to continue dividend reinvestments until I saw this thread. We're with Schwab so it sounds like there might be some workarounds.

Bernard

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Re: FIRE in Portugal
« Reply #13 on: December 31, 2019, 04:16:56 PM »
https://youtu.be/owMNL3FgjqA

I've lived in Sweden, Denmark, Germany, Switzerland, France, and Italy. I don't think there's a European country west of the Iron Curtain I haven't visited before emigrating to the United States. Portugal is the most affordable place to live for a non-EU passport holder (again, I exclude Eastern Europe which is a totally different animal). It's a great retirement destination for American expats because they can get 10-year tax free residency. It's a horrible place having to look for work, same as Spain, Italy, Greece, etc., but that doesn't apply to you. In addition, Portuguese is a difficult language to acquire.

Hot tip from me, worth spending the hour on the screen. It will boggle your mind:
https://youtu.be/illApgaLgGA

I don't know how much time you spent in Portugal. Sure, Lisbon and Porto are great cities, but even the Agave can't hold a candle to the Costa del Sol or the Cote d'Azure. If I had to pick a retirement destination in Europe for a low income retiree, Portugal would be on top of my list. If said retiree has a bit more money, I'd look into France or Italy instead. But even with 2 EU passports in addition to my US one, I wouldn't want to live in Europe again. A vacation home at Lake Como perhaps, but all year? Nope.
« Last Edit: December 31, 2019, 04:18:55 PM by Bernard »