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VISAS

Residency through passive income or pension: Is Spain or Portugal better?

Spain's non-lucrative visa and Portugal's D7 visa are both designed for non-EU citizens to be able to live in these Iberian countries and are ideal for pensioners, but how do they compare? Which is easier and offers more benefits?

Residency through passive income or pension: Is Spain or Portugal better?
Spain's nlv vs Portugal's D7 visa. Photo: Florian Wehde and André Lergier / Unsplash

Spain’s non-lucrative visa, also known as the NLV, is an authorisation that allows non-EU foreigners to stay in Spain for a period of more than 90 days without working or carrying out professional activities in Spain, such as retirees, by demonstrating that they have sufficient financial means. 

Portugal’s D7 visa provides residency status in Portugal to non-EU citizens, including retirees, who receive regular passive income. 

While they both sound similar at the outset, they are quite different when it comes to the requirements and what they offer.

Here’s a breakdown on Spain’s NLV vs Portugal’s D7. 

What are the income requirements?

NLV: For Spain’s NLV, in 2022 you must prove that you have a passive income of €27,792 per year. This number usually rises yearly as it must be 400 percent of the IPREM, so if you’re planning on applying in 2023, you’ll have to budget a little more.

READ ALSO: What are the pros and cons of Spain’s non-lucrative visa?

D7: For Portugal’s D7 visa, you only have to prove that you have 100 percent of the minimum wage which is currently €7,620 per year. Portugal wins hands down in this case as you’ll have to have at least €20,000 more per year if you want to move to Spain.

Can I include family members?

NLV: Yes, the NLV allows you to bring dependent family members such as a spouse and children, however, you will need an extra €6,948 per year for each family member included.

D7: Portugal’s D7 also allows you to bring family members, but again it’s a lot more affordable than Spain’s NLV. You can bring your spouse or your dependent parents for an extra €3,810 per year and your children for an extra €2,292 per year.

Can it be renewed?

NLV: The NLV visa is a one-year visa, but it can be renewed for a further two years and then another two years after that. After five years of residency, you are eligible to apply for long-term residency and won’t have to keep renewing your NLV.

D7: The D7 is initially valid for two years, unlike the NLV. Afterward, you’ll be able to renew it for an additional three years.

Can it lead to citizenship?

NLV: Yes, you can eventually apply for Spanish citizenship after 10 years, but you will need to apply for long-term residency first.

D7: Yes, after you have five years of residency, you are able to apply for Portuguese citizenship, this is half the time that it would take in Spain.

Do I have to pay tax?

NLV: Yes, if you stay more than 183 days in Spain you will become a tax resident and will have to pay tax on your worldwide income. It’s worth remembering, however, that there are double tax agreements with certain countries meaning that if your passive income has already been taxed in your home country, you won’t be taxed again in Spain.

D7: Like in Spain, once you have lived for more than 183 days in Portugal you are subject to paying tax rates there, however, Portugal offers a special Non-Habitual Resident (NHR) status, which you can apply for if you have a D7 visa. This special tax regime offers free incentives and reduced tax rates for some for their first 10 years in Portugal.

Can I work with these visas?

NLV: No, as the name suggests, it’s a non-lucrative visa and you shouldn’t be working in Spain, even if your employer is based abroad. After your first year though you are able to exchange it for a work permit or to become self-employed (autónomo) through a process called residence modification.

READ ALSO: Should I change my non-lucrative visa for another residency permit in Spain?

D7: Like the NLV the D7 is only supposed to be for passive income and you do not have the right to work in Portugal, however, if you later apply for a residence visa, then this restriction will be lifted and you will be allowed to work.

Do I need private healthcare?

NLV: Yes, you will need to apply for private health care in Spain in order to apply for the NLV. Surprisingly private healthcare can be very affordable in Spain at around €50-200 a month and the services are very good.  

D7: Portugal’s D7 also requires you to get private health insurance. Private health care in Portugal can be slightly cheaper than in Spain at between €50 to €100 per month.

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For members

MOVING TO SPAIN

‘Frustrating, but don’t give up’: Your advice for Brits to moving to Spain post Brexit

How easy is it to move to Spain from the UK given that freedom of movement ended with Brexit? Several Britons who have made the move tell The Local about the problems that emerge as well as the time and costs involved.

'Frustrating, but don't give up': Your advice for Brits to moving to Spain post Brexit

According to the results of a survey we posted on our website, by far the most popular way for Brits to move to Spain, post-Brexit was via the Non-Lucrative Visa or NLV.

Several respondents said they applied for NLV, which is a one-year visa (that can be renewed), which allows non-EU citizens to live in Spain by demonstrating that they have sufficient financial means for themselves and, if applicable, their families.

Crucially, however, you are not allowed to work while on this visa and have to prove that your income comes from passive sources such as renting out a property back in your home country. 

The NLV is also one of the most expensive ways to move to Spain. In 2023, you must show that you have savings of at least €2,400 per month, and more for extra family members without being allowed to earn anything here. 

Wendy Hendry who moved to the Alicante province from Scotland said that the process of applying took around four to five months, while Terry Mulchinock said it took him a total of six months. Howard Evans who moved to the Valencia area on the other hand, was incredibly lucky when it took him just one week to apply because it was during the height of the pandemic in February 2021. 

READ ALSO: How long does it take to get a non-lucrative visa for Spain?

There was, however, a split between those who applied for the NLV themselves and those who used a lawyer to help them with their application. 

Shirley Johnson who moved to Galicia from Lancashire said: “I made the application myself (many people use lawyers and it costs thousands of pounds). There is guidance from forums and also from the Spanish Embassy in Manchester. I was not rejected”. 

While Hendry agreed that you “should try and apply yourself because companies who offer these services will try and rip you off”. 

On the other side, both Mulchinock and Evans disagreed and said that you should use the services of a lawyer to help you with your application instead. 

Mulchinock said: “We employed a lawyer who was very competent, copied our paperwork, bank statements, got police checks, medical forms … nothing difficult”. 

Evans agreed that the whole process was quite straight forward and he was pleasantly surprised because of his “excellent solicitor”. 

READ ALSO: What are the pros and cons of Spain’s non-lucrative visa?

Readers who applied for the NLV said they spent anywhere from €2,000 to around €3,500 on the application, including all the lawyers’ fees and paperwork, while those who paid the higher amount also included the cost of the private health care needed for the application. 

“With a year’s private health care for two people all in was nearly £7000,” explained Mulchinock. Evens paid a little less, but without health insurance, “approximately €3000 paid to Spanish solicitor,” he said. 

Family connections

But, although the the NLV was the most popular way, it wasn’t the only way that Brits have managed to move to Spain post-Brexit.

Some respondents said they applied for visas to live in Spain due to family connections, either through the family reunification visa or by getting a residence card by being a family member of an EU citizen. 

The family reunification visa allows non-EU nationals to bring family members to live with them in Spain, provided that they have already been legally resident in Spain for at least one year, while the residence card is for family members of EU citizens such as spouses, partners, dependent children, and dependent parents. 

READ ALSO – Q&A: Can EU nationals bring non-EU family members over to Spain?

Half of these people said that their applications were relatively straightforward and easy, while half said it was a lot more difficult than expected. 

Lili, who moved to the Valencia area from Malta, said they when she tried to apply for a residence card for her British husband, she found it very challenging. 

“I’m dual citizen, EU/British, so for me it was easy. My husband is British and whilst technically we should have no issues with his residency, we repeatedly faced situations where I have no problem (as an EU citizen) and he’s treated worse and we have to jump through hoops to fight for his rights,” she said. 

“The experience was maddening. We spoke to a few lawyers and each one was telling us something different about the paperwork we had to submit, different from what’s listed on the Spanish government website even. I think there is a lot of confusion since they think of him as a non-EU citizen not a husband of an EU citizen. Eventually, I submitted the documents myself and we’re still waiting for a decision,” Lili added. 

On the other hand, Josh Goodwin who applied for the family reunification visa and moved to Mallorca from Leeds, said he was “pleasantly surprised” and that although the paperwork was “tricky”, using a good lawyer helped.

Working visas 

Several other readers found other ways to legally move to Spain since Brexit had come into force. Some respondents said they applied for visas for highly skilled workers through their companies, but that these were mostly for temporary periods lasting around six months. 

Even though the companies mainly organised and paid for these types of visas, the applicants said they were very expensive and it was very difficult having to have all their certificates and documents apostilled and translated, the legal fees and the visa charges. 

One reader who preferred not to be named said: “Don’t expect anything to happen quickly or electronically – everything seems to need a visit in person… It was just so much easier pre-Brexit”. 

The final number of readers who answered our survey were in the process of trying to apply for various types of visas in the hope that one of them would be successful. 

Vanessa Campbell from Surrey who is trying to move to Jávea to look after her sick mother said that her residency application was rejected as she couldn’t prove she had enough savings, so she is trying the family reunification route instead.

She said the process “is far more complicated than I had thought. Be prepared to be frustrated but don’t give up hope”. She added that there had been no compassion from the authorities because of her difficult situation.

Overall, most of the people who answered our survey had found the process of moving to Spain post-Brexit very challenging and a lot more difficult than they had originally expected. 

Tips

The majority of respondents agreed that using a lawyer definitely helped and urged others to find a good one and do the same.

“Do your research and definitely use a lawyer,” one reader said, while another echoed these sentiments. “Use a reputable solicitor and follow their advice,” they advised. A third simply said: “Get a lawyer to do it, if you can’t afford a lawyer stay at home”. 

Those who did the applications themselves encouraged others to do as much research as they could. “Research, use forums for help, and keep the faith!” one said. 

Others simply thought the process was too difficult and urged Britons to fight back against the situation if they want to be able to move to other EU countries.

“Put pressure on the British government to join Single Market in a similar way to Switzerland or Norway, with freedom of movement, otherwise, you should have A LOT of patience, time and money,” they added. 

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