Portugal Taxes for US Citizens: Golden Visa & NHR Guide

Key Takeaways

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• US citizen Portugal residency tax benefits depend entirely on your residency route and actual relocation facts, not the Golden Visa itself.
• The original NHR regime closed in 2024, and its narrow successor IFICI applies only to specific professional roles and excludes most retirees and passive investors.
• Portugal taxes worldwide income for tax residents under progressive rates up to 48% plus solidarity surcharges, with 28% autonomous rates on certain capital income and gains.
• US citizens remain subject to worldwide US taxation regardless of residence, but the US-Portugal tax treaty and foreign tax credit generally prevent full double taxation.
• VIDA Capital guides investors through the Portugal Golden Visa process while clearly distinguishing route-versus-tax tradeoffs and recommending alternative pathways when appropriate.

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Contact VIDA Capital to Explore Your Portugal Residency Options

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How Portugal Taxes US Citizens in Practice

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U.S. citizens remain taxed by the United States on worldwide income regardless of where they live. They become Portuguese tax residents only if they meet Portugal's 183-day or habitual-residence tests under CIRS Article 16. Visa status and tax status are separate legal questions decided by different authorities. Holding a Golden Visa does not make you a Portuguese tax resident. Relocating without a Golden Visa can still make you one.

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Three terms appear constantly in this space and often get mixed together. Taxes in Portugal for US citizens describes the combined US and Portuguese outcome. Portugal tax residency for Americans describes when Portugal can tax worldwide income. IFICI Portugal (also called NHR 2.0) describes a narrow professional incentive. Tax exposure follows residency facts. IFICI works as a targeted regime, not a blanket benefit.

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When Americans Become Portuguese Tax Residents

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CIRS Article 16 establishes two independent tests. Meeting either test makes you a Portuguese tax resident.

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• 183-day test: More than 183 days in Portugal, consecutive or not, during any 12-month period beginning or ending in the tax year. That window can span two calendar years. A day counts only when it includes an overnight stay.
• Habitual-residence test: Maintaining a dwelling in Portugal under circumstances showing an intention to keep and occupy it as a habitual residence, even without reaching 183 days. A long-term lease, household arrangements, and use of the address as a primary fiscal residence are relevant indicators.

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Your visa category does not control this analysis. A Golden Visa holder who limits presence to the program's minimum stay and keeps no habitual Portuguese home generally remains a non-resident. A D7 holder who relocates fully usually becomes tax resident within months.

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Portuguese Income Tax Rates for Residents

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Once you are a Portuguese tax resident, CIRS Article 68 (as amended by Law 73-A/2025) applies a progressive IRS schedule to your worldwide income.

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• Up to €8,342: 12.5%
• €8,342–€12,587: 15.7%
• €12,587–€17,838: 21.2%
• €17,838–€23,089: 24.1%
• €23,089–€29,397: 31.1%
• €29,397–€43,090: 34.9%
• €43,090–€46,566: 43.1%
• €46,566–€86,634: 44.6%
• Above €86,634: 48%

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A solidarity surcharge under CIRS Article 68-A adds 2.5% on income between €80,000 and €250,000, and 5% above €250,000. Under CIRS Article 72, certain capital gains and capital income, including dividends not subject to withholding, are generally taxed at a 28% autonomous rate. The exact treatment depends on residency status, asset type, and whether you elect aggregation under the progressive brackets.

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Portugal has no general net-wealth tax. AIMI applies as an annual surtax on high-value Portuguese real estate above roughly €600,000 per owner. No inheritance or gift tax applies for close family. Transfers to others attract a 10% stamp duty.

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IFICI (NHR 2.0) Eligibility for 2026 Movers

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The original NHR regime closed to new applicants on January 1, 2024. New arrivals cannot rely on NHR as a planning tool.

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Its successor, IFICI, appears in Article 58-A of Portugal's Tax Benefits Statute (EBF) and in Ordinance 352/2024/1 of 23 December 2024. IFICI applies a 20% flat rate on qualifying Category A (employment) and Category B (self-employment) income for 10 consecutive years. The entry criteria are strict.

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• You must become a Portuguese tax resident and must not have been resident in Portugal in any of the preceding five years.
• You must perform a qualifying activity. These include higher-education teaching and scientific research, qualified roles under investment contracts, and highly qualified professions such as general directors, engineers, doctors, ICT specialists, and university teachers at RFAI-benefiting companies or companies exporting at least 50% of turnover. Roles at AICEP or IAPMEI-recognized entities, SIFIDE R&D personnel, employees of certified startups, and Azores and Madeira residents in qualifying roles also fall within scope.
• Registration must be filed through the Portal das Finanças by January 15 of the year following the year you become resident. A late registration shortens the 10-year window.

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Most retirees and passive investors do not qualify. Foreign pensions (Category H) are explicitly excluded from IFICI's foreign-income exemption and are taxed at ordinary Portuguese rates. If your income is primarily Social Security, a private pension, dividends, or capital gains, IFICI does not reduce the Portuguese tax on those streams even when you qualify professionally.

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Portugal Golden Visa Tax Implications For US Citizens explains the investment-fund tax treatment in greater detail.

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Secure Your EU Residency and a Path to EU Citizenship With a Portugal Golden Visa

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How the US Handles Portugal-Source Income

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The saving clause in Protocol paragraph 1(b) of the U.S.-Portugal income tax treaty allows the United States to tax its citizens as if the treaty did not exist. Four mechanisms then reduce or eliminate the resulting double tax.

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• Foreign Tax Credit (Form 1116): This credit reduces U.S. tax dollar-for-dollar by qualifying foreign taxes paid. Article 25(2) of the treaty re-sources income the U.S. taxes solely by reason of citizenship as Portuguese-source, which gives the credit a foreign-income base to work against. See IRS Publication 514 for the mechanics.
• Foreign Earned Income Exclusion (Form 2555): This exclusion removes up to $130,000 (2025) or $132,900 (2026) of active earned wages from U.S. gross income under the IRS bona fide residence test. Pensions, Social Security, dividends, and rental income are not foreign earned income and cannot be excluded.
• Treaty re-sourcing under Article 25(2): Because Portuguese income tax rates often exceed U.S. federal rates, the foreign tax credit frequently reduces U.S. tax on Portuguese-source income to zero for residents who have relocated.
• Totalization Agreement: The U.S.-Portugal Totalization Agreement (in force since August 1, 1989) eliminates dual social security coverage. A U.S. employer sending an employee to Portugal on an assignment expected to last five years or less can maintain U.S. Social Security coverage by obtaining a Certificate of Coverage from the SSA.

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Tax Treatment by Income Type

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U.S. salary earned in Portugal: Portugal taxes this as Category A income under the progressive IRS schedule. The FEIE may exclude up to $132,900 (2026) from U.S. tax when you meet the bona fide residence test. Remaining U.S. tax usually gets offset by the foreign tax credit on Form 1116.

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Private pension and 401(k) distributions: Under Article 20(1)(a) of the U.S.-Portugal treaty, private pension distributions are taxable in the recipient's country of residence, which means Portugal, as Category H income. The saving clause preserves the U.S. right to tax its own citizens. Article 25(2) re-sourcing and Form 1116 credits typically prevent double taxation. IFICI does not reduce the Portuguese rate on pensions.

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U.S. Social Security: Portugal may tax these benefits as Category H income once you are resident. The U.S. also retains taxing rights under Article 20(1)(b) as the paying state. Portugal grants a credit under Article 25(3)(a) for U.S. tax paid. The FEIE does not apply to Social Security.

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Dividends and capital gains: Under CIRS Article 72, certain capital gains and capital income, including dividends not subject to withholding, are generally taxed at a 28% autonomous rate. The exact rate depends on residency status, asset type, and whether you elect aggregation under the progressive brackets. U.S. citizens report the same items on Schedule D, and the foreign tax credit offsets the U.S. liability in many cases.

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Portuguese rental income: Portugal usually taxes this at a 28% autonomous rate under CIRS Article 72 as Category F income. Residents may elect to aggregate it with other income under the progressive brackets. U.S. citizens report it on Schedule E, and the foreign tax credit applies.

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How Portugal Taxes U.S. Social Security Benefits

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Portugal may tax U.S. Social Security as Category H income once you become a Portuguese tax resident. The treaty also lets the U.S. tax it as the paying state under Article 20(1)(b). Portugal grants a credit under Article 25(3)(a) for U.S. tax paid on the same amount, so the same benefit does not suffer full double taxation. The net result depends on each country’s rate and the credit calculation.

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How the 85-15 Rule Really Works

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The 85-15 rule comes from U.S. law, not Portuguese law. It refers to the U.S. Internal Revenue Code Section 86 mechanism under which up to 85% of Social Security benefits enter U.S. gross income once provisional income exceeds the adjusted base amount. The base amounts are $25,000 (single) and $32,000 (married filing jointly). The adjusted base amounts are $34,000 (single) and $44,000 (married filing jointly). Below those thresholds, a smaller percentage, or none, is included. Portugal applies its own domestic Category H rules independently. The 85% figure plays no role in Portuguese tax calculations.

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Choosing Between the Golden Visa, D7, and D8

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The residency route you choose drives your long-term tax exposure. The Golden Visa and the D7 or D8 visas create very different tax outcomes.

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• Portugal Golden Visa: Requires only 14 days in Portugal every two-year period. Most holders who meet only the minimum stay and keep no habitual Portuguese home remain non-residents for tax purposes, taxed by Portugal only on Portuguese-source income. The Golden Visa works as a residency and mobility tool rather than a tax shelter.
• D7 and D8 visas: These visas are designed for relocation. Holders who move to Portugal and meet the Article 16 tests become tax residents subject to Portuguese worldwide taxation. They may also qualify for IFICI when their professional activity fits the regime.

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A full comparison of stay requirements, income thresholds, and tax-residency consequences appears in Portugal Golden Visa vs D7 Passive Income Visa: 2026.

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Golden Visa Status and Tax Residency

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The Golden Visa, or ARI investment residence permit, comes from AIMA, the Agency for Integration, Migrations and Asylum, which took over these functions from SEF on 29 October 2023. Tax residency comes from the Portuguese Tax Authority under CIRS Article 16 facts. A holder who meets only the minimum 14-day stay every two years and maintains no habitual Portuguese home generally remains a non-resident taxed only on Portuguese-source income. Exceeding 183 days or establishing a habitual Portuguese home changes that result regardless of which visa you hold.

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Real Tradeoffs When Moving to Portugal

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Relocating to Portugal offers lifestyle benefits and also brings concrete tradeoffs that deserve careful review.

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• Worldwide taxation: Once you are a Portuguese tax resident, Portugal taxes worldwide income under progressive IRS rates with a top marginal rate of 48% on income above €86,634, plus the Article 68-A solidarity surcharge on income above €80,000.
• IFICI is narrow: Most retirees and passive investors do not qualify, and the old NHR regime has closed.
• Bureaucracy: Portuguese public administration remains paper-intensive and largely conducted in Portuguese. Tax filings, residency renewals, and banking usually require professional support.
• Cost of living: Lisbon and Porto have seen significant price increases. Budget assumptions from five years ago often no longer hold.
• Language: Day-to-day administration requires either Portuguese fluency or ongoing reliance on translators and advisors.
• Dual reporting: U.S. citizens always file a U.S. return regardless of residency, plus FBAR (FinCEN Form 114) and potentially Form 8938 for foreign financial assets.

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How VIDA Capital Supports US Investors

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VIDA Capital is an advisory firm that guides investors through the Portugal Golden Visa process. The team acts as a direct liaison between the investor, their legal counsel, and the VIDA Fund. VIDA Capital explains route-versus-tax tradeoffs clearly and often recommends the D7 or other pathways when the Golden Visa does not match a client’s life plan.

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VIDA Capital’s clients invest in the VIDA Fund, an asset-backed fund focused on acquiring and transforming undervalued hospitality businesses in Portugal. The strategy gives hotels a second life while targeting capital growth. The VIDA Fund has a 6.5-year lifecycle per fund and a stated target to double investors’ money in that period. Historical returns never guarantee future returns. VIDA Fund I raised over €20 million from more than 50 investors, with over 100 Golden Visa applications submitted. VIDA Fund II is now open.

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Fee transparency sits at the center of the VIDA Capital approach. The VIDA Fund charges a 1% subscription fee paid to the fund manager. Government fees are disclosed in full: €618.60 initial submission per family member, €6,179.40 card issuance per family member, €3,023.20 per renewal per family member, and €250 citizenship fee per family member. Typical legal fees run between €16,000 and €20,000 depending on the firm.

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Secure Your EU Residency and a Path to EU Citizenship With a Portugal Golden Visa

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Golden Visa Process and Timeline

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The Portugal Golden Visa program remains open and active in 2026. The minimum qualifying investment is €500,000 through eligible investment funds. The process usually spans 12 to 18 months, and having a lawyer manage the process is essential at every stage.

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Upon approval, you receive a temporary residency permit valid for two years. Golden Visa holders then renew for two additional two-year periods. Because approval card issuance usually takes a year, most investors likely need only a single renewal instead of two within the five-year period. You must maintain your investment and meet the 14-day-every-two-years stay requirement throughout. After five years, you may apply for permanent residency.

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Family members who can be included in the same application include your spouse or common-law partner, with a marriage certificate or other proof of relationship accepted. Dependent children who are full-time students, not working, and unmarried throughout the program until the Golden Visa application also qualify. Parents or in-laws who are over 65 or financially dependent on the main applicant can join under the same investment.

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During the residency period, the Golden Visa grants residency rights in Portugal only. Holders may travel visa-free within the Schengen area for up to 90 days in any 180-day period. Once Portuguese citizenship is obtained, full EU rights apply.

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Citizenship Timing After the 2025 Framework

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Portugal’s Parliament passed a new framework that introduced longer timelines in October 2025. Under the new framework, once implemented, the residency requirement is expected to extend to 10 years before qualifying for citizenship. The law has not yet entered into force and remains subject to final approval and legal review.

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Once implemented, nationals of Portuguese-language countries (CPLP) and EU citizens are expected to have a reduced citizenship residency requirement of seven years. The law has not yet entered into force. The new law should apply to all Golden Visa applicants except those who have already submitted their citizenship application before the new law is published.

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How Portugal Compares to Other EU Options

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Portugal currently stands out as one of the only countries in Europe offering access to citizenship without relocation. Spain no longer offers a Golden Visa program. Greece requires seven years of living there and paying taxes to qualify for long-term residency. Portugal’s 14-day-every-two-years requirement makes it uniquely competitive as a Plan B for U.S. families who want EU residency and a path to citizenship while keeping their current lives in place.

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For a broader assessment of whether the program makes financial sense, see Is Portugal's Golden Visa Worth It for US Investors?

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Frequently Asked Questions

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Is NHR Still Available?

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The NHR regime closed to new applicants on January 1, 2024. IFICI now serves as the narrow successor and is available only to individuals performing qualifying professional activities in scientific research, innovation, higher education, and related fields. Most retirees and passive investors do not qualify for IFICI.

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Do I Lose My Social Security If I Move to Portugal?

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U.S. citizens may continue to receive Social Security benefits while living outside the United States, provided they remain eligible and reside in a country where the SSA can send payments. Payments generally cannot be sent to restricted countries such as Cuba, North Korea, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan, except under limited exceptions. The core issue for Portugal involves taxation rather than eligibility. Once you are a Portuguese tax resident, Portugal may tax your Social Security as Category H income, and the U.S. retains taxing rights as the paying state. The treaty provides a credit mechanism to prevent full double taxation on the same payment.

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Will I Be Double-Taxed?

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The foreign tax credit on Form 1116 and the Article 25 re-sourcing mechanism in the U.S.-Portugal treaty aim to prevent the same income from being fully taxed twice. Because Portuguese rates are often higher than U.S. federal rates, the credit frequently offsets the U.S. liability entirely on Portuguese-source income. Reporting obligations remain dual, since you file in both countries, but the economic burden usually does not double.

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Does the Golden Visa Give Me EU Citizenship?

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The Golden Visa grants residency rights in Portugal and opens a path toward Portuguese citizenship after the statutory residency period. During the residency period, holders may travel visa-free within the Schengen area for up to 90 days in any 180-day period. Full EU rights, including the right to live, work, and study across EU member states, arrive only after you obtain a Portuguese passport.

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Do I Have to Live in Portugal to Keep the Golden Visa?

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The minimum stay requirement is 14 days in every two-year period. This feature makes the Golden Visa a viable Plan B for U.S. families who do not intend to relocate immediately but want to preserve the option of EU residency and a path to citizenship.

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Can I Include My Family?

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Your spouse or common-law partner can be included, with a marriage certificate or other proof of relationship accepted. Dependent children who are full-time students, not working, and unmarried throughout the program until the Golden Visa application also qualify. Parents or in-laws who are over 65 or financially dependent on the main applicant can join the same application under the same investment.

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Conclusion: Choose Your Route, Then Model the Tax

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Your tax outcome follows your residency facts and not your visa brand. A Golden Visa holder who meets only the minimum stay requirement and keeps no habitual Portuguese home generally pays no Portuguese tax on foreign income. A D7 holder who relocates fully becomes a Portuguese tax resident subject to worldwide taxation and may or may not qualify for IFICI depending on their professional profile. The practical framework is simple. Choose your route based on your life plan, then model the tax consequences of that route with qualified advisors on both sides of the Atlantic.

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VIDA Capital is the advisory firm that draws this distinction clearly, connects investors to the asset-backed VIDA Fund, and recommends alternative visa pathways when the Golden Visa does not fit. If you are a U.S. citizen stress-testing a Portugal move, the conversation starts with route clarity and then moves to tax modeling.

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Secure Your EU Residency and a Path to EU Citizenship With a Portugal Golden Visa