Since inception, more than 19,000 new “golden” residents have been approved for Golden Visas in Portugal. Only 387 (2 out of every 100 applications) were turned down despite warnings from the UN and the European Commission. Allegations abound that these Portuguese entry visas facilitate money laundering and tax evasion as well as jeopardize the security of the EU. The European Parliament will vote on a proposal to abolish such schemes throughout the member states.
European Union member states unanimously rejected a proposal to include Saudi Arabia and four US territories among countries blacklisted for lax controls on terrorism financing and money laundering. As reported by Reuters, member states criticised the European Commission’s methodology, claiming that the listing used criteria different from the Financial Action Task Force (FATF), considered to be the global standard for anti-money laundering.
The Algarve and the Lisbon Metropolitan Area were among the regions with the most significant increase in employment in the EU in 2017. Eurostat recently released data confirming that 253 EU regions, representing 90% of the total, registered a rise. In 26 other districts, employment decreased and in two others, remained unchanged.
As reported by the FT, the EU blacklist threatens to expose British overseas interests. If Great Britain abandons the European Union as scheduled, some UK territories may become candidates for possible inclusion in future versions of the “dirty money” list. The Americans are also unhappy with Brussels. The US seems more vexed about which territories appear on the blacklist rather than the practices that resulted in this “naming and shaming”. The deadline to form a majority to block the Blacklist is 12 March. The European Parliament is scheduled to vote its approval for the blacklist in the next week. It is improbable that the initiative can be blocked. Despite backing from France and renewed US pressure, it will be difficult for the UK to muster enough support to stop the update.
Immediate money transfers (taking a maximum of 10 seconds to complete) have become accessible in the Portuguese banking system as of 18 September 2018 according to the Bank of Portugal. This new method can be used 24 hours a day, 365 days a year. The maximum amount to be transferred is currently capped at _15,000. This ceiling is defined at the European level and may change in the future.
Instant transfers are not limited to the Portuguese banking system. The new system allows for interbank and international transfers between all EU and EEU banks.
Current availability depends on each bank and the type of account held. At present, Santander Totta and Millennium BCP have already launched the service. The state-owned bank, Caixa Geral de Depósitos (CGD), has not. It is essential to consult your bank to determine pricing of any associated commissions as well as how to use the service. Also note that MB Way also allows for immediate transfers within the Multibanco network.
The EU has put 17 jurisdictions on a blacklist: American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macau, Marshall Islands, Mongolia, Namibia, Palau, Panama, St Lucia, Samoa, Trinidad and Tobago, Tunisia and the United Arab Emirates. However, when contrasting the revelations in the Paradise and Panama Papers about international tax schemes, exposing some of the intricate ways that the world’s wealthy use to evade tax through offshore havens, it quickly becomes apparent that the EU has chosen to target countries with little economic or political weight. Continue reading
For many years, Offshore Property Companies have been a popular solution, although sometimes practices could be a bit “grey” in nature. Due to repeated problems with tax evasion, Portuguese legislation eventually changed, penalising these structures. Offshore Companies began to suffer an array of punitive measures that turned them untenable. Other than direct ownership, property buyers are faced with a choice between Non-Resident Companies, registered in a foreign jurisdiction not on Portugal’s “black-list”, or Resident Companies, domiciled in Portugal.
However, the legislative landscape continues in flux. EU initiatives are instigating further change. Yesterday’s solution can become tomorrow’s problem, leading many owners to consider redomiciling their Delaware companies to Portugal.
Attacks from around the EU are challenging the Non-Habitual Residency Programme. The achievements of NHR are reflected in the numbers: between 2009 and 2012, the annual average was just one hundred applications. By 2013, requests climbed to 1,000. As of 2016, following legislative reform, registrations jumped to over 6,000 with tax breaks attaining €166,000,000, according to Ministry of Finance statistics. From 2010 through 2016, a grand total of 13,687 NHR applications were processed. 2017 is proving to be no exception, seeing exponential growth in demand. Over 80% of applicants are pensioners and the balance come from highly value added professions.
Beyond an unequivocal stance on climate change, the recent G20 summit also devoted significant attention to the issue of “tax transparency”. The US is currently the only major financial centre not to sign up to the Common Reporting Standard (CRS). The G20 communiqué threatens sanctions against countries not meeting the agreed international standards which include the full adoption of CRS.
Will the US give up its opaque stance (“Tax Haven USA”)? Will the OECD and the EU have the courage to blacklist the US if it fails to adopt CRS before 2018? The EU is now actively promoting the CRS as the standard it expects the US – and the rest of the world – to meet. We will watch with interest the EU blacklisting harmonisation process in the coming months.