How Portugal Became the No.1 Choice for Investors and Expats

Once known for economic hardship and an outflow of talent, Portugal has undergone a striking transformation.

Today, it stands as one of Europe’s most compelling destinations—not only for those seeking a better lifestyle, but also for investors, entrepreneurs, and high-net-worth individuals seeking stability, opportunity, and growth.

Surpassing International Peers

Portugal's economic momentum has distinguished it from a global landscape marked by modest growth. According to Oxford Economics, Portugal now leads much of the eurozone, the UK, and the US in both economic resilience and growth prospects.

While GDP growth for 2025 in the Eurozone, UK, and US is forecast at just 1.0%, 1.0%, and 1.3% respectively, Portugal is expected to grow by 2.4%. This follows a strong performance in 2024, driven by a services-led recovery, a thriving tourism sector, and increasing net migration.

Crucially, this is no short-term boost. Portugal's progress is the result of deeper structural reforms, prudent fiscal policies, and a diversified economy geared for long-term competitiveness.

Sound Finances and Market Confidence

Among Portugal’s most notable achievements is the strengthening of its fiscal position. The country has transitioned from persistent current account deficits to achieving surpluses, while reducing private debt levels.

In 2025, Portugal is projected to post its third consecutive budget surplus, aligning itself with the eurozone’s strongest economies and distancing itself from the fiscal instability often associated with southern Europe.

Public debt is expected to drop below 90% of GDP by the end of 2025—its lowest point in 20 years and beneath the eurozone average. Confidence in Portuguese assets reflects this stability, with the bond yield spread over German benchmarks now under 50 basis points.

Paul Sheedy, special advisor at the Portugal Future Fund, said:

“Portugal stands out across Europe for its economic resilience and investor confidence, which is at an all-time high compared with some major countries such as the UK, the US, and the wider Eurozone.

“An investor attractiveness report by Ernst & Young found that 77% of global executives anticipate an improvement in Portugal’s investment attractiveness over the next three years, surpassing expectations for the wider Eurozone (67%) and the UK (59%).”

Changing Demographics and Talent Inflow

A key indicator of Portugal’s transformation is the reversal of its long-standing brain drain. Today, the country is attracting international talent—from digital nomads and entrepreneurs to skilled professionals—enticed by a high quality of life, progressive visa regimes, and a growing technology and services sector.

The Portugal Golden Visa programme remains a cornerstone of this trend. By investing at least €500,000 in an approved alternative investment fund, non-EU investors can obtain Portuguese residency, with the potential for EU citizenship after five years, subject to eligibility.

Golden Visa holders and their families gain the right to live, work, and study in Portugal, along with visa-free travel throughout the 29 Schengen countries. The programme requires a minimum stay of just seven days per year.

Paul Stannard, chairman and founder of Portugal Pathways and the Portugal Investment Owners Club (P Club), commented:

“Portugal has created a unique environment for likeminded people to be able to create sustainable investments in key sectors of the country’s economic strength, allowing value creators as well as highly qualified talent to prosper through a combination of tax incentives, quality of life, and investment.

“Key sectors, in particular, that are driving Portugal’s growing economy include media and international events, healthcare, technology, renewable energy, and tourism and hospitality.

“We produce a Golden Visa investment fund index for Portugal of over 30 regulated alternative investment funds that have already secured €7 billion in investment since the Golden Visa residency by investment programme launched in 2012.

“There are a number of funds that are focused on these key sectors that are driving Portugal’s future, and there is now a lot of diversification for investors.”

Portugal's New Tax Incentives to Attract International Talent

Further enhancing Portugal’s appeal is the introduction of the Tax Incentive for Scientific Research and Innovation (IFICI) tax regime—referred to as NHR 2.0. Launched at the end of 2024 to replace the former NHR programme, IFICI provides generous incentives, including a 0% tax rate on foreign-sourced dividends and capital gains.

According to the 2025 Wealthy Expats in Portugal Survey Report, 83% of affluent expatriates identified tax and investment benefits as a primary reason for their relocation.

Andreas Pretorius, a previously UK-based wealth manager who moved to Portugal and established a business there, shared:

“We came initially to Portugal for the lifestyle, the weather, and the cost of living, having sold my business in the UK.

“However, it became very clear that Portugal was a land of opportunity for entrepreneurs and investors, and it was the best decision we made.

“We see new professionals and entrepreneurs coming to Portugal every day and taking advantage of the tax incentives on offer as well as the investment opportunities and using this to realign their life and business activities to Portugal. This also gives them the added benefit of accessing the whole of the European market.”

The IFICI scheme covers a wide range of high-value professions, from science and finance to technology, healthcare, education, and consultancy. With its scope recently expanded, the regime is proving even more attractive to globally mobile professionals.

Investing in Long-Term Growth

Portugal’s participation in the EU’s Recovery and Resilience Facility (RRF) is also fuelling future development. Projects approved under the RRF—equivalent to nearly 5% of GDP in 2024—are driving infrastructure upgrades, accelerating digital transformation, and enhancing overall economic competitiveness.

These investments build on solid fundamentals. In 2024, Portuguese households experienced a 7% rise in real disposable income, supported by robust employment figures and rising wages.

In 2025, the Japan Credit Rating Agency (JCR) upgraded Portugal’s credit rating from ‘A’ to ‘A+’, recognising the country’s diversified economy, fiscal responsibility, and ability to absorb external shocks.

Inflation remains relatively subdued at 1.9%, well below the UK (2.6%), the Eurozone average (2.2%), and the US (2.4%). The government forecasts GDP growth of 1.8% in 2024 and 2.1% in 2025, according to Finance Minister Joaquim Miranda Sarmiento.

Portugal's Promising Trajectory

While challenges remain—particularly in the areas of low productivity and a reliance on lower-value-added roles—Portugal is undeniably on an upward path.

As Paul Sheedy notes:

“Discerning investors are well-positioned to support Portugal’s economic growth and strategic innovation through targeted investments in key sectors.

“The broader outlook is clear. Portugal is in a good place and is now becoming a key player in demonstrating how to attract talent and investment and a rising European hub for growth, stability, and opportunity.”

Portugal has moved beyond its image as a sunny retirement haven. Today, it stands as a robust and forward-looking economy, attracting global talent and capital with strategic reforms, sound fiscal governance, and smart investment incentives.

For those seeking a European base for business, wealth preservation, or lifestyle, Portugal is increasingly the obvious choice.

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Discover how the Portugal Future Fund can help support you in making impactful investments through Portugal's Golden Visa residency by investment programme here

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About Portugal Future Fund

The Portugal Future Fund strategically invests in key sectors, driving growth and innovation across Portugal. Approved for Portugal’s Golden Visa residency-by-investment, it offers a unique opportunity for impactful and rewarding participation.

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Disclaimer: The information on the Portugal Future Fund website and in email communications is for general informational purposes only and should not be construed as legal, tax, or financial advice. You should consult and check with a qualified professional advisor before relying on any information provided on this website or in email communications. As it relates to investments in Golden Visas or other wealth management solutions offered by regulated and professional advisors, it is important to note that past performance is no guarantee of future returns. Private equities can be highly illiquid and come with risk and should always be under professional independent advice. Portugal Future Fund operates under CMVM regulations but is not directly endorsed by the CMVM or any governmental entity.