D7 vs D8 Visa Portugal: Comparing the Passive Income and Digital Nomad Visas

Are you considering moving to Portugal but feeling uncertain about the visa option? The D7 and D8 visas offer distinct pathways for different lifestyles, so it’s essential to understand their unique features.

The Portugal D7 Visa, often called the Passive Income Visa, is ideal for those with stable income sources like pensions or investments. Meanwhile, the D8 visa caters to digital nomads, allowing remote workers and freelancers the freedom to work from anywhere.

In this guide, we’ll expand on:

•  What is the Portugal D7 Visa
• What is the Portugal D8 Visa (Digital nomad Visa)
• D7 vs Digital Nomad Visa Portugal: Key differences
• D7 vs D8 Visa benefits
• Eligibility requirements for the D7 Visa vs. D8 Visa in Portugal
• D7 and D8 Visa requirements, application process, and timelines

What is the Portugal D7 Visa (Passive Income Visa)?

The Portugal D7 Visa, or the Passive Income Visa, is a residency option for non-EU/EEA and non-Swiss citizens. It is specifically designed for individuals who can demonstrate a stable source of passive income from abroad. This visa is ideal for investors and pensioners with income from rental properties, investment dividends, royalties, or similar financial assets.

Introduced in 2007, the D7 Visa is a popular route to residency in Portugal that allows holders to reside in the country without engaging in local employment. To qualify, applicants must provide evidence of a sufficient and steady passive income to support themselves and any dependents during their stay.

What is the Portugal D8 Visa (Digital Nomad Visa)?

Also known as the Digital Nomad Visa, the Portugal D8 Visa is a residency permit designed for remote workers and digital nomads who want to live in Portugal while working for companies based outside the country or who have their own business and are working free-lance.

This visa is intended explicitly for non-EU/EEA and non-Swiss citizens and offers a pathway for individuals to establish temporary residency in Portugal without engaging in local employment. To qualify, applicants must demonstrate a stable and reliable source of income from their remote work or business activities.

The D8 Visa includes options for different durations of stay. The Short Stay Visa caters to those looking to experience Portugal temporarily, allowing for a stay of up to one year. Conversely, the Long-Stay Visa is suited for individuals planning to reside in Portugal for extended periods. Initially valid for two years, this residency permit can be renewed for three more years.

After five years of holding the D8 Visa, individuals may become eligible to apply for permanent residency or Portuguese citizenship, subject to meeting specific criteria, such as demonstrating proficiency in Portuguese (A2 level) and maintaining a clean criminal record.

D7 Visa vs D8 Visa Portugal: A Side-By-side Comparison

D7 vs D8 Visa Portugal: Comparing Eligibility Criteria

When exploring options for living in Portugal, it’s crucial to understand the eligibility criteria for both the D7 and D8 visas to find the best fit for your unique circumstances.

Portugal D7 Visa eligibility criteria

• Stable passive income: Applicants must demonstrate a steady source of passive income, such as pensions, rental income, or dividends, sufficient to cover living expenses in Portugal.
• Minimum income requirement: Applicants generally need to show an income above the Portuguese minimum wage, with a monthly income of around €820 considered adequate.
• Proof of accommodation: Evidence of suitable accommodation in Portugal is required, such as a rental agreement, property ownership documents, or a host’s letter.
• Health insurance: Valid health insurance covering medical needs in Portugal must be provided and meet local standards.
• Criminal record check: A clean criminal record from the applicant’s home country or recent country of residence is necessary to ensure good character.

Portugal D8 Visa eligibility criteria

• Stable remote income: Applicants must show a reliable income from remote work or freelance activities to support their stay in Portugal.
• Minimum income requirement: Generally, an average monthly income of around €3,280 is required, although this can vary depending on individual circumstances and consular requirements.
• Proof of accommodation: You must provide evidence of accommodation in Portugal, such as a rental agreement, property ownership documents, or a host’s letter confirming your address.
• Health insurance: A valid health insurance policy that covers the applicant in Portugal must be provided.
• Criminal record check: A clean criminal record from the applicant’s home country or recent countries of residence where the applicant resided for more than a year is required.

D7 vs D8 Visa Required Documents

While the required documents for Portugal’s D7 and D8 Visas share some similarities, each visa type has specific documents tailored to its unique eligibility criteria.

Portugal D7 Visa required documents

• Proof of income: Documentation such as bank statements, pension statements, or rental agreements showing stable and adequate income.
• Accommodation proof: A rental contract, property ownership documents, or a host’s confirmation letter indicating the address and suitability of accommodation.
• Health insurance policy: A valid health insurance policy covering the applicant in Portugal, meeting local requirements.
• Criminal record certificate: An official certificate or police clearance from the applicant’s home country, translated into Portuguese if necessary.
• Valid passport: A passport with a validity period of at least six months beyond the intended stay in Portugal and enough blank pages.
• Completed application form: The completed D7 Visa form with personal details, proof of payment, and other information required for the Portuguese Consulate.

Portugal D8 Visa required documents

• Proof of remote work income: Documents such as contracts, bank statements, or invoices show a stable and sufficient income.
• Accommodation proof: A rental contract, property ownership documents, or a host’s confirmation letter with your address in Portugal.
• Health insurance policy: A health insurance policy that covers medical needs in Portugal.
• Criminal record certificate: An official certificate or police clearance from the applicant’s home country or countries where applicants resided for over a year, translated into Portuguese if necessary.
• Valid passport: A passport with at least six months’ validity beyond the intended stay in Portugal.
• Completed application form: A completed D8 Visa form with personal details and other required information.

D7 vs D8 Visa Portugal: Visa Application Processes

Now that we’ve highlighted the key eligibility and document requirements for the D7 and D8 Visas, it’s essential to understand the difference between the D7 and D8 Visa in Portugal, with regard to the application processes. This knowledge will help you determine which Portugal Visa option best suits your immigration needs. By comparing the steps involved in each process, you can make an informed decision and prepare effectively for your move to Portugal.

D7 Visa application process

1. Gather documentation: Compile all required documents, ensuring they are current and meet Portuguese standards. This includes proof of income, accommodation, health insurance, and criminal record clearance.
2. Apply: Submit your completed application form and all supporting required documents to your home country’s Portuguese Consulate or Embassy.
3. Attend an interview: You may be required to attend an interview at the consulate to discuss your application and clarify any details.
4. Processing time: Processing times can vary, typically from several weeks to a few months, during which your application will be thoroughly reviewed.
5. Receive visa: If your application is approved, you will receive the D7 Visa, allowing you to enter Portugal. Upon arrival, schedule an appointment with the Immigration and Borders Service (AIMA) to finalize your residency permit.

D8 Visa Application Process

1. Gather required documents: Prepare all necessary documents, ensuring they meet the requirements for the D8 Visa, including proof of remote income, accommodation, health insurance, and a clean criminal record.
2. Apply: Submit your application form and supporting required documents to your home country’s relevant Portuguese Consulate or Embassy.
3. Attend an interview: Similar to the D7 process, you may be required to attend an interview at the consulate to discuss your application.
4. Processing time: The processing time for the D8 Visa generally ranges from a few weeks to a couple of months, during which your application will be reviewed.
5. Receive visa: If approved, you’ll receive the D8 Visa, granting you entry into Portugal. After your arrival, schedule an appointment with AIMA to complete the residency permit process.

D7 vs D8 Visa Portugal: Tax Implications for Passive Income Earners and Digital Nomads

When considering the D7 and D8 visas, it’s important to understand how tax changes in Portugal will affect you. Starting 1 January 2024, there have been significant shifts in tax regulations, mainly due to the phase-out of the Non-Habitual Resident (NHR) tax regime, which impacts both visa types.

Tax implications for Portugal D7 Visa holders

• Income tax: Previously, the NHR regime offered great tax benefits, such as lower rates on certain types of income and exemptions for foreign income. However, now that the transitional period is in effect, those who didn’t secure NHR status can still apply until 31 March 2025. D7 visa holders will now face Portugal’s standard income tax rates, which range from 14.5 to 48 percent, depending on how much you earn. Under the new Tax Incentive for Scientific Research and Innovation, applicants whose income comes from specific sectors like IT, tourism, and audiovisual may qualify for attractive tax exemptions and incentives. When moving to Portugal, you will need to get an NIF number (Portuguese tax identification number) from the tax authorities or from a lawyer. This number is required to make any significant financial payments in the country). Non-EU nationals will also need a fiscal representative. 
  
• Social Security contributions: D7 Visa holders generally don’t have to pay Social Security unless they are self-employed or running a business. However, if you do any form of active work, you must contribute to Social Security.

Tax Implications for Portugal D8 Visa Holders

• Income tax: The end of the NHR regime also affects D8 visa holders, who often work remotely or as freelancers. Previously, they enjoyed lower tax rates and exemptions on some foreign income. Like D7 holders, D8 visa holders will be subject to Portugal’s standard progressive tax rates, ranging from 14.5 to 48 percent, based on total income from Portuguese and international sources. However, under the new Tax Incentive for Scientific Research and Innovation, those in specific fields like IT, tourism, and audiovisual may qualify for appealing tax exemptions and incentives.
  
• Social Security contributions: D8 Visa holders must contribute to Portugal’s social security system based on their income from remote work or freelance gigs. These contributions are mandatory and calculated based on reported income, covering health, retirement, and other benefits.

D7 vs D8 Visa Portugal: Which One to Choose

Deciding between the D7 Passive Income Visa and the D8 Digital Nomad Visa involves weighing your income sources, lifestyle, and long-term goals. The D7 Visa suits those with stable passive income, like pensions or investments, looking for a serene retirement in Portugal. It allows living without engaging in local work, making it ideal for individuals prioritizing stability.

On the other hand, the D8 Visa is tailored for remote workers who wish to maintain their careers while enjoying life in Portugal. It requires proof of active income and offers the flexibility to work remotely, appealing to digital nomads and freelancers.

Both visas lead to permanent residency after five years, but the D7 is often more straightforward for family reunification, while the D8 entails more documentation for dependents. Your final choice should reflect your financial situation and lifestyle aspirations, ensuring a smooth transition to life in Portugal.