Golden, Green or D7? What’s your visa of choice as a South African expat?

Golden, Green or D7? What’s your visa of choice as a South African expat?

Over the past few years, South African citizens have become increasingly attracted to life in Portugal. A favourable investment and residency environment, the Mediterranean climate, Schengen area membership, political stability, a sustained period of economic growth and a cost of living that cannot be bettered in many European destinations are just a few of the many reasons.

Much of the appeal can be traced back to 2012 when, during the eurozone economic crisis, the country was included as one of the ‘PIIGS countries’ (Portugal, Italy, Ireland, Greece and Spain) which were deemed to be weakened economically. Far from letting this be a negative, Portugal responded by encouraging offshore investment and growth in the country, attracting non-European high-net-worth investors from less favourable tax jurisdictions, such as South Africa.

The Portuguese programme of financial strengthening proved beneficial to all involved: the economy has been stimulated, property investments made, and those overseas investors who made the move to Portugal have enjoyed an excellent lifestyle together with unfettered access to other EU member states.

How to emigrate with a D7 visa (Retirement Visa)
Many South Africans will be familiar with the ‘Golden’ and ‘Green’ visa routes into Portugal, but the Portuguese Passive Income Visa, or D7 Visa, is another potentially useful path to residency – it can be a quicker, cheaper route than the Golden Visa and does not require a €500,000 investment in environmental projects: the requirement for a Green Visa.

​Any South African who has a moderate net regular passive income – for example pensions and retirement accounts – may take the D7 visa path. Applicants must meet a number of requirements which will be tested throughout the application process, first via the Portuguese Consulate in South Africa and then with SEF (immigration and border service) in Portugal.

All applicants must meet the following minimum income requirements:
▪ 1st adult (applicant): 100% of the current Portuguese minimum wage of €7,200 a year.
▪ Family adult applicants: 50% of the current minimum wage of €3,600 a year.
▪ Children: 30% of the current minimum wage of €2,160 a year.

Applicants must have a bank account in Portugal and long-term accommodation (rented or owned) in Portugal.
Once an applicant has successfully completed the process and they receive their D7 visa, their close family members can also receive Portuguese residency under the “family reunification” regulations.

More about the D7 visa
▪ It is a bank-card sized ID document.
▪ It entitles free movement across all Schengen Area and adherent European countries.
▪ It entitles freedom to live and work in Portugal.
▪ Holders can become non-habitual residents of Portugal for tax purposes (ensuring no or limited tax on foreign-sourced income for 10 years).
▪ It gives access to education, healthcare, social security, trade union protection and Portuguese legal protections.

A D7 Visa enables a South African citizen to reside in Portugal for one year. This can then be renewed for two successive two-year periods. At the end of the five-year period, a D7 holder may be able to acquire Portuguese citizenship or permanent residency. D7 visa holders must reside in the country for six months consecutively.

Will a South African inheritance be problematic?
Any South African who moves to Portugal and then receives an inheritance from back home will need to consider their inheritance tax obligations in both countries.

Firstly, it is important to remember that the South African Revenue Service does not class inheritance as income. In fact, all relevant taxes – most likely Capital Gains Tax – are paid by the estate rather than the beneficiary.

Once probate has been completed and the inheritance sum has been paid into South African accounts, the money can be moved to Portugal or any other chosen jurisdiction. However, there are limits to how much money a person can move out of South Africa if they have not registered as a financial emigrant. The SDA (Single Discretionary Allowance) and FIA (Foreign Investment Allowance) allow non-financial emigrants to take R11 million (€630,000) out of the country each year.

Financial emigration is a natural step for D7 Visa holders – it frees individuals from various taxation and administrative burdens in South Africa and in no way affects South African citizenship.

Blacktower Financial Management in Portugal
Our bilingual, cross-border financial advisers in the Algarve can help you make sense of all the important issues you face when moving from South Africa to Portugal, including aligning your finances with both your residency status and long-term financial plans.

Contact us today for an informal discussion of your situation.

Disclaimer: The provision of information in this communication is not based on your individual circumstances and does not constitute investment advice. Blacktower makes no recommendation as to the suitability of any of the products or transactions mentioned.

Manuela Robinson is the Joint-Country Manager of Blacktower in Portugal. With offices in Quinta do Lago and Cascais.
[email protected] | 289 355 685
Blacktower Financial Management (International) Limited is licensed by the Gibraltar Financial Services Commission. Licence 00805B. Blacktower Financial Management Limited is authorised and regulated in the UK by the Financial Conduct Authority.