[ESTABLISHING A BUSINESS ENTITY IN PORTUGAL] 391
principle which is without prejudice of the legislation of certain Member States. All restrictions on capital movements and payments between EU Member States are prohibited. Member States may, however, take justified measures with the aim of preventing breaches of its own legislation, including taxation and supervision of financial institutions. EU countries may also provide procedures for the declaration of capital movements for administrative or statistical purposes and take other justified actions on the grounds of public policy or public security. However, these measures and procedures should not constitute a means of arbitrary discrimination or a simulated restriction on the free
mentioned above, until the 5th tax period afterwards. For the aforementioned purposes, the first to be considered are the non-deductible net financing costs and the unused portion of the aforementioned limit that have been calculated earlier. Financial entities and intragroup financing have different regimes and/or particularities. V.3. Residency and Material Visa Restrictions Currently, Portuguese Law opens the possibility for foreign investors who invest either by themselves or through a company which they own, to apply for a Portuguese residence permit, if they reach a certain level of property investments, capital investments and/or job creation. The applicable legal regime is set forth in Law no. 23/2007, of 04 July, as amended, and the current provisions of the Law in this matter are applicable to all applications for a residence permit for investment made after 01 January 2022 – without prejudice to the possibility of renewing residence permits or granting or renewing residence permits for family reunification, as provided for in article 98 of Law no. 23/2007, of 4 July, in its current wording, when the residence permit for investment was granted under the legal regime applicable until 1 January 2022. Holders of a residence permit for investment activity have the right to family reunification, access to permanent residence permit, as well as the Portuguese nationality, in accordance with the legislation in force, while being able to move freely within the Schengen Area. It is also granted the right to benefit of certain public services, such as medical care and public education. In fact, foreign citizens and stateless persons who decide to engage in an investment
movement of capital and payments. V.2. Deductibility of Financing Costs
Portuguese Law allows the deductibility of financing costs. Generally, the net financing costs contribute to determining taxable profit up to the higher of the following limits:
EUR 1.000.000; or
•
• 30% of profit before depreciation, amortization, net financing costs and taxes. Net financing costs that are not deductible under the above terms may still be taken into account in determining the taxable profit of one or more of the five subsequent tax periods, after the net financing costs of that same period, subject to the aforementioned limitations. Whenever the amount of financing costs deducted is less than 30 % of the result before depreciation, amortization, net financing costs and taxes, the unused part of this limit is added to the maximum amount deductible, under the terms of the second limitation
ILN Corporate Group – Establishing a Business Entity Series
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