Tax Planning - Portuguese NHR, ETFs and Capital Gains

[Goingtopt]

Hi,

I'm a Brazilian in the process of moving to Portugal, and establish myself as a NHR

Current economy in Brazil is shaky at best and my goal would be to take my savings with to invest in a strong currency (EUR/USD), rather than keeping it in the BRL ever devaluating roller coaster.

The goal is to be able to invest in stocks / ETFs in a tax efficient way.

Is there any setup that could allow me to do so ?

I've been talking to a lot of people and this is what I have in my mind so far (don't know yet if I got it all right, naturally. hence a discussion in the forum)

• So far, I understand that for Capital Gains in the NHR regime ,the same 28% applies to the non-NHR residents (no benefits there)
• The Islands (and related) Tax Heavens are off the table / blacklisted.
• I've heard a few people defending the usage of a Maltese incorporation setup claiming that actual taxes as low as 5% may be obtained. I'm under the impression that it may not be this straightforward:
  • Apparently, it requires at least 2 incorporations, with a Holding company and trading one.
  • You actually need to pay upfront the 35% tax to get a rebate 6-9 months later
  • The rebate value seems to vary. (Doing business in Malta)
  • The run rate cost of maintaining Maltese offshore is high. You REQUIRE to hire LOCAL secretary, Directors etc. With 2 incorporations, it appears that you are looking into a 15k-20k USD of fixed cost.
  • All this leads me to think that this may make sense but, maybe, only for very high assets.

Also, although I don't quite grasp the concept, some people claim that there may be some benefits in investing in ETFs that are domiciled in Ireland. I could not follow that line of thought though...

Would you have any tips, hints or additional research material ?

best regards

 

[aquarius]

If you plan to invest in ETF's than the currency does not matter. If however you plan to keep your savings uninvested then I would not be so sure if EUR/USD is really better than BRL. In that case think maybe about CHF or SGD.

 

[Goingtopt]

That is a valid point but while the money is in Brazil, there are very few ETF options in the market here.

The problem I'm trying to solve is:

- Is there any way in which I invest in mainstream, global stock / ETF market and, at the same time, benefit from the NHR regime to an extent.

Is there any structure in which I could lower the end to end taxes ?

 

[JustAnotherNomad]

You need to talk to a Portuguese tax lawyer. There are certain schemes that (are said to) work. I believe you would be giving a loan to your company and charge interest, something like that. It's not straightforward, so you must talk to an experienced lawyer.
There are a lot of pitfalls with the NHR regime.

 

[CaptK]

NHR is very complicated and you must be able to prove substance. You must have substance and CFC is a big part of the NHR requirement.

Cyprus non dom would be an easier option but being Brazilian, Portugal is a more preferred option.