Looking At Madeira From A Different Angle: A Foreigner Living In Madeira
Updated: Apr 14
Madeira has received the World Travel Award as the “best island destination of Europe” for seven out of eight years in succession. The island’s year-round temperate climate, incomparable natural beauty, rich cultural heritage, gastronomy based on fresh and varied local ingredients, friendly and hospitable community are only some of its characteristics that attract millions of tourists and visitors to this unique spot in the Atlantic Ocean. In the past few years, however, particularly since the start of the COVID-19 pandemic, the Island has been attracting a new demographic that is choosing to make Madeira its home.
Amongst the newcomers are digital nomads, professionals who move to Madeira for short- and medium-term to work remotely or take a vacation, as well as people who are relocating to Madeira, to make the paradise island their new and long-term home.
Portugal, according to the Global Peace Index 2021, is the 4th most peaceful country in the world, ranking behind Iceland, New Zealand and Denmark. In addition to this fundamentally important characteristic, Madeira offers a range of favorable conditions that make it a very attractive place to live in. Aside from its breathtaking landscapes and mild climate, Madeira is a very affordable place, where the prices of real estate, healthcare, utilities, transport and use of technology are relatively low. Moreover, Madeirans are renowned for their hospitality and many people speak English, German or French. While learning Portuguese will ease integrating into the island seamlessly, one can quite comfortably get by speaking English. Various regional and international surveys find Funchal, the capital city of Madeira, on top of the list of cities with the best quality of life. It is a “Little Big City” that offers a cosmopolitan life without the stress and traffic associated with bigger cities.
While clearly there is no shortage of articles and blogs describing and admiring the myriad reasons why Madeira is a great place to live in, it is important to also look at life in Madeira from a different view point, paying attention to daily tasks and challenges that foreigners, especially newcomers may face while trying to relocate and integrate in their new home.
Depending on whether you are visiting, staying temporarily, or relocating long-term, there are a number of administrative and practical issues that you will face.
It is best to be well-informed and prepared before you make the move. Although not comprehensive and sufficient, there is a lot of information available online. Communicating with other foresigners that are in similar situations can also provide some general insight. However, more specific and thorough information is necessary in order to prepare for the transition.
Here are some basic questions that are relevant if you are planning to move to Madeira. Please visit our page regularly and read our further blog items about various aspects of living in Madeira.
What is a Taxpayer Identification Number and when do you need one?
You will need your NIF (Número de Identificação Fiscal) or Taxpayer Identification Number for numerous daily activities including opening a bank account, purchasing insurance policies, purchasing a car, signing up for internet and phone services, starting a company and purchasing property. In Madeira they often refer to this number also as “Número de Contribuinte.” If you are a couple, each one of you needs your own NIF. This number does not change and does not have to be updated or renewed. You can get your NIF in person at the tax office or have someone you know and trust, or a service provider get it on your behalf. If you are not in Madeira, then you will need a tax representative who will assume the responsibility to ensure that your tax affairs are in order. The service provider will often offer this as the NIF package. They will charge a fee for this service. If you hire a lawyer to do this, they often charge a substantial fee. It is, therefore, best to compare fees before you decide.
Do You Need Fiscal Representation in Portugal
For all non-resident individuals or companies having assets based in Portugal, it is a legal necessity to assign a fiscal representative. Non-resident taxpayers gaining taxable income in Portugal must assign a fiscal representative to guarantee that they obey the tax obligations in Portugal.
A fiscal representative acts on your behalf in relation to the Portuguese tax Department. Your Fiscal representative receives all your correspondence and notices from the Tax Department on your behalf, is able to access your Tax Portal (Portal das Finanças) on your behalf, informs you about your tax obligations and deadlines, and makes sure that you are in conformity with tax requirements.
Who Can Be Your Fiscal Representative?
Principally, any physical or legal person that has a fiscal address in Portugal and agrees to be your representative, qualifies for this task. This could be a family member, friend, accountant, lawyer or a company.
If you are going to apply for your NIF (Taxpayers Identification Number) in person, you can name your representative at the visit.
You may be giving a person or company the power of attorney to receive your NIF, you could issue a POA to the same person or a different person and have it submitted at the same time.
If you already have a NIF but have not appointed a representative yet, you can also name your representative through the portal of the Tax authorities (Portal das Financas).
After you receive your residency permit in Madeira and have a permanent address in Portugal, you will no longer need a fiscal representative and their address will automatically be removed from your file.
Do you need a residency permit and which one?
Depending on which country you come from, you may or may not need a visa to enter Portugal. If you are from an EU country, you can come and go freely and stay in Portugal for up to 90 days. You can get a Tax Identification Number, open a bank account, purchase a property or set up a company as a non-resident.
If you are a citizen of the European Union and plan to stay in Portugal for more than 90 days you must apply for a registration certificate (Certificado do registo de cidadão da União Europeia). It is a relatively simple process that requires submission of documents such as proof of identification and residency, an application form and paying a personal visit to the City Hall. In most cases, you should receive your residency within a couple of weeks.
If you are from countries outside of the EU, you must find out what kind of entry visa Portugal requires from citizens of your country. If you are from North America, UK, South Africa and most other non-EU countries, some of the most common forms of residency permits are the D2 Visa (Self-employed / Entrepreneurs), D3 Visa (Specific Specialization), D7 Visa (passive income holders & Retired), and the Golden Visa (Investment). There are other kinds of visa programs available too, but these are some of the most common programs.