Portugal has been leading the way in cryptocurrency and Bitcoin over the last several years, positioning itself not only as a tourist destination but also as a serious contender for one of Europe’s most innovative centers for new businesses.
Government incentives and careful planning have bolstered the country’s economy, creating a stable environment for companies and individual traders to consider the country one of few crypto tax havens.
In this guide, we’ll explore the Bitcoin landscape in Portugal, covering everything from its legal status and regulatory environment to the best exchanges and wallet options for Portuguese users.
You’ll also find out more about:
What is Bitcoin?
Bitcoin is a decentralized digital currency that operates on a peer-to-peer network. It allows users to conduct transactions directly without needing an intermediary, such as a bank. Bitcoin relies on blockchain technology to ensure the security and transparency of its transactions.
Transactions with Bitcoin are conducted without intermediaries, which means lower fees and faster transfer times compared to traditional banking systems. Bitcoin can be used for a wide range of transactions, from purchasing goods and services to investing and transferring wealth across borders.
The Bitcoin community is diverse, comprising developers, miners, investors, and users who advocate for the principles of decentralization, financial sovereignty, and privacy. As Bitcoin continues to evolve, it faces both opportunities and challenges, including regulatory scrutiny, technological scalability, and competition from other cryptocurrencies.
The Bitcoin & Crypto Market in Portugal
The cryptocurrency market in Portugal has gained significant attention due to the country’s favorable regulatory environment and innovative stance.
Over the years, the country has seen substantial adoption of cryptocurrencies. The Central Bank of Portugal, for instance, has granted licenses to several crypto service providers, fostering a legal and operational framework for these businesses. The favorable tax regime has attracted a growing community of crypto enthusiasts, and initiatives like SL Benfica accepting crypto payments for tickets and merchandise highlight the integration of digital currencies into mainstream sectors.
Not to mention that Portugal has been transforming into a hub for crypto innovation, hosting numerous startups and events like ETH Lisbon and Rare Effect, which promote Bitcoin and blockchain technology. This vibrant ecosystem is supported by the country’s educated workforce, developed infrastructure, and proactive community efforts.
Moreover, Bitcoin adoption in Portugal is growing, with various sectors beginning to accept Bitcoin for payments. For instance, SL Benfica, a major Portuguese football club, accepts Bitcoin for tickets and merchandise. Additionally, several merchants and service providers have started accepting Bitcoin, reflecting a broader trend toward integrating cryptocurrency into everyday transactions.
According to our Global Intelligence Unit’s report on cryptocurrency, Portugal ranks 6th overall globally. Although it has a low crypto adoption rate, the exchange availability is high, and it has a most favorable tax regime.
Is Portugal Bitcoin-friendly?
Yes, recent clarification has confirmed Bitcoin’s legal status by the tax authorities in Portugal (Autoridade Tributária e Aduaneira). An official statement was given to a company planning to begin mining Bitcoin in the country, which was then subsequently published in the Journal de Negocios. In it, the financial authorities affirm that Bitcoin will be treated the same as any other currency.
Cryptocurrency Tax Regulations in Portugal
Officially, Portuguese tax authorities follow EU guidelines on cryptocurrency regulation. However, until late 2022, no official communication or guidelines on Bitcoin existed. Now, EU guidance on cryptocurrency stipulates that gains from buying or selling Bitcoin should not be subject to tax. Specific legislation on Bitcoin has been left for individual member-states to define.
In Portugal, businesses dealing in Bitcoin must pay income tax on capital gains, with rates ranging between 28% and 35%. However, individuals who operate within the crypto industry can enjoy several tax benefits:
Portugal crypto tax benefits
- Tax exemption for individuals: Profits from Bitcoin and other cryptocurrency transactions are not taxed, providing a favorable environment for individual investors.
- No VAT on transactions: The exchange of Bitcoin for other currencies is not subject to VAT, making transactions more cost-effective.
- Favorable corporate tax rates: While companies must pay tax on capital gains from crypto activities, the rates are competitive, ranging from 28% to 35%.
- No inheritance, wealth, or gift tax: Residents do not face taxes on inheritance, wealth, or gifts, making a crypto investment appealing.
- No tax on foreign income: Portugal does not tax foreign income, which is ideal for foreign nationals and their global financial interests.
Bitcoin and the Portugal NHR regime
Portugal’s non-habitual resident tax regime (NHR) should also interest Bitcoin traders. In Portugal, taxes are usually paid on a sliding scale. However, those who declare tax residency in the country can also benefit from the NHR regime, which allows individuals of high cultural and economic worth to enjoy lucrative tax reductions and exemptions.
However, the NHR ended for most applicants in January 2024. The Portuguese government’s State Budget Proposal for 2024 included modifications that determined the end of the non-habitual resident regime, introducing a transitional regime before the end of the NHR tax regime in 2025.
Some individuals can apply up until March 31, 2025, but the eligibility requirements for this deadline are more stringent. If you’re wondering how to apply for NHR in Portugal now, it’s necessary to meet at least one of the following criteria to qualify:
- Having an employment contract signed/to be signed by December 31, 2023
- Having a lease agreement or other contract for the use/possession of property signed by October 10, 2023
- Having a contract to buy property in Portugal signed by October 10, 2023
- Having children enrolled or registered in a school in Portugal by October 10, 2023
- Having a residence permit or visa valid from December 31, 2023
- Having an application for a residence permit or visa initiated by December 31, 2023
- Being a member of the household of anyone who meets the above criteria
Anyone who qualifies under these conditions will have NHR status from the date they become a tax resident—whether in 2024 or the first quarter of 2025—until December 31, 2033.
Financial Institutions for Bitcoin Exchange
In Portugal, several financial institutions and platforms facilitate the buying, selling, and trading Bitcoin. These include local cryptocurrency exchanges, international platforms, and traditional financial institutions embracing digital currencies. While you can utilize at least two ATMs in Lisbon, opting for a cryptocurrency exchange is better.
Cryptocurrency exchanges
A bitcoin exchange is an online platform where users can buy, sell, and trade their crypto, facilitating the transactions. You’ll find both local and international exchanges to conduct transactions.
- Coinbase: A widely used international cryptocurrency exchange that supports Bitcoin transactions and offers user-friendly interfaces and secure storage solutions.
- Kraken: A major global exchange offering comprehensive services for Bitcoin trading, including advanced trading tools and robust security measures.
- Bitstamp: Bitstamp is recognized for its trustworthiness and commitment to following regulations. It offers a user-friendly platform for Bitcoin trading, serving both new and seasoned traders.
- Uphold: This platform provides various financial services, such as buying, selling, and holding Bitcoin, and other assets like stocks and precious metals.
- Revolut: A digital banking service that enables users to easily buy, hold, and sell Bitcoin directly from their mobile banking app, providing accessibility and convenience for everyday use.
These institutions offer services, including secure storage, easy purchasing options, and advanced trading tools. This makes it easier for residents and businesses in Portugal to interact with Bitcoin and other cryptocurrencies.
Buying and Selling Bitcoin in Portugal
Bitcoin transactions in Portugal are made easy by the supportive regulatory landscape and many cryptocurrency platforms.
Buying Bitcoin in Portugal
1. Choose a reputable crypto exchange from the list provided.
2. If you are new, create an account.
3. Enable two-factor authentication (2FA) to protect your data and funds.
4. Make your deposit via bank transfer, credit card, or other supported methods on the platform.
5. Buy Bitcoin on the trading section of your platform, and it will be credited to your exchange wallet.
Selling Bitcoin in Portugal
1. Navigate to the trading option on your platform
2. Select the amount you wish to sell and confirm the transaction. You can also use peer-to-peer platforms like LocalBitcoins to buy or sell directly.
You can also use ATMs to purchase Bitcoin using hard cash. However, there will be higher fees involved per transaction.
Portugal Crypto Tax Information to Know
The local tax authorities have recently updated the laws regarding capital gains tax and overall crypto taxation. As these laws are constantly updated, it’s important to be familiar with the government entities responsible for the legislation of Portugal’s crypto tax, wealth tax, or capital gains tax to ensure you remain compliant.
Regulatory bodies in Portugal
- Banco de Portugal (Central Bank of Portugal) – A financial institution monitoring payments and cryptocurrency exchanges in Portugal.
- Autoridade Tributária e Aduaneira (Portuguese Tax Authority) – The government agency responsible for creating, administering, and enforcing the tax laws regarding cryptocurrency, taxes, duties, and contributions.
Is crypto tax-free in Portugal?
Yes, it is tax-free in Portugal if it isn’t your primary income. However, if crypto is your primary income, you must file a tax return and pay taxes. If you are uncertain whether it is your primary income or not, there are some factors to consider about tax on cryptocurrency and capital gains tax:
- How frequently do you trade in crypto?
- How long do you hold on to your digital assets or crypto assets
- How many trading platforms you’re operating
- Your profit level
- The source of your primary income
The Golden Visa Program and Cryptocurrency in Portugal
The Golden Visa program in Portugal is another added benefit to investing in Portugal. This citizenship-by-investment program allows individuals outside of Europe to obtain Portuguese residency by investing upwards of €250,000 in businesses in the country.
Companies like Global Citizen Solutions accept cryptocurrency payments for the Golden Visa services. Currently, you can pay in Bitcoin, Ripple, and Ethereum, and the payment itself is processed on the Coingate portal. Companies such as Global Citizen Solutions don’t have a direct point of sale for crypto on the website.
Take a look at our Portugal Golden Visa Ultimate Guide for 2024
Exploring Visa and Immigration Options for Portugal
If you're considering making the move to Portugal, it's essential to be informed about the various visa and residency options available. The Golden Visa Portugal program is an attractive option for many, offering residency to investors and their families. For those eyeing retirement in this beautiful country, the Retirement Visa (D7) is tailored for you. Digital nomads can take advantage of both short and long stay options with the Nomad Visa (D8). Meanwhile, the NHR - Non Habitual Tax regime provides significant tax benefits for new residents.
For the entrepreneurial spirit, Portugal offers the Entrepreneurship/startup Visa (D2) - Start-up Visa (open company) tailored for those looking to establish their businesses in the country. Those with specialized skills can explore the Work visa for highly qualified employees (D3). Additionally, if you have Portuguese ancestry, you might be eligible for Citizenship by descent.
However, moving to a new country isn't just about visas. If you're thinking of buying property, our guide on Buying Property in Portugal can offer invaluable insights. Dive deeper into the immigration process with our comprehensive Portugal immigration guide. For Americans specifically looking to relocate, we have curated information on Americans moving to Portugal. Lastly, one can't forget the importance of the NIF (Tax Registration Number), a crucial step in any relocation process.
Frequently Asked Questions About Bitcoin in Portugal
Is Bitcoin legal in Portugal?
Yes, Bitcoin is legal in Portugal and receives the same treatment as any other “real” currency.
Is Bitcoin taxed in Portugal?
Any profit made from the purchase or sale of cryptocurrency is not taxed in Portugal, nor are payments made to individuals in Bitcoin.
Where in Portugal can I buy Bitcoin?
You can use online platforms to buy Bitcoin, or also one of the two Bitcoin ATMs in Lisbon.
Is Portugal a Bitcoin-friendly country?
Yes, the Portuguese government has demonstrated a commitment in recent years to making Bitcoin-friendly policies. Many of these policies are what make Portugal considered a crypto tax haven
What are the risks of investing in Bitcoin in Portugal?
Whether you invest, buy, or sell bitcoin, risks are always associated with crypto transactions or trading. The volatile nature of the market, regulatory changes, and fluctuations in prices are the key factors that influence the market. In addition, security risks are always a prevalent factor that needs to be considered.
Can I mine Bitcoin in Portugal? What are the regulations?
Yes. However, all mining operations must comply with Portugal’s business regulations, which include tax obligations.
What is Bitcoin blockchain technology?
Bitcoin blockchain technology is a decentralized ledger system that records every trade of cryptocurrency across the globe.
Is crypto tax free in Portugal?
As of 2023, Portugal’s tax laws stipulate that gains from the sale of cryptocurrencies held for less than one year are subject to a flat tax rate of 28%. This new regulation marks a significant shift from the previous tax-free status and aligns Portugal’s crypto tax policies with those of other European Union countries.
For cryptocurrencies held for more than a year, the gains remain exempt from taxation, maintaining some of the previous advantages for long-term investors.
In addition to these capital gains taxes, income derived from crypto mining, staking, and other related activities is also taxable. For professional traders, crypto gains are treated as business income and taxed accordingly.
Can I use Bitcoin for everyday purchases in Portugal?
Yes, you can use Bitcoin for everyday purchases in Portugal, although its acceptance is not as widespread as traditional currencies.
