Aerial of Scenic Ponta da Piedade of Lagos, Portugal. Rugged seaside cliffs and aqua ocean waters in the Algarve region of Portugal

How will freedom of movement in Portugal change from 2021?

In just a few weeks, when the Brexit transition period officially ends at midnight (CET) on December 31, UK nationals will lose the automatic right to come and go in Portugal that has been in place for over 40 years. From January 1, only those who have already established lawful Portuguese residence or EU citizenship will have unlimited access to the country.

If you spend a lot of time in Portugal or have a Portuguese holiday home and enjoy being able to visit when you like – but intend to remain UK resident – things are about to become much more complicated. Similarly, if you are thinking about moving to Portugal after 2020, you will need to jump through more hoops than if you moved today.

Access to Portugal from 2021
As things stand, immigration rules have not been agreed for non-Portuguese resident UK citizens who want to spend time here post-Brexit. So while we remain confident that Portugal will continue to welcome British nationals, we need to wait and see what the new requirements will be.

At this stage, we can only speculate based on existing rules for non-EU/EEA (‘third country’) nationals, which are set to apply if the UK leaves without a deal. The UK and Portugal may agree more favourable arrangements in negotiations, so this should be considered the worst-case scenario.

The 90-days in 180-days rule
Once automatic freedom of movement ends, non-Portuguese resident UK nationals should still be able to enter Portugal visa-free… but only for short stays.

The EU has agreed to add the UK to its list of visa-exempt countries (provided the UK reciprocates). So, unless there is an alternative UK-Portugal agreement, UK citizens will be limited to visiting Portugal for up to 90 days within any 180-day period without a visa.

The 180-day clock would start when you first enter Portugal – or any EU/Schengen state – from 2021 as a non-EU citizen, with each subsequent departure and entry recorded and counted at border control. While being away from Portugal for a full 90 days would allow a new stay of up to 90 days, once you have used up your allowance you will not be permitted to enter another EU/Schengen country without a visa.

Those who maintain UK residency will, therefore, need to take extra care when planning trips to Portugal – or anywhere in the EU – to avoid illegally overstaying or potentially being denied entry. Also, be prepared to answer questions at the border about the duration and purpose of your visit.

For stays over 90 days or the right to work in Portugal as a non-EU national, you would need to apply in advance – under as-yet-unknown conditions and rules.

How to secure uninterrupted access to Portugal
If you arrive before the end of 2020, register for Portuguese residency and commit to meeting the residence requirements, you will lock in the right to remain and receive citizens’ rights protections under the Withdrawal Agreement for as long as you live here.

You don’t need to be physically present in Portugal when the Brexit transition ends to qualify, but you do need to prove that Portugal is your permanent home as at December 31, 2020. So if, for example, you return to the UK to finalise your relocation, take care not to invalidate your residence by spending too much time away. Note also that you will likely need to demonstrate you have “sufficient” annual income to support yourself and any dependents without relying on the state.

While you actually have until June 30, 2021 to apply for residence, delaying your application could be highly risky, especially if there is a processing backlog or questions about your paperwork. It is sensible to gather as much evidence as you can now that you have both the means and intention to stay in Portugal, and start the application process before the December deadline.

Tax residence
Once you become Portuguese resident, it is highly likely you will be deemed tax resident too, so you must take care to meet your obligations here.

Portuguese taxation may seem daunting – especially when you have to consider how it interacts with UK rules – but careful, early planning can make a significant difference to your tax bill. A locally-based adviser with cross-border expertise is best placed to help you take advantage of suitable opportunities in Portugal and guide you through the necessary steps to protect your position post-Brexit.

While it’s not quite “now or never” for securing access to Portugal, it will certainly get harder from 2021, so weigh up your options now for making the most of what Portugal has to offer.

All advice received from any Blevins Franks firm is personalised and provided in writing. This article should not be construed as providing any personalised taxation and/or investment advice. All information is based on Blevins Franks’ understanding of legislation and taxation practice, in the UK and overseas at the time of writing; this may change in the future.

By Mark Quinn
|| features@algarveresident.com

Mark Quinn is a Partner of Blevins Franks in Portugal. He holds a Bachelor’s Degree in Finance, a level 6 Advanced Diploma in Financial Planning from the Chartered Insurance Institute (CII) and is a Chartered Financial Planner.
www.blevinsfranks.com