Portugal Moves the Goalposts—and the Message Is Clear

The Changing Face of Expat Life in Europe…

My friends in the Portuguese immigration sector are pulling their hair out.

First there was the demise of the residential property option to get Portugal’s popular Golden Visa. The Portuguese government dropped that option in late 2023, leaving a more expensive investment fund route as the main way to get five-year renewable residency without tax obligations.

Then there was the cancellation of the Non-Habitual Resident (NHR) tax concession for most immigrants except entrepreneurs. That had been one of Europe’s most popular immigration incentives, attracting applicants from inside and outside the European Union.

Last week came yet another blow. The Portuguese government announced it was extending the timeline to citizenship by naturalization from five years to 10. This had been extremely popular with Golden Visa investors, since it gave them an easy pathway to European Union citizenship without requiring much time in the country beforehand.

The Portuguese immigration industry is like a car dealership faced with changes from automakers.  They have to tell their customers that this year’s model comes without tires or windows. Yes, they once did, but not anymore.

I’m exaggerating, of course. There have been no changes to the popular D7 passive income visa or the D8 digital nomad visa. They’re still the easiest ways to get residency in that part of Europe—and they come with exceptionally low income requirements. The government seems happy to continue offering those.

 But there’s no denying that something is changing… and not just in Portugal.

As I explained in a recent two-part survey of the history of citizenship and passports, we are amidst a major sea change in how European nations approach the ultimate immigration step (acquiring citizenship). European countries are still happy to have people come live there if they spend their money and pay taxes… but across the continent, they are drawing the line at welcoming such people into the national community as full citizens.

In Portugal’s case, people like me, whose business it is to stay on top of such matters, saw this coming.

The country’s nativist right-wing Chega! (Enough!) Party increased its voting share dramatically in the last two election cycles. Chega now has 22.8% of the vote, making it the second-largest party in parliament with 60 seats. Just three years ago they got 7% and 12 seats.

The ruling right-of-center, business-friendly coalition would probably prefer to leave immigration rules as they are. But faced with such a threat from the extreme right, they had to do something.

Naturalization was an easy target. Consider the position of ordinary Portuguese. The country has one of Europe’s lowest average incomes. Foreigners have dramatically affected housing prices. Many of them who qualified for the NHR pay no taxes, yet they get the same public services as the native-born. The government offers free language courses to immigrants, giving them just enough skill to pass the citizenship test. Then these newly minted Portuguese citizens go back to speaking whatever language they arrived with to the locals. On top of that, few immigrants practice the country’s deep-rooted Catholicism—and know little of its incredible history as Europe’s oldest sovereign nation.

In other words, Portuguese voters are motivated by the same issues that put Donald Trump in the White House, took Britain out of the EU, and inspired Italy to end its vaunted ancestral citizenship rules. Natives don’t mind foreigners, but if they think foreigners are getting a better deal than the natives, they’ll revolt.

What does this mean for the thousands of US citizens urgently looking for a home abroad?

First, don’t wait. Your goal is a moving target. Act now before the rules change.

Second, make sure you have someone by your side who pays close attention to immigration and other political issues in the countries you want to live in… like me. (Want to meet me for a personal consultation? You can book one right here.)