Recent positive results have shown that the country (Portugal) has done the right thing. Government support directed towards high-tech companies and start-ups, tax incentives such as the NHR program (Non-Habitual Resident) and, especially, the Gold Visa scheme, have been determinants for the growth of the country.
It has been a little more than seven years since the country freed itself from the dreaded Troika. Since then, it had to re-learn to walk on its own two feet with an ocean of challenges to face: paying international creditors, keeping public accounts balanced, attracting foreign investment, finding its way back to economic growth.
Today, despite the difficulties brought by the Covid-19 pandemic, Portugal has managed to diversify its economy, sharply reduced dependence on tourism, and laid the foundations for long-term stability and growth. As a foreign investor in the country, I have no doubt that Portugal still has great investment potential. In 2015, when we started our bet on the Portuguese real estate market, we were mainly attracted by the low prices. This is no longer the case. Prices are still lower than the European average, in relative terms, but this argument alone has started to lose legitimacy, because the country managed to develop several distinct drivers. Among these, besides being chosen by many as their retirement destination, Portugal is now capable of attracting sturdy Foreign Direct Investment (FDI), Lisbon, the capital, is truly becoming an international city with a growing number of expat residents each year, many foreign companies are moving their offices to the national territory, and there is a palpable effervescence of new ideas and businesses that make the country the ideal destination for young entrepreneurs. With the right incentives in place, it even has the potential to become Europe’s main tech and start-up destination.
There is more. The Global Peace Index and many other surveys confirm that Portugal is a great place to live, to work and to enjoy retirement. For a population of about 10 million, the country now has very different attractive drivers compared to its peers. Looking at the group of so-called PIGS (Portugal, Italy, Greece and Spain), all of which were severely affected by the 2008 financial crisis, Portugal stands out as the only one that has managed well its path back to sustainable growth. Thanks to its incredible economic performance over the past five years, Portugal has paid off the IMF earlier than expected, and its GDP growth and unemployment rate are amongst the best in the region today. As such, I believe Portugal has definitely left its role as Europe’s “weakest link” to become probably one of the best economies in the next decade.
Contributing factors to its economic success and reclaimed independence from European aid have greatly been instigated by public support directed to high-tech companies and start-ups, tax incentives such as the NHR (Non-Habitual Resident) program, and especially the Golden Visa scheme, which gave a strong push for the first years of growth. This regime forces the investor to spend some time in the country over a 5–6-year period, giving them the motivation to become representatives and advocates of Portugal in their own countries, which in the end, helps Portugal to develop business relationships with many different markets.
Even though these incentives and schemes are no longer the main drivers of the economy – as is tourism, which is slowly becoming secondary – Portugal has shown that it did the right thing this past decade. In that sense, Europe should follow suit, supporting neighboring countries to create such programs that would in term, attract well-educated, economically capable, and influential opinion leaders to host countries. That’s what Europe needs.