Tourism, the backbone of Portugal's thriving economy
Investor's skepticism about Europe does not affect Portugal
Today's Portugal is known as the economic Wunderkind of Europe. With declining economies in the traditional strong European countries such as France, Germany or the United Kingdom, Portugal not only amazes with its economic growth, but also with political stability and the absence of populist hate speeches and civil unrest.
While investors become more and more skeptical about the potential of most European economies, Portugal has very well understood that foreign investment and new international partnerships are the essence of economic growth.
The tourism industry without a doubt has boosted Portugal's economic revival
Foreign investment has mainly boosted the Portuguese Real Estate market, but the momentum of the tourism industry made both the Portuguese economy and the property market thrive.
Since 2013, Portugal's GDP growth consistently around 1,5% per year and the unemployment rate has fallen from a catastrophic 16% in 2013 to less than 7% today. Portugal's tourism industry accounts for almost 15% of the national GDP. 1 out of 10 jobs in Portugal are directly related to the tourism industry. It can not be denied how important Portugal's tourism industry is to sustain its national (and regional) economic growth.
The tourism industry maintained Portugal's cash flow during the crisis
The speedy and successful recovery of Portugal from the worldwide financial crisis is also due to the fact that the crisis did not hit Portugal any harder. And the reason for this may again be the tourism industry. Even throughout the crisis, the Portuguese tourism industry kept growing steadily. Actually, tourism receipts in Portugal have tripled from around 5 Billion Euro's in 2005 to 10 Billion Euro's in 2013 and may reach 17 Billion Euro's this year.
Portugal has a very attractive investment climate
Portugal's dedication to attract more foreign investment is translated by the Portuguese Golden Visa. The Portuguese Golden Visa is a residence permit for investors and is granted in return for an investment of 1.000.000 Euro's into the country, or the creation of 10 jobs, or the acquisition of property worth 500.000 € or more. As Portugal is part of the Schengen Area, the holder of a Portuguese residence permit has unlimited access to all Schengen countries.
The non-habitual residence scheme has been another big driver of foreign investment. It allows non-habitual residents to benefit from tax-exemption in Portugal in respect of pension income obtained through another country. Due to Portugal's double-taxation-avoidance treaties with several countries, this scheme allows a tax-free retirement under the Portuguese sun for many northern European retirees.
There are many other incentives to attract foreign investment such as tax exemptions for companies locating themselves in the interior of the country or investments in tourism.
But it's also Portugal's stable government, its open-minded and very welcoming population, a simple, but very healthy and tasteful cuisine, a large scale of cultural and recreational activities and maybe also a bit Portugal's still active football legend Cristiano Ronaldo that have helped boost Portugal's worldwide popularity. And with a country's improved popularity, there are usually two results: more tourism and more foreign investment.