Why Portugal is the Smart Choice for Investors and Entrepreneurs

For decades, Portugal bore the weight of a narrative defined by economic fragility and the emigration of its brightest minds in search of better opportunities abroad. But today, that story is changing—decisively.

Portugal is emerging not just as a beautiful place for relocation but also as a smart, strategic destination for affluent families, skilled professionals, entrepreneurs, and international investors alike.

Recent economic data from Oxford Economics shows that Portugal is outpacing much of the eurozone, the UK, and the US in both resilience and momentum.

Portugal is predicted to see GDP growth of 2.4% in 2025, while the US (1.3%), the Eurozone (1.0%), and the UK (1.0%) are all set to decline over the same period.

While many European economies grapple with stagnation, Portugal ended 2024 on a strong footing, benefitting from a services-driven recovery, booming tourism, and a remarkable uptick in net migration.

These aren’t just cyclical blips. They represent the structural rebalancing of an economy that has learned from its past and is building toward a sustainable, prosperous future.

One of Portugal’s most notable achievements is the reduction of its macro-financial vulnerabilities. Where once there were persistent current account deficits, today there are surpluses.

Private debt levels have fallen steadily, and the country now boasts one of the strongest fiscal performances in the eurozone. In fact, Portugal is on track to deliver a third consecutive budget surplus in 2025—an impressive feat that positions it more closely with core European economies than with its southern peers.

Portugal’s public debt is also falling fast. By the end of 2025, it is expected to dip below 90% of GDP, marking the first time in two decades that it will sit beneath the eurozone average.

This stands in stark contrast to other nations still grappling with unsustainable debt levels. The improvement has not gone unnoticed by the markets: Portugal’s bond yield spread over Germany’s is now below 50 basis points, reflecting investor confidence.

Paul Sheedy, special advisor at the Portugal Future Fund, an alternative investment fund approved for Golden Visa in Portugal, 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%).”

What’s more, Portugal is benefiting from a demographic shift that few would have predicted ten years ago. Positive net migration is surging—not just in raw numbers, but in quality.

From digital nomads to highly skilled professionals, Portugal is attracting a wave of international talent, drawn by the country's forward-looking visa policies, tax incentives, high quality of life, and vibrant tech and services sectors.

Portugal’s Golden Visa residency by investment programme continues to attract non-EU investors.

By committing a minimum of €500,000 to Golden Visa-approved alternative investment funds, investors—and their eligible family members—can apply for residency. They can also potentially obtain Portuguese and EU dual citizenship after five years, provided they meet legal requirements.

Golden Visa holders gain the right to live, work, and study in Portugal while enjoying visa-free travel across 29 Schengen countries. Maintaining residency requires a minimum stay of seven days per year in Portugal.

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

“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.”

One of the biggest drivers of this influx of highly skilled professionals comes with the new Tax Incentive for Scientific Research and Innovation (IFICI), more commonly known as the NHR 2.0 tax regime.

Portugal's IFICI (NHR 2.0) tax regime offers compelling fiscal incentives, including a 0% tax on foreign-derived dividends and capital gains, reinforcing the country's status as a prime destination for international private wealth.

According to the 2025 Wealthy Expats in Portugal Survey Report, an overwhelming 83% of wealthy expats cited Portugal’s tax and investment benefits as one of the primary reasons for their relocation.

Andreas Pretorius, a wealth manager who moved from the UK to Portugal and set up business there, said:

“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 transition from the old NHR tax regime, which closed to new entrants at the end of 2024, to the IFICI (NHR 2.0) tax regime is expected to continue driving investment and attracting talent, maintaining the country’s appeal to high-net-worth individuals, especially value creators and skilled professionals.

Portugal’s IFICI (NHR 2.0) tax regime targets professionals including those in scientific research, finance, technology, education, engineering, healthcare, and consultancy, amongst others.

The scope of the IFICI (NHR 2.0) tax regime has been widened in the last six weeks, and many more industry sectors and professions have made it highly attractive to entrepreneurs, value creators, and skilled professionals.

Investors will also take heart in Portugal’s role in the EU’s Recovery and Resilience Facility (RRF). With a robust pipeline of approved projects—representing nearly 5% of 2024 GDP—Portugal is poised for a significant injection of investment that will further modernise infrastructure, boost digital innovation, and enhance long-term competitiveness, according to the Oxford Economics Report.

This comes atop solid real income growth, with Portuguese households seeing a 7% rise in disposable income in 2024 alone, bolstered by strong employment and wage gains.

Portugal’s economic rating was upgraded by JCR from ‘A’ to ‘A+’ in 2025, recognising its diversified economy, structural reforms, and fiscal discipline while reinforcing its ability to withstand external economic pressures.

The latest figures show Portugal’s inflation is at 1.9%, demonstrating a consistent downward trend and bolstering confidence in the country’s economic policies, whilst the UK, Eurozone and the US are running at inflation levels of 2.6%, 2.2%, and 2.4%, respectively.

According to Finance Minister Joaquim Miranda Sarmiento, Portugal’s government projects GDP growth of 1.8% in 2024 and 2.1% in 2025.

Of course, challenges remain. Like many of its neighbours, Portugal still contends with a labour market that includes a high share of low-value-added jobs, and productivity growth, like most of the Western world, continues to lag.

Paul Sheedy adds:

“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 continues to be a smart choice for affluent expats seeking a place that offers not only a high standard of living but also real economic potential for investors looking for a destination that combines fiscal discipline with structural momentum.

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About Portugal Pathways

Portugal Pathways has supported hundreds of Golden Visa residency-by-investment applications and provides expert guidance through its professional supply chain network on luxury property, wealth management, and tax optimisation, including post-NHR tax regime planning, as well as private healthcare, IFICI tax incentive applications, money transfers and bespoke relocation solutions to enhance life and investments in Portugal.

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.

About Portugal Investment Owners Club

The Portugal Investment Owners Club, or P Club for short, is a unique investor membership community designed for discerning individuals, families, and organisations committed to exploring and capitalising on life in Portugal and enjoying money-can't-buy experiences and exclusive events.

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Disclaimer: The information on the Portugal Pathways and Portugal Investment Owners Club (P Club for short) websites 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. Golden Visa investments need to be held for 6 to 7 years to allow for permanent citizenship/passport in the EU.