The Portuguese production values in 2014 were the same as in 2001. The country’s economy experienced small signs of improvement in 2006, just before the economic crash of 2007 nullified these hopeful prospects. It was suddenly clear that Portugal could not go by without opening itself to foreign investment, and with that in mind, the Fiscal Regime for the Non-Habitual Resident was put into practice in September 2009.
The Fiscal Regime for the Non-Habitual Resident is a tax regime that eliminates the international legal double taxation while fixating a special income tax of 20% throughout 10 years for highly qualified and recent Portuguese residents. This regime is only applicable for individuals with one year or less of residency. This was the first step to recover an economy that desperately needed some capital. The effects weren’t immediate but few will contest its importance in the recent uprising of the Portuguese economy.
Another major contribution to fight the Portuguese long financial stagnation came in the worst registered year for Portuguese real estate, 2012, when selling a house would take an average of 16 months. So on October 8th of that year, the Golden Visa Program was implemented. The timing for a program that provides Portuguese citizenship (and therefore EU citizenship) to its investors couldn’t be better. With property prices in an all-time low in 2013 and lots of buildings in a desperate need of renovation, even in the capital’s center, the Golden Visa Program enticed foreign investors to not only inject capital into the country but also renew its urban landscape. Lisbon was the main beneficiary of these new investments, improving the quality of infrastructures in areas like Cais do Sodré, Avenidas Novas and historic neighborhoods like Alfama, Mouraria, and Av. da Liberdade. Tourism and commerce also benefited from a huge boost, real estate investment records were broken and Lisbon is now currently featured in “best vacation destination” and “best city to live” lists from renowned sources.
In spite of the growth on the Index of Housing Prices, Portugal still seems to be an exciting country to invest in, especially in the real estate market with its capital of Lisbon being the most prime location. Its financial, geographical and socio-cultural conditions make it very appealing for foreign investors to capitalize on this recently developing economy, the sooner the better, as it always is in these cases.