In a significant clarification that enhances the transparency and appeal of Portuguese investment vehicles, the Portuguese Tax Authority (Autoridade Tributária e Aduaneira) has issued an official binding ruling confirming that income distributed by venture capital funds to non-resident individual investors is exempt from withholding tax, provided certain conditions are met.

This confirmation, based on Binding Ruling No. 28123 (issued July 2, 2025), applies specifically to investors who are individuals and are not tax residents in Portugal.

Key Takeaways for Non-Resident Investors

According to Article 23 of the Estatuto dos Benefícios Fiscais (Portuguese Tax Benefits Statute), the general rule subjects income from participation units in venture capital funds to a 10% withholding tax. However, an exemption is granted to non-resident individuals provided that:

1.       They do not have a permanent establishment in Portugal to which the income is attributable;

2.       They are not tax residents in a jurisdiction classified as a tax haven (as per the official list published by the Portuguese Ministry of Finance in Portaria n.º 150/2004);

3.       They provide evidence of their non-resident status to the paying entity prior to the payment of income.

If these conditions are met, no withholding tax will apply to distributions made by Portuguese venture capital funds. However, if the non-residency status is not properly documented in time, the fund manager (as the withholding agent) is obliged to apply the standard 10% withholding tax rate.

Clarification on Tax Haven Jurisdictions

A jurisdiction is considered a “tax haven” if it is included in the official list published in Portaria n.º 150/2004, which is regularly updated by the Portuguese Ministry of Finance. This list includes countries or territories with tax regimes deemed significantly more favorable than Portugal’s, and where transparency and exchange of tax information may be limited.

Some of the jurisdictions currently on the list include:

·       Andorra

·       Anguilla

·       Bahamas

·       Barbados

·       Bermuda

·       British Virgin Islands

·       Cayman Islands

·       Guernsey

·       Isle of Man

·       Jersey

·       Liechtenstein

·       Monaco

·       Panama

·       Saint Kitts and Nevis

·       Saint Vincent and the Grenadines

·       Seychelles

·       Turks and Caicos Islands

A complete and up-to-date list can be consulted in the Diário da República or via the official website of the Portuguese Tax and Customs Authority.

It is the investor’s responsibility to ensure that their tax residency is not in one of these listed jurisdictions in order to qualify for the withholding exemption.

Implications for IAS Clients

IAS welcomes this confirmation, which offers further legal certainty to many of our clients investing through regulated Portuguese venture capital funds. These funds, often used as a qualifying investment for Portugal’s Golden Visa programme, are increasingly favored for their compliance, diversification, and tax advantages.

IAS remains available to assist investors in obtaining and submitting the necessary documentation to benefit from this tax exemption, and we continue to liaise with tax authorities, fund managers, and legal counsel to ensure full regulatory alignment.

For more information on how to obtain proof of non-residency or to understand whether your current country of residence qualifies, please do not hesitate to contact our team.