Portugal’s Success in Managing Covid-19 Might Boost Its Economy
- Portugal is among the best European countries in managing Covid-19.
- Lisbon’s prime real estate market is set to grow in 2020.
Portugal’s successful healthcare system successfully endured the global pandemic as the threat diminishes. The statistics that show Portugal’s low contagion rates are seen as indicators that show that the country will attract interest from investors and tourists after the pandemic. Highlighting the safety of the country, Pedro Siza Vieira, the Economy Minister of Portugal said that the country should be seen “as a very safe place where the health system is strong and where tourists can expect very high health and safety standards.”
Lisbon Real Estate is a Safe Bet
Portugal remains confident that it will recover very quickly after the pandemic. The IMF’s recent forecast supports the claims of Portuguese authorities. The report predicts that the economy will contract 8 percent due to Covid-19. However, it also predicts that 2021 will experience a 5 percent growth. Furthermore, Knight Frank’s latest analysis ranks Lisbon among the only 4 cities that will experience growth in their real estate market values in 2020. Kate Everett-Allen, the head of international residential research at Knight Frank, argues, “In Lisbon, Portugal’s handling of the crisis, combined with strengthening demand and limited prime supply, will underpin price growth.”
Portugal’s Non-Habitual Residence Scheme will Gain Value
Many reasons make Portugal an attractive investment location. One of these reasons is its non-habitual residence scheme. This scheme offers impressive tax benefits to investors. Most countries went through a harsh process when facing the pandemic. The crisis has caused immense expenses for governments. Understandably, these expenses are likely to return to citizens as additional taxation after Covid-19. Pursuing to protect their assets, investors may seek advantageous tax schemes in this period. Therefore, Portugal’s non-habitual residence scheme may expand its worth after the crisis is averted.
Portugal Golden Visa Program will Recover the Country’s Economy
In a recent report by the New York Times, Portugal Golden Visa Program is referred to as the “mechanism for recovery [that] already exists”. Supporting the claim, the program continues to impress through the pandemic. The reports of SEF show that 70 investors applied to the program in February. The number went down to 55 in March, and to 53 in April. The amounts generated respectively were 28 and 28.8 million euros. These numbers suggest that even during the pandemic, Portugal Golden Visa Program can bring considerable income to the country.
Paralleling the recent trend of the program, alternative routes of investment have gained popularity through Covid-19. Since the pandemic caused restrictions in mobility, investors tended towards the remote investment options. Rather than pursuing in-person transactions like real estate investments, applicants preferred other options. Until 2019, almost 95 percent of the total investor number in the program had chosen the main real estate investment option. In the last few years, the trend started to change. In 2019, 22 percent of the investments were made into the EUR 350,000 real estate investment option. Similarly, the venture capital fund option of the program had 7 investments until 2020. This year, the number jumped up to 17. While the sum of the alternative routes amounted to 1 percent of the total investment in a few years ago, in 2019, the ratio was 25 percent.