Moving to Portugal from the UK in 2025: The Easiest Path to Residency in Europe

For those serious about securing a second residency—or even making a full-on move—Portugal remains one of the simplest and most attractive destinations in Europe. With residency VISAs typically granted within 60-90 days and residence permits finalized in just 6-7 months, Portugal still stands out as a top-tier option for global citizens looking for a Plan B.

A Residency Path for (Almost) Everyone

If you have passive income (dividends, interest, or a pension) that meets the Portuguese minimum wage (less than €1,000 per month), the D7 Visa remains one of the easiest residency pathways in the world.

Other options include:

• D8 Visa (Digital Nomad Visa): If you work remotely and earn four times the minimum wage (under €4,000 per month), this is for you.
• D3 Visa (Highly Qualified Professional Visa): Have a job offer in Portugal? This one's a no-brainer.
• Entrepreneur Visa: Want to start a business in Portugal? The country welcomes foreign entrepreneurs with open arms.

The takeaway? If you have money or work remotely, you can likely move to Portugal without much hassle. Unlike other European countries that bog you down in bureaucratic nightmares, Portugal keeps the process relatively smooth. And once you're in, restrictions are minimal. For instance, D7 holders can work freely once their residency is granted—unlike Spain’s NLV, which bans employment.

Portugal vs. Spain & Italy: The ‘Easy-Going’ Edge

Here’s the reality: Spain and Italy have beautiful cultures, but when it comes to immigration and taxation, they are brutal. They have endless rules, and they enforce them aggressively. Portugal? The country is slow and inefficient, yes—but it’s also not punitive. Instead of treating immigrants as tax targets, Portugal often offers flexibility and understanding. (Your mileage may vary, of course.)

Setting Up a Madeira Subsidiary: Immediate Tax Benefits & Future-Proofing

For successful business owners with strong cash flow, opening a Madeira-based subsidiary can be a game-changer. Here’s why:

1) Lower Corporate Tax—Instantly

The UK’s corporate tax has jumped to 25%, while mainland Portugal’s is dropping to 20% in 2025. But Madeira? It’s even better:

• 14% corporate tax rate (likely dropping to 13%) - or as low as 5% with a Madeira IBC!
• First €50,000 taxed at just 11.7% (also expected to drop)

Yes, Cyprus (12.5%) and Malta (5%) have lower rates, but here’s the catch—they put you on HMRC’s radar. Portugal, on the other hand, is a fully EU-compliant, non-blacklisted jurisdiction, offering a low-risk, high-reward strategy.

On top of that, UK small businesses (under £10M turnover) avoid UK tax on dividends from their Portuguese subsidiary after holding it for just one year—no withholding tax, no extra admin headaches.

2) An Office in Paradise with Ultra-Fast Fiber Internet

Madeira is a hidden gem: a subtropical island with 20°C winters, breathtaking landscapes, and some of the best hiking in Europe. The cost of office space is absurdly low, and internet speeds often surpass those in the UK. Daily flights connect Madeira to most UK cities, making it a viable base for operations—or just a great escape from the dreary British winter.

3) Cheap, Loyal, English-Speaking Talent

Hiring in the UK has become a nightmare—higher costs, lower productivity. Madeira offers two great talent pools:

• Local workforce: Young, fluent in English, often UK-educated, but with few opportunities, making them highly loyal employees.
• Digital nomads: The island hosts one of Europe’s largest digital nomad hubs, offering access to a diverse skill set.

With minimal local recruiting competition, you’re not battling headhunters for top talent.

4) Invest in a Holiday Home—With Serious Perks

Madeira isn’t just a beautiful place to live; it’s an incredible real estate investment:

• Best Island Destination in the World (9 years running!)
• Year-round tourism = year-round rental demand
• Short-term rental rules are pro-investor & tax-friendly (only 35% of rental income is taxable)

Whether you want personal use, rental income, or both, Madeira makes perfect sense.

Portugal’s New 2025 Tax Regime: NHR 2.0 (TISRI) & Pension Changes

The famous NHR tax regime is gone as of 2025—but Portugal is replacing it with a new system: the Tax Incentive for Science, Research, and Innovation (TISRI), aka NHR 2.0.

What’s changing?

• GOOD: Keeps many NHR benefits, plus foreign capital gains are now tax-free.
• BAD: Pension income is no longer tax-exempt. It will now be taxed at progressive rates.

The new system is harder to qualify for—you need a meaningful connection to Portugal. One option? Join the board of a certified startup. We’ve built relationships with local startups and can help qualified individuals secure a board seat. Yes, an investment may be required, but it’s a legit pathway into Portugal’s tax incentives.

For UK retirees, smart planning is essential. The good news? A quarter of UK pensions can still be liquidated tax-free, and we can help reinvest those funds into tax-efficient structures in Portugal (often taxed at just 11.2% after 8 years).

Pitfalls to Avoid: UK Exit Rules & Tax Traps

Leaving the UK isn’t just about packing your bags. If you return within five years, HMRC can retroactively tax you.

Also, any dividends or income received after moving may still be taxable in the UK if you leave mid-year—so timing your exit correctly is crucial.

Why Work with Us? The Best UK-Portugal Tax Advisors

At Veyra, we have tax lawyers and accountants in both the UK and Portugal.

That means:

• We understand both systems inside out.
• We don’t just sell you a Portuguese plan—we make sure it works with your UK obligations.
• We help with everything from residency to tax optimization to business structuring.
• We have tax lawyers and accountants for both the UK and Portugal, ensuring seamless compliance and financial planning.
• We have a local presence in Madeira, allowing us to efficiently set up Madeira International Business Companies (IBCs) and integrate them into your broader financial strategy.

Portugal remains the best option for UK expats looking for lower taxes, better weather, and a simpler life—whether you’re ready to move now or just want a backup plan. If that’s your goal, let’s make it happen.

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