If you want to manage your wealth from Europe, the choices become narrower due to the high taxation and immigration hurdles placed by the European Union.

If you want a place that is friendly to foreigners and where there are fewer language and cultural barriers, then the choice becomes even narrower.

If you want a place that can act as a plan B destination for your family, where you can escape if needed, without having residency requirements, then the choices become even fewer.

Portugal has been consistently voted as the best golden visa program in the world, and now Madeira, Portugal, has been voted as one of the safest islands in Europe free of coronavirus, but that is only a small part of the story. 

The best-kept secret is that this small country and this small island in the territory are becoming America’s plan B destination for family office establishment, and here is why.

Why Portugal

When establishing a family office, many American families ignore the lifestyle and cultural aspects. However, a properly planned family office involves consideration of where the family members can move to in case things go badly in their country. 

In the United States, of course, things go badly regularly. With the coronavirus pandemic hitting the continent, this is something to seriously think about.

Culture is also a crucial aspect of comfort. For example, you wouldn’t really want to be a Jewish family living in Dubai or a Muslim family establishing its family office in Israel. It goes to the way your children and their children will be treated by the political, economic, and social network of their new plan B destination.

So, let us look at why Portugal hits all the boxes for wealthy families by examining the main aspects of establishing your family office structure:

Wealthy families will feel completely at home in Portugal. After all, Portugal was the colonial power that shaped Brazil. Portuguese, English, and Spanish are commonly spoken, which means that families and their children will be automatically accepted into society; this aspect is extremely vital.

Your investment adviser, banker, lawyer, and financial consultant will see you immediately as a part of his or her culture, and transactions and investments will be easier. Your children will have access to top European universities as well as immediate acceptance into the city’s financial and business life. Portugal is a small country with a bright future that welcomes foreign investment with open arms.

Another vital fact is that Portugal is exceptionally safe. It has one of the lowest crime rates in Europe and almost no refugee problems. Portugal has moved away from a socialist mentality and seeks to attract wealthy families, so the value of wealth preservation is ingrained into the culture.

So far, Mundo gives Portugal 10/10 for a family office in Europe.

Residency and citizenship 

There is no point in having a family office in a place you can’t visit or get to if there are problems. Many wealthy families holding their money in the United States have experienced this issue when they were denied visas and could not even get to see their bankers. In this matter, the Portugal Golden Visa has been voted the best in Europe. Further, you are entitled to citizenship in 5 years after obtaining your Golden Visa.

The amazing thing is that you don’t have to live in Portugal to keep your Golden Visa status. You only need to visit for an average of 7 days per year in a five-year period; this means you can travel visa-free throughout the whole Schengen area. Amazing!

The Portugal Golden Visa option allows you multiple investment pathways: real estate investment and SIF fund investment. The general investment to obtain a Golden Visa is EUR 350,000-500,000.

Again, Portugal scores 10/10.

The whole point of having a family office is choosing a jurisdiction where personal and corporate tax is optimized.

Portugal has an exciting tax regime for the non-regular resident, which we call the non-dom regime. This means that, as a resident, if you make the proper applications (our consultants are skilled in this), your worldwide income is taxed at a zero rate for ten years. 

What happens after that period depends on what pre-migration trust and tax planning you do. Effectively, you can utilize this structure to have zero tax on worldwide income forever if you combine it with a trust established during this period. 

There are complexities in this arrangement, and you will need to make a detailed application. Further, you may need another tax residency, such as Panama’s, to demonstrate that you are actually part of some tax regime. It’s not simple, but with the right documentation, you can receive tax-free personal income in Europe, in a European bank, perfectly legally. That sort of benefit is priceless!

Mundo scores this aspect of the non-dom regime as 9/10, almost, but not quite perfect.

For more information on the Portuguese Golden Visa, please watch our video:

We are about to reveal a rather well-kept secret used by many European companies and family offices as their operating company structure: Madeira. A beautiful island near the Canary Islands known more for its outstanding port wines and glamorous lifestyle than its equally elegant tax regime.

Madeira is fully recognized by and compliant with all of the EU’s laws and legislations; it is even whitelisted. It is a part of the EU banking and financial system, giving you access to Europe and beyond, with only a 5% income tax.

Establishing a Madeira company has few requirements, such as minimum staff and capital, but these are not demanding for a family office. Further, Madeira has access to a high level of professional services, including lawyers and support staff, as well as allowing you to employ foreigners. The directors can also be family members who have obtained non-dom residency under the Golden Visa with no dividends tax payable on worldwide dividend income.

For a family office in Europe, Mundo gives Portugal a 10/10.

See our article on Madeira companies here.

We all know banking and bank account safety is essential in today’s world. For family offices, access to high-quality banking staff and safe banks is imperative.

Unlike Europe, Portugal is experiencing an investment boom due to its success in its Golden Visa Program. Its banks are, therefore, consistently growing in liquidity. Also, many European banks are represented there.

Portuguese private banking services are at a very high level with personalized service. Further, as the family will have Golden Visa status, Portuguese banks will generally consider them as residents and will not report them under CRS.  

Our experts have a special private banking team, which will help the family establish great relationships with top-tier Portuguese banks.

Mundo rating: banks in Portugal for resident and resident companies have a 10/10. They are amongst the safest in Europe and loyal to family office customers and new residents.

How to establish a family office in Portugal

A family office in Portugal is ideal for wealthy families. There are five easy steps:

STEP 1: 

Obtain the Golden Visa for the entire family.

STEP 2:

Establish a Madeira company as the family office structure (note that, if you use the Madeira company to employ staff, it can act as your Golden Visa company).

STEP 3: 

Appoint an advisory team for the company comprised of legal, investment, and accounting areas.

STEP 4:

Establish an excellent bank account in Portugal.

STEP 5:

Obtain an excellent worldwide insurance policy.

STEP 6:

Relax.

If you do not wish to obtain residency in Portugal via the Golden Visa, then you can still use Portugal as a family office structure by establishing a Madeira company combined with a Madeira international trust.

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