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I have following situation: Finnish migration office will take close to two years to process a residency application, while we want to move away to Portugal. But due to staying in Finland (Schengen area) longer than 90 days (on the basis of a pending residency permit application in Finland), we might have problems entering Portugal.

Background: My wife is Argentinian citizen, I am Estonian citizen with permanent residency in Finland. My wife has applied for a residency permit in Finland in November 2021, according to the migration office's chatbot, we ought to wait for another year in a queue for her case to be undertaken for consideration - we can not wait this long staying in Finland. We are trying to expedite it, but we are looking for other options as a backup.

One option that we have in mind: Have I understood correctly the Schengen area rule of 90/180 days - currently we are on holidays in Turkey (not Schengen area), if we will stay outside the Schengen area for 90 days consecutively, that would be September 30th - will my wife have her Schengen visa reset and she will be able to stay in any country of Schengen area for another 90 days, that would be until of December? If yes, will my wife be able to apply for a residency permit with me in Portugal during this time? Or is my wife able to apply for a residency in Portugal without resetting the Schengen visa? And will my wife be able to apply for a residency permit in Portugal while having a pending residency permit application in Finland?

Or despite the pending residency permit application in Finland, since my wife has stayed in the Schengen area for more than 90 days, is it considered a violation of 90/180 rule, so despite the reset, she will have problems entering other Schengen countries? If yes, can there be exemptions from problems and can we have it in writing prior to traveling?

Thank you in advance!!

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But due to staying in Finland (Schengen area) longer than 90 days (on the basis of a pending residency permit application in Finland), we might have problems entering Portugal.

You won't.

Have I understood correctly the Schengen area rule of 90/180 days...

Your understanding of the 90/180 calculation is correct. However, you have overlooked the fact that the 90/180 rule does not apply to your wife when she is with you. Instead, she is a beneficiary of the free movement directive 2004/38/EC. As a beneficiary of the directive, provisions in the Schengen Borders Code that are generally applicable to "third-country nationals" do not apply to her.

Or is my wife able to apply for a residency in Portugal without resetting the Schengen visa?

That is correct. You can travel together to Portugal right now, or as soon as you want, regardless of how long your wife has been inside or outside the Schengen area, and she can apply as soon as you get there.

It might get a little complicated if she wants to travel without you before getting her residence card (note the word "card" rather than "permit" in the directive), but it doesn't sound like she's planning to do that.

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