Have you thought about all about Portugal for investors? Portugal’s real estate has, for some years, been a magnet for investors. The country has over 10 million residents population and millions more visit yearly for tourism. Although the Golden Visa route seems to have slowed the real estate investment scene for now, there are still many ways to invest in the country.
However, consider the perks and drawbacks of investing in the country. So this article will walk you through all about Portugal for investors. We’ll take a closer look at the attractive investment opportunities, alongside the considerations you need to make.
All about Portugal for investors – why invest in Portugal
Before we look at the considerations you need to make, let’s look at why investors have gravitated to Portugal for some time.
There are many amazing reasons investors love Portugal. The first is Portugal’s Golden visa program where you make a qualifying investment in exchange for Portuguese citizenship after five years.
Also, Portugal boasts of a stable political environment. The country has previously navigated economic challenges and is now becoming the destination for safe and secure investments. Here are some reasons why you should invest in the country.
Tourism
Portugal’s tourism industry has been booming in recent years, and the country is now a popular destination for tourists from all over the world. This is mostly because of the country’s mild climate, rich history and vibrant culture. This has created several investment opportunities in hotels, resorts, and other tourism-related businesses.
Low cost of doing business
Portugal is also a relatively low-cost country to do business in, with competitive corporate tax rates and labor costs. This makes it an attractive option for businesses looking to expand their operations or relocate to Europe.
Increased economic stability
Also, the influx of migrants, remote workers, and tourists is also making Portugal significantly more attractive in terms of economic growth. Plus, there’s a surge of interest in the real estate scene.
Favorable business policies
Portugal also has a liberal foreign investment scheme and favorable legal framework that rewards foreig investors. And beyond that, you can always invest in Portugal’s fast growing tech startup scene.
Thriving economy
Portugal’s economy has been growing steadily in recent years, and the country is now considered to be one of the most competitive in Europe. This growth has been driven by a number of factors, including increasing exports, rising tourism numbers, and government investment in infrastructure.
Highly skilled workforce
Portugal has a well-educated and highly skilled workforce. The country has a strong focus on education, and this is reflected in the high literacy rate and the large number of universities and colleges.
Strategic location
Portugal is located on the Iberian Peninsula, at the crossroads of Europe and Africa. This strategic location makes it an ideal base for businesses looking to access both European and African markets.
High quality of life
Portugal offers a high quality of life, with a warm climate, beautiful scenery, and a relaxed pace of life. This makes it an attractive option for investors looking to relocate to Europe.
Renewable energy
Portugal is a leader in renewable energy production, and the government is committed to increasing the use of renewable energy sources. Specifically, Portugal depends on hydroelectricity, wind and North African gas from Algeria. This has created a number of investment opportunities in solar, wind, and other renewable energy projects.
Technology
Portugal has a growing technology sector, and the government is providing several incentives to attract technology companies to the country. This has created several investment opportunities for startups and established technology companies.
Overall, Portugal is a very attractive proposition for investors. The country offers a stable political and economic environment, a skilled workforce, and a variety of attractive investment opportunities.
EU advantage
Ultimately, Portugal’s status as a member of the European Union enhances its appeal. Investors benefit from the economic and trade advantage that comes with EU membership. So this means you have an extra layer of security and opportunity. (Read this: How to live permanently in Portugal)
Considerations Before Investing in Portugal
A Restricted golden Visa route
Portugal offers many programs that make it easy for foreign investors to do business in the country. The most well-known of these is the Golden Visa program, which grants residency to investors who make a qualifying investment in Portugal.
Before now, a notable part that drew investors was investing in real estate as a way of getting into the Golden Visa program. However, Portugal in 2023, decided to end the real estate investment aspect owing to pressures about it driving up property prices.. That said, the Golden Visa program still stands out as one of the most successful ways to invest in Portugal. Here are the other investment avenues still attracting investors looking to the Golden visa program.
- Fund Subscription: Contribute to a qualified investment fund worth at least 500,000 EUR. A great aspect to look out for is the sustainable agriculture investment fund, Pela Terra which is already helping to regenerate over 1,000 hectares of farmlan in the Alentejo region.
- Investment or donation in the arts or reconstruction of national heritage with a donation of about 250,000 EUR
- Scientific research: this means contributing to Science of Technology research with at least 500, 000 EUR
- Creation of 10 jobs: Creating and maintaining 10 jobs for a required period
- Share capital and job creation: Incorporating of a commercial company in the national territory or reinforcement of a company’s share capital (this company must have its head office in the national territory). And in either case, you need to make an investment of 500,000 EUR combined with creating five or maintaining 10 jobs.
Beyond these investments, the Golden visa also comes with tax incentives. For instance, investors in Portugal only get taxed on their worldwide income if they reside in the country for over 183 days in any given year. However, you should look at how these tax incentives compare to the property taxes, loans, and outlook on investment.
Outlook on the Real Estate Market in Portugal
Undoubtedly the real estate prices in Portugal are increasing. There’s also opportunities to grow further. However, some experts predict a slow down in the near future since the market needs a breather. You should also bear in mind that 90% of mortgages in Portugal are based on variable interest rates. And these interests can be a struggle as they are often high compared to the average monthly salary of about 1,200 EUR.
However, there’s also a growing contingent of Europeans who wish for a Plan B away from the potential of large scale war in Europe. Portugal by history appears to be a safe haven. Specifically, regions around Azores and Madeira. However, this is a growing trend and not entirely analyzed correctly yet.
The NHR Program is Ending
The NHR program was the sweet spot for all kinds of people seeking to move to Portugal. Essentially, if you relocated to Portugal and applied for the non habitual residency status (NHR), you would be exempt from being taxed on your foreign sourced income , a reduced tax rate on employment and self-employment income and get taxed only 10% on foreign pensions.
Often these deals would last about a 10-year period from your registration. It was one reason the non-wealthy EU and People from Northern Europe were moving to Portugal. However, the Portugal NHR Program is ending. So, this hiccup might reduce migration numbers and may cause less demand in the Portuguese real estate.
Investing in Vacation Rentals in Portugal
Reports show that the median house rental value of new lease agreements increased by 11.6% in the last quarter, and the number of new lease agreements increased by 4.5% compared to the same period in the previous year. These lease agreements were also focused around Grand Lisborn, Porto, Algarve, Madeira and Setubal.
Also in February, overnight stays grew with over 1.8 million guests, and 4.3 million overnight stays in February 2024 alone. So this shows that the vacation rentals market in Portugal is alive and strong. This further poses a great avenue for investors looking to buy properties and rent out to tourists and locals.
Wrapping Up
Overall, there are a number of ways to invest in Portugal. So here’s a complete outlook on all about Portugal for investors. You can consider the numbers and make the right checks and balances to figure out if investing in Portugal is a great option for you.
Frequently Asked Questions (FAQs) About Portugal For Investors
1) Is Portugal a good country to invest in?
Portugal is a splendid country to invest in. However, making the choice depends on the type of gains you like, versus economic stability, friendly foreign policies and more.
2) What is the best investment in Portugal?
The best investment opportunities in Portugal are renewable energy, capital gains, real estate and technology relate ventures.
3) Can Brits buy property in Portugal?
There are no restrictions on the type of foreigners who want to purchase a home in Portugal. However, also pay attention to the impact of the Brexit and how the property ownership rules might apply to your unique situation.
4) Is Portugal a good tax haven?
Portugal used to over tax saving opportunities through the NHR program. However, that program is ending. Therefore, there are tons of speculations on how foreigners can save on tax. It’s better to speak to a financial advisor, tax professional or immigration lawyer to help weigh your options.
5)What is the best location for property investment in Portugal?
Portugal has tons of mouthwatering property opportunities. However, the Algarve stands out with its upward-trending tourism. You can make decent rental income from owning properties in this region. However, don’t also forget that your income will be seasonal with a significant portion coming in the summer months of June through August.
6) Is Portugal a financially stable country?
The Portuguese economy is fast becoming stable, and reaching pre-pandemic levels. Hence, its a superb destination for your investments.
7) Can I move to Portugal with just savings?
Technically, you cannot move to Portugal with just your savings. However, the D7 visa which is the cheapest visa in Portugal, allows you to move to Portugal as long as you can show that you receive a passive income from retirement, or dividends.
8) Is it difficult to get residency in Portugal?
Moving to any country can be challenging. However, the bureaucracy in Portugal can make your residency application a bit convoluted. But you can upset this process by getting an immigration lawyer to help.
9) What is the cheapest way to get residency in Portugal?
The cheapest way to gain residency or citizenship in Portugal is through the D7 visa route.
10) How much does a Golden visa cost in Portugal?
Presently, the least investment amount using the Golden visa program is 250,000 EUR. This is notwithstanding possible expenditures such as paying the appropriate financial advisors.
11) What is the Portugal State program for investors?
The Portugal Golden visa program is the Portugal State program for investors. It allows investors to acquire residency indirectly by making profound investments in variety of opportunities across the country.
