American’s interest in investing in Portugal has grown exponentially in recent years, reflecting a significant movement on the global investment scene.
Let’s take a look at the country’s potential and why it should be on the radar of qualified investors.
Check out the article on the best areas to invest in and how to obtain the Golden Visa Portugal and acquire Portuguese citizenship.
Have a good read.
Why invest in Portugal?
In addition to the financial advantages of direct investments by entrepreneurs in Portuguese territory, largely due to the search for stability and security, investing in Portugal also offers access to a high-quality lifestyle and legal certainty, making the country an ideal destination both for those looking to expand their business and for those planning a change of life. Let’s explore these details further now.
Advantages of investing in Portugal
Portugal offers a number of attractive advantages for those wishing to invest, from its strategic location to its easy access to various global markets.
The country has a stable business environment, with an economy that in recent years has stood out for its capacity for innovation and consistent growth in key sectors.
According to Pordata, Portugal had a real GDP growth rate of 2.3% in 2023 compared to the previous year, with good prospects for 2024, ranking sixth out of the 27 countries in the European Union.
Another important point to assess is the scale of investment in the country, whether by companies, individuals or public institutions. Once again, Portugal is in sixth place among EU countries, with investments of more than 50 billion euros in 2023.
Let’s take a look at the main aspects that highlight the potential of investing in Portugal:
Privileged location
Portugal benefits from a geographical location that positions it as an access point to several important markets.
The country is in the same time zone as the United Kingdom and Ireland, with a difference of just one hour in relation to the European central time zone, and three hours from Moscow. It is also the closest European country to the United States and Canada, which makes it easy to connect to transatlantic markets.
This geographical proximity makes Portugal a natural hub for international businesses wishing to access both European and American and African markets.
Portugal’s strategic location
Availability of labor
For those wishing to invest in Portugal, the country offers a highly qualified, flexible and cost-effective workforce compared to other European markets.
With more than 385,000 students in higher education and around 5,891 graduates in Information Technology, Portugal ranks 2nd in Europe in terms of engineering graduates, according to Eurostat (2018).
In addition, the country is 13th in terms of availability of skilled labor, according to the IMD World Talent Report(2019), making it one of the preferred destinations for companies that need professionals who are competent in multiple languages and have a high level of training.
Portuguese market scenario
The country is a strategic gateway to a European market of 500 million people, as well as providing access to more than 250 million Portuguese-speaking consumers, as members of the Community of Portuguese Speaking Countries (CPLP).
The country also stands out for its political and economic stability, having been a member of the European Union since 1986 and of the Eurozone, as well as being part of organizations such as the United Nations and the OECD.
This combination of factors creates a favorable environment for investments in various sectors, especially for those seeking international expansion in stable markets with great potential.
Innovation and technology
As one of Europe’s main technology hubs, Portugal has been attracting new businesses and innovative startups.
The country ranks 2nd globally in openness to Foreign Direct Investment (FDI), according to the OECD FDI Restrictiveness Indicator.
In addition, Portugal has invested significantly in digitizing its public services and integrating digital technologies, ranking among the top 10 in Europe in this regard, according to the Digital Economy and Society Index. Events such as the Web Summit, which will remain in Lisbon until 2028, reinforce the country’s importance on the global innovation and technology scene.
Attracting new businesses
The country ranks as the 25th best place to do business, according to Forbes, and 34th in global competitiveness, according to the World Economic Forum.
The ease of doing business and the openness to foreign investment have consolidated Portugal as a safe and advantageous place for new businesses, especially in areas such as technology, tourism, renewable energies and real estate.
Quality of life
Portugal offers an unparalleled quality of life for those who wish not only to invest, but also to live in the country.
Always among the top 10 countries in the world for quality of life, according to the InterNations, Expat Insider ranking, the country offers a safe environment, high quality health care and a pleasant climate all year round.
With over 850 km of beaches and 3,300 hours of sunshine a year, Portugal is ideal for those looking for a work-life balance, with countless leisure options such as golf, surfing, hiking, cycling and other outdoor activities. In addition, the country ranks among the safest countries in the world according to the Global Safety Index, guaranteeing peace of mind for those who decide to move to Portugal.
Portuguese government incentives for investment
With specific programs that speed up the opening of companies, such as “Empresa na Hora,” and a series of tax incentives that vary according to location and sector of the economy, the Portuguese government creates a favorable environment for investment.
Among the main advantages are exemption from certain taxes in the first year of operation, as well as contractual benefits for productive investments.
There are also deductions for retained and reinvested profits, tax incentives for research and business development, and specific advantages for setting up companies in the interior of the country, where the demand for economic development is greatest.
The Tax Regime for Non-Habitual Residents offers lighter taxation for those who choose to live in Portugal, making the country even more competitive.
These measures, coupled with the reduction in taxation on capital gains, make the business environment in Portugal attractive to both small businesses and large corporations, ensuring that foreign investment continues to grow and diversify the local economy.
In which area to invest in Portugal?
Portugal offers a wide range of investment opportunities in dynamic and constantly growing sectors. Below, we explore some of the most promising areas for investors looking to take advantage of the country’s stable and innovative economic environment.
Investing in technology
The technology sector in Portugal is attracting more and more entrepreneurs, mainly due to the existence of the National Network of Incubators and Accelerators (RNI), which connects more than 150 accelerators and incubators in the country.
This network promotes exchange and cooperation between different institutions, offering strategic resources and support to entrepreneurs who choose Portugal to develop their startups.
In addition, the Vale Incubação program provides financial support of up to €7,500 for young companies, less than a year old, seeking incubation services such as legal advice, product development, marketing and support for participation in funding competitions. With this support, the technology scene in Portugal is booming, offering great opportunities for those working in this sector.
Investing in startups
In order to encourage the creation of new companies, the Portuguese government has implemented Startup Visa, a program that attracts investors who want to open innovative businesses in the country.
Since its creation in 2018, Startup Visa has facilitated the entry of entrepreneurs from all over the world, who can apply for the visa even without having an open company. The program is managed by the Agency for Competitiveness and Innovation (IAPMEI) and is certified by the incubators that receive these projects, increasing the chances of success for startups in the Portuguese market.
Investing in tourism
Portugal is one of the most popular tourist destinations in Europe, and the sector is in full recovery after the impact of the pandemic.
There are several ways of investing in this sector, but the one that has most attracted Americans visionaries are investment funds in hotels and hospitality as a whole.
The assets are aimed at a public with greater purchasing power, willing to pay for unique experiences in remote and peaceful locations.
On the other hand, investors benefit from the growing demand for visitors to Portugal.
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Visa for those wishing to invest in Portugal
The Golden Visa was created in the early 2010s to attract new investors to the country in exchange for residency and subsequent Portuguese citizenship.
There are also 5 types of investment available, with venture capital funds being the most attractive and the most sought after. The option of buying property to apply for the golden visa is no longer valid.
One of the requirements is that the applicant must not be a citizen of the European Union, which is why the most frequent applications are from Chinese, Brazilians, Turks and Americans.
Check out this article, by clicking here, for more details on how to obtain the Golden Visa Portugal.
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Portuguese citizenship through investment
Investing in Portugal can also guarantee dual citizenship, but this is not a straightforward process.
The applicant must first obtain the Golden Visa, or ARI Program, and after 5 years of active investment and residence permit, they are entitled to apply for Portuguese citizenship, as well as for the whole family.
