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Portugal: Strong Investment Base despite Unstable Atmosphere in Europe

Portugal: Strong Investment Base despite the Unstable Atmosphere in Europe

Recent continent-wide or even planet-wide financial and political setbacks have put considerable amount of restraints on countries’ internal and external business affairs. The atmosphere of instability in the Eurozone initiated by Brexit has slowed down the economic growth of the European Union countries and the Eurozone in general. Moreover, global tension over trade routes and tariffs has provided international investors and business people with a hostile operation environment where investors think twice before they embark on new entrepreneurial endeavours or even what they previously considered as safe initiatives. 

However, Portugal, in this unstable and stagnated investment scene, stands firm and steady. According to the EY Attractiveness Survey of Portugal published in June 2019, investment trust in 2019 was rated as 37 per cent as opposed to 50 per cent in the previous year. Same sort of decrease is also observable in the short term investment plans of business people within the confines of Europe. According to these statistics, short term investment plans of investors were rated as 35 per cent in 2018, and 27 per cent in 2019.

 

Portugal Remains the Most Attractive Option

Although Europe remains the most attractive spot for investments in the world, it is evident that the investor trust has decreased reflectively with the rest of the world. Similarly, these effects have been observed in transactions regarding Portugal, too. Yet, Portugal, even if it took some damage because of the larger narrative of global financial instability, manages to stay at the top of Europe in terms of business activity and foreign investment trust. Thus, country’s attractiveness is still the highest among other European countries, and short term investment plans towards Portugal constitute a considerably large portion of overall investment plans towards Europe.

 

Why and How Portugal Stands Firm

There are many reasons as to why investors and business people still choose to pursue their career activities and transactions in Portugal. Portugal’s financial and social stability, labour force and quality, security and developed infrastructure are some of the contributing factors.

According to the Global Peace Index, Portugal is the fourth most peaceful country in the world. Country’s security and social stability are quite attractive qualities for foreign investors and potential residents. Also, according to the 2018 edition of Expat Insider, among 68 countries, Portugal stands as 6th in terms of security. Also in the same report, the country ranks second for quality of life and fifth for convenience of relocation.

Furthermore, 73 per cent of the participants of EY Attractiveness Survey of Portugal published in June 2019 have rated Portugal’s telecommunication attractive. Infrastructure of transportation and logistics is also regarded by participants as 70 per cent attractive. According to the survey, almost half of the investors participated in the study have chosen the local labour skill factor as the most important in their decision making process. This area also is one of Portugal’s strengths. The survey suggests that a third of the participants rated Portugal’s local labour skill as attractive. The country’s efforts to lure foreign investors and talents into the country have started to reap their harvest. Portugal’s tax incentives like offering a flat income tax rate of 20 per cent for 10 years for non-habitual tax residents and the foreign investors attract interest in an increasing fashion. Another contributing factor to the investor interest and trust is the country’s very successful Portugal Golden Visa program which offers non-EU citizens residence in exchange for a substantial investment in the country which later may lead to permanent residence and even citizenship.

 

Stable Economy is a Crucial Driving Force

Portugal’s attractive business environment does not only lure attention of foreigners, but lately, the country’s domestic demand is also on the rise. Although the country formerly depended to a large extent on international business activity, recently, domestic demand has started to catch up with the foreign demand. Thanks to the country’s stable economy; higher wages, minimal inflation and competitive labour market allow people to more easily and confidently enter into the business scene. Whereas Eurozone economy is expected to lose some of its growth speed, it is forecasted that Portugal’s growth will continue at a moderate rate, but strongly.

 

Real Estate Sector of Portugal is Steady as Ever

One of the most popular options of residence by investment programs, real estate investment option is especially prevalent and attractive in Portugal. Portugal’s successful real estate and construction sector gets fed by tourism inflows which is another successful driving sector that contributes greatly to the country economy. Portuguese Government’s business friendly strategies and tax incentives make Portugal a great option for foreign investors. With its Mediterranean climate and amazing geography, Portugal drives its real estate sector through tourism while also attracting investors all around the world by its stable economy and desirable business environment.

In spite of the challenging and uncertain recent environment of Europe, Portugal real estate continues to perform strongly. According to Emerging Trends in Real Estate Europe study of 2020 by PwC and Urban Land Institute, Lisbon is forecasted to be, again, among the top 10 targets for real estate investments in the next year.

 

The Most Popular Option of Portugal Golden Visa Program: Real Estate Acquisition

Portugal Golden Visa Program has been initiated by the Portuguese Government in October 2012 to help with the country’s financial growth. Since then, the program successfully generated almost 5 billion euros and continues to be one of the major contributing factors to country’s strong and stable economy. According to Portugal Foreigners and Border Service (SEF) real estate acquisition option of the program has been responsible for 90 per cent of the total investment made in the country through Portugal Golden Visa Program.

 

About Paladin

Paladin as a company offers potential investors experienced and qualified consultancy service. Paladin makes the process easier by acting as an advisory to help applicants grasp every detail about the transactions and decisions. Providing its customers with quality assistance, Paladin helps business people and investors to go through bureaucratic and legal processes successfully. By doing research, providing paperwork and assessing risks for its customers, Paladin offers its services as a helpful guide for investment programs.

Are you interested in making the move to Portugal? Please contact us HERE

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