Portugal’s Economic Boost
Portugal, at the western end of Europe, is one of the wildest and least explored countries of the old continent. It has seduced thousands of expatriates with the kindness of its people, extensive coastline and its cities full of breathtaking architecture. In recent years, Portugal’s economy is starting to reach its maximum potential as it has become out of the blue a haven for foreign investment.
Portugal has maintained positive economic growth during the last 3 years, which has been the product of an increase in domestic demand The fiscal deficit was reduced by 50% last year, from 4.4% to 2.5%, which is quite remarkable because of the environment of Political and economic uncertainty that permeates in the European Union.
The ‘Portuguese economic miracle’ has become a phenomenon in the social in the media. Such social success is not due to the economic recovery , nor to its effectiveness in reducing the deficit, but because of the ideology of the Government: the left alliance formed by the Socialist Party, the Block of Esquerda and the Communist Party.
The economy has grown three years in a row and, what is better, the government presided over a return of salaries and pensions to the level they had before the crisis. If the government spent more, it would reactivate the economy, increase the collection of taxes and eventually reduce the existing fiscal deficit. All of these things are currently being worked on.
Portugal has become one of the most competitive countries in the European Union. Its unemployment rate fell below 10% at the start of last year. Structural reforms have been adopted to reduce the tax burden and strengthen contracts in companies. In addition, these measures will make it possible to liberalize the labor market and should contribute to the sustained growth it is currently experiencing.
On the other hand, industrial production has recovered by 6% since the last minimum of the second quarter, but remains 13% below the maximum before the crisis. The strong tourist activity also contributed to the improvement of production.
Tourism has in many ways helped boost Portugal’s economic recovery. Tourism has created more work in the last quarter than construction and all the rest of the industry together. The tourism sector employs more people than the entire country’s Public Administration.
Revenues generated by tourism in Portugal between January and November reached 9,600 million euros, 12.2% more than in the same period of the previous year, which is about 29 million daily.
Portugal is the 33rd country where tourism and travel count more for the creation of wealth. The WTTC estimates that in 2015 tourism and travel generated 11.3 billion euros of GDP (6.4% of wealth). The value, they point out, will grow in 2016 and may reach 14,600 million dollars, or 2.2% more.
A market source claims that, following the conflicts in northern Europe and between Ukraine and Russia, Portugal will be able to benefit from the instability of Central Europe. Also the flow of tourists who previously sought Turkey may opt for Portugal or Spain as a destination, where the climate is equally attractive.
All of this factors have impulsed foreigners to invest their money in Portugal. Considering the investment in infrastructures, this has been very effective in increasing the average productivity of the economy by reducing transport operating costs and accessibility among other things.
The sustainability of future growth, advocates stronger growth of machinery and especially with products in the field of intellectual property, software, R&D and other intangible assets. The Portuguese entrepreneurial sector wants to use its own means and not be compared to others, but everything indicates that Portugal’s role as the new economic hub in the European Union is here to stay.
For all of these reasons, Portugal’s residency and citizenship program is the most popular in Europe. Referred to as the Golden Visa, Portugal will grant residency with an investment of 500,000 Euros into real estate. Smaller investments are possible outside of the city or in older buildings.
Residency in Portugal allows you to live and and operate a business anywhere in the European Union. You’re not limited to Portugal, but rather have access to all of the Schengen Region. And, you will only pay tax to Portugal if you spend 183 days or more in country.
You can apply for citizenship and a second passport after 6 years of residency. As of 1 January 2018, Portuguese citizens had visa-free or visa on arrival access to 173 countries and territories, ranking the Portuguese passport 5th in terms of travel freedom (tied with the American, Irish and South Korean passports).
Finally, the golden visa is not limited to persons from certain countries. Anyone with a clean history and the financial resources can apply. The focus of the program is to bring in quality high net worth individuals who will become valuable members of the EU an of Portugal.
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We hope you enjoyed our article on Portugal’s Economic Boost. For more information on 2nd residency and passports, you can contact us HERE
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