Why You Should Consider Investing in Portugal in 2025

Interest in investing in Portugal has surged globally, with the US, UK, Canada, South Africa, Brazil and Europe at the forefront of this trend. Portugal's blend of economic stability, innovation, and lifestyle benefits has placed it firmly on the radar of qualified investors.

Here’s why Portugal continues to be a prime investment and relocation destination, with insights into key sectors, such as healthcare, renewables, media and international events, luxury tourism and hospitality, Portuguese government incentives and the Golden Visa residency-by-investment programme.

Why Invest in Portugal?

Portugal offers more than just financial returns; it provides a lifestyle upgrade, legal certainty, and access to global markets. Whether you’re an entrepreneur seeking business opportunities or planning a lifestyle change, Portugal stands out as an exceptional investment choice.

Portugal’s newly introduced Tax Incentive for Scientific Research and Innovation (IFICI), also known as NHR 2.0, is set to reshape the country’s tax landscape in 2025. The IFICI tax regime significantly benefits highly skilled professionals, entrepreneurs, researchers and innovation-driven businesses.

With the application of a 20% flat tax rate over income derived from the listed activities within the regime and a 0% tax applicable to non-Portuguese income, including capital gains and dividends (excluding pensions and certain blacklisted jurisdictions), the regime aims to attract global talent while boosting Portugal’s economic competitiveness.

Investor confidence in Portugal is at an all-time high, with 84% of entrepreneurs surveyed by Ernst & Young (EY) planning to expand or establish operations in the country, compared to 72% for the Eurozone and 69% for the UK.

The Ernst & Young report also revealed that 77% of global executives expect Portugal’s investment attractiveness to improve over the next three years, surpassing expectations for the broader Eurozone, which are just 67% and 59% for the UK.

Key Advantages of Investing in Portugal

1. Strategic Location

Positioned at the crossroads of Europe, the Americas, and Africa, Portugal is a natural hub for international businesses. Its proximity to transatlantic markets and alignment with major time zones, including the UK, make it a gateway for international trade.

2. Skilled and Cost-Effective Workforce

Portugal boasts a highly educated and multilingual workforce. With over 385,000 students in higher education and a strong pipeline of engineering and IT graduates, the country is an ideal base for companies in technology, healthcare, renewables, media, international events, luxury tourism and hospitality, finance, digital assets and other knowledge-based sectors.

3. Political and Economic Stability

As a member of the EU and the Eurozone, Portugal offers investors the confidence of a stable, transparent, and predictable business environment. Thanks to its open economy and supportive regulatory framework, it ranks among the top European destinations for foreign direct investment.

According to the European Commission, Portugal’s GDP growth is forecast to rise from 2.0% in 2024 to 2.3% in 2025, significantly higher than the Eurozone’s projected growth of 0.8% and 1.3% over the same period.

Comparatively, the UK’s growth predictions stand at 1.0% for 2024 and 1.2% for 2025, underscoring Portugal’s stronger economic trajectory.

Portugal’s inflation rate is also set to improve, decreasing from 2.3% in 2024 to 1.9% in 2025, compared to the Eurozone’s 2.5% dropping to 2.2% and the UK’s 2.6% falling to 2.2%.

This lower inflation environment reflects Portugal's adept handling of economic challenges, enhancing its appeal to investors and expats alike.

4. A Hub for Innovation, Media and Technology

Portugal has become a leading technology hub, attracting start-ups and multinational companies. Government-backed programmes, such as the Startup Visa and the Vale Incubao initiative, provide financial and strategic support to new ventures.

Major events like the Web Summit, Portugal Investment Owners Club investment forums, and the IFA Global Conference 2025, which this year will bring over two thousand of the world's leading tax and investment advisors to Portugal, play a crucial role in promoting Portugal globally and attracting international talent, entrepreneurs, and investment.

5. Quality of Life

Portugal consistently ranks among the top countries in the world in terms of quality of life. With 3,300 hours of sunshine per year, a safe environment, and world-class healthcare, Portugal offers an exceptional lifestyle. Whether golf, surfing, or exploring its rich cultural heritage, Portugal provides a work-life balance unmatched by most other nations.

Portugal also has vibrant multicultural communities, especially in areas such as Lisbon, Cascais, Porto, Braga, and the Golden Triangle area of the Algarve.

Government Incentives for Investors

The Portuguese government actively promotes foreign investment through a variety of measures, including tax benefits, including reduced taxation on capital gains, incentives for research and development, and special programmes for interior regions.

The Tax Incentive for Scientific Research and Innovation (IFICI) or NHR 2.0 tax regime, a favourable tax regime, includes a 20% flat tax on professional income derived in Portugal and 0% tax on foreign income, such as capital gains and dividends. This new tax regime is very friendly to entrepreneurs, highly skilled professionals, researchers, innovators, and start-up companies.

Initiatives like ‘Empresa na Hora’ streamline the process of starting a business in Portugal, making it one of Europe’s easiest places to set up operations.

Contact Portugal Pathways for support in navigating Portugal’s tax, investment, and business landscape, including Golden Visa residency-by-investment.

Key Sectors for Investment in Portugal

Technology and Start-ups

Portugal’s National Network of Incubators and Accelerators (RNI) supports over 150 innovation hubs, offering resources for start-ups. The government’s Start-up Visa and funding programmes have transformed the country into a hotspot for tech entrepreneurs.

Portugal has rapidly emerged as one of Europe’s most dynamic start-up ecosystems. In 2024, Braga was named the European Commission’s European Rising Innovative City award winner, just a year after Lisbon was named the European Capital of Innovation.

Tourism and Hospitality

Portugal’s tourism industry is thriving, with high-end hospitality investments seeing significant demand. Investors can capitalise on growing tourism trends by targeting luxury experiences and boutique properties.

Renewable Energy

Portugal is a leader in renewable energy, with ambitious targets for solar, wind, and green hydrogen. Investors in this sector benefit from government incentives and the country’s commitment to sustainability.

Agriculture

Portugal’s agricultural sector is another vital part of its economy, contributing significantly to exports and rural development. The country is the world’s largest cork producer, accounting for over 50% of global production. Its wine industry, particularly Port and Vinho Verde, enjoys international acclaim.

Portugal Golden Visa Residency-By-Investment Programme

Although the property route is no longer valid, the Golden Visa remains a strong and popular pathway for non-EU/EEA/Swiss investors. Venture capital and investment funds are now the most sought-after options for residency. After five years of holding a Golden Visa, investors can apply for Portuguese citizenship, extending these benefits to their families.

How to Further De-Risk Your Golden Visa Investment

Portugal’s alternative investment funds sometimes adopt a blended approach, investing across multiple sectors where Portugal is outperforming the market.

This could include luxury hotel operations to benefit from Portugal’s thriving tourism sector, renewable energy, healthcare, luxury goods, tech, international events, and media.

These diversified strategies appeal to investors seeking both more stability and exposure to high-growth opportunities, mitigating risks tied to a single sector.

Paul Sheedy, international advisor to the Portugal Future Fund, an alternative investment fund approved for Golden Visa residency-by-investment in Portugal, said: “A blended approach to investment—spanning sectors such as luxury hospitality and tourism, renewable energy, media, healthcare, and technology —not only aligns with Portugal's dynamic economic landscape but also creates a resilient portfolio that thrives across sectors.

“We have seen time and time again that a blended investment approach can protect against underperforming sectors in a portfolio, giving investors more security and downside protection.”

To get in touch with the Portugal Future Fund or other alternative investment funds approved for Golden Visa, contact Portugal Pathways

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.

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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