Why celebs and startups are moving to Portugal

Why have celebrities such as Madonna moved to Portugal? Well, there’s been a quiet revolution happening in Portugal over the last few years, especially in its capital Lisbon. Young people, celebrities and businesses have flocked to the sunny Iberian coast, creating a surge of new and innovative businesses within the ancient city walls. But what’s driving this influx, and would a move to Portugal be worth your while?

Tourist destination

Tourism tends to draw businesses, and Portugal is definitely drawing tourists. Lisbon is the 7th most visited city in Southern Europe - visitor numbers grew by 3.9% in 2016, while revenue was up by 10.7%. Hotel guest numbers rose by 10.3%, with the UK contributing the largest proportion of foreign visitors at 22.9%, up from 20.3% the previous year.

The profile of Lisbon in particular has grown, with numerous media profiles of the city as a not-so-hidden gem. Lisbon was named the Ibero-American Capital of Culture for 2017, and was deemed “Europe’s best summer city break” by the Independent newspaper. It’s been particularly heralded for the quality of its restaurants, easy navigation, and the depth of its history and culture.

This hasn’t just attracted temporary tourists, but more long-term ones, too. Lisbon has become something of a student mecca, with two universities ranking in Times Higher Education’s annual survey of the world’s finest institutions. Portugal has nine universities on the list in total, including locations in Porto, Aveiro, Coimbra and Minho.

This presents an obvious opportunity for businesses. With endless summers, a long stretch of coastline and every kind of terrain, Portugal is a goldmine for almost any tourist focused business. While the country is becoming more popular, unemployment has also remained stubbornly high, making it a perfect market in which to employ skilled workers.

Famous faces

Having a holiday home isn’t unusual for a celebrity - we’ve seen plenty of people up sticks and take shelter in countries like France and Switzerland before. But the number of famous people finding a home in Portugal over the past few years has been notable. Madonna is now a semi-permanent resident, with her son playing in Benfica’s academy. Other converts include Ricky Martin, Michael Fassbender, Monica Bellucci, Christian Louboutin and Eric Cantona.

Part of the appeal is likely to be the weather. Portugal has one of Europe’s most consistently warm climates, with an average of over 3000 hours of sunshine a year in Lisbon, and winter temperatures of around 15 degrees Celsius. Portugal is also renowned for its beautiful landscapes, with stunning coasts, snowy mountain ranges and abundant forest. The low population density also makes it easy to find a home that’s secluded without being isolated.

One of the definitive factors however may be Portugal’s accommodating options for immigration, particularly the ‘Golden Visa’. The Golden Visa is a citizenship scheme that involves making a substantial investment in exchange for residency. Investments can be in capital, property or targeted employment, although the majority of successful applications are for property.

An investment of as little as €350,000 in an area of urban renewal, or €500,000 for property in any location, secures a visa with a guaranteed route to permanent residency. Golden Visa holders only have to reside in Portugal for 7 days in their first year, and 14 days thereafter. They also receive the not-insignificant benefit of free travel within the Schengen zone of 22 countries.

Related article: How tax breaks in Portugal are saving expats €30,000 a year

For British or American celebrities then, this confers numerous benefits. For more or less the regular price of a home, they can secure a spot in one of Europe’s fastest growing and most sought-after vacation spots. Moreover, they’ll gain some of the benefits of EU citizenship without relinquishing their own passports - but can choose to do so after six years if they so wish.

Business boon

FoWhy celebs and startups are moving to Portugal 2r businesses and entrepreneurs, particularly those based in the UK, this is a tempting prize. Recent progress in Brexit negotiations has done little to temper the concerns of UK enterprise. Despite the transition period, it seems likely that the UK’s departure from the EU will take numerous benefits with it, including free trade, free movement of labour, and things like financial passporting rights and shared standards.

By investing in Portugal, then, a business could move or expand to a lucrative, settled country with a high quality of life (and fewer rainy days than England!). Business owners could still live and work in their home country, and only take the odd trip to Portugal to oversee their enterprise. But they would potentially gain a route into the EU, making it easier to trade goods and resources, and to take advantage of EU standards.

Related article: How to Pay Cross-Border VAT in the EU

It’s also a particularly good destination for English speaking businesses. While there will be stumbling blocks in the formation process - everything has to be conducted in Portuguese - Portugal is particularly popular with Brits, especially if they choose a company formation expert to help with the transition. The large expat community and existing English-language businesses have formed a strong community ethic and will help you to settle in and get acquainted with the peculiarities of Portuguese business.

Small businesses are the backbone of the Portuguese economy, hiring the vast majority of its citizens. Depending on where you set up shop, you should benefit from low rent and a fairly low cost of living. Wages are higher than you might expect however, in spite of the unemployment figures, and you will have to pay social security contributions, as well as five weeks’ holiday.

The sunny Algarve and lovely Lisbon may be your window into life in Portugal, but the business case for moving there is growing. As the Brexit picture becomes clearer, and the Portuguese economy goes from strength to strength, it isn’t outlandish to think that this might become a first port of call for businesses looking to enter Europe - whether from the UK or further afield.

For more information about how to set up a company in Portugal, along with any other issues including registering a business address, VAT services, accountants, visas or bank accounts, please call us on 0033 (0)1 53 57 49 10 or email us from our contact page and we’ll be happy to help.

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