On the 10^th. of August of this year (2006), the Governement finally approved the new law dealing with Residencias.

The new Residency Law regulates the free circulation and residency of EU Citizens in Portugal. Transposing the EU Directive of 2004, this legislation changes basic assumptions and definitions while greatly simplifying the compliance process for EU citizens. The statutes define three phases and are in harmony with similar measures being adopted throughout the 25 member countries of the European Community and Switzerland.

What are the advantages of holding Residência?

Apart from the fact that you are secure in the knowledge that you have the correct documentation to reside here, there are other advantages that can prove important to you: · A home-owner, in certain circumstances, can apply for the exemption of property taxes (Imposto Municipal Imobiliário “IMI”) and he will be able to avoid or reduce paying Capital Gains Tax in case the property in Portugal is his permanent home and the proceeds are also invested in another dwelling for permanent living. A resident is entitled to vote in local elections. The Portuguese Health Authorities has a reciprocal arrangement with the British National Health which provides for medical treatment.  Mortgages, bank loans and credit are more readily available.  Children over the age of 10 can be educated within the state system.  In most cases no importation duty on an E.U. motor vehicle when making application for residência. What are the disadvantages of being resident?

None.

The basic requirements are that you can prove to the Foreign Office that you will not be dependent on their social security system. Phase 1: Free Circulation - up to 3 months For periods less than three months, all that is required for an EU citizen to travel in Portugal is an Identity Card or Passport. No visa and no registration are required. Phase 2: Residency - more than 3 months If citizens wish to stay beyond three months, they must register with the Câmara (local Parish/Council) or in the town where they reside within 30 days following the initial period. Beyond presenting proper identification, the registration includes a self-declaration, stating the basis of the Residency: a) Employment or Self-Employment, b) Health Insurance and Declaration of Means (no lower than Portuguese national standards), c) Education or d) Family. It seems that this means that you also can remain a Resident in your home-country.

The purpose behind the Means Test and health insurance is to assure that new arrivals will not be a burden on Portugal’s social support system. Based on the self-declaration principle, no documentation is required to accompany this application. A Residency Registration Certificate (Certificado de Registo) is to be issued in the act and is valid for 5 years. Phase 3: Permanent Residency - more than 5 years After five years, a permanent Residency Card is required. This document is issued by the Serviços de Estrangeiros e Fronteiras. The only required documentation is an Identity Card or Passport and the original Certificado de Registo from the Câmara. Upon application, the foreign resident receives an acknowledging certificate with the final version - a photo ID “credit-card style” credential (Cartão de Residência) - to follow within 15 days.

The current 3-fold Residências remain valid and may be exchanged on demand. Loss of Residency As a foreign resident, you may continue to travel freely within the EU. Your Residency status will only be lost when absent from Por tugal for 2 consecutive years or when there is evidence of abuse of rights, fraud or a marriage of convenience. Fines Those who fail to comply with the new regulations will be subject to the following fines:

Lack of Registration: €400 - €1,500 Ongoing non-compliance: €500 - €2,500 Negligence: half of the above Conclusion With these simple, universal procedures being applied throughout the member countries of the European Union, it only makes sense to be in compliance. If you currently live in Portugal and intend to stay, yet don’t as yet have a Residência, now is the time to stop procrastinating.

If, like most people, you cannot come up with a single reason to the basic question: “Why not obey the law?”, then you have already answered the question.