Recently, however, Portugal has gained a reputation as a hotspot for millionaires, wealthy investors, and those seeking a luxury lifestyle, and thriving business and investment opportunities. This has largely been fuelled by the booming real estate market and all its investment potential, as well as favourable tax incentives, a generally high quality of life, and initiatives like the Golden Visa and Digital Nomad Visa programmes.

The Millionaire Hotspot

Portugal has gained popularity as a favoured destination for the global elite seeking a high-quality lifestyle. The country offers attractive tax incentives, a favourable climate, and a thriving cultural scene. Cities like Lisbon and Porto have become magnets for millionaires and entrepreneurs looking to establish residency or invest in property.

In the latest Barnes Index City 2023, Lisbon has risen four spots compared to last year’s rankings and now stands at the 20th position. Notably, Lisbon has emerged as the 25th most desirable city for affluent individuals worldwide to invest in real estate. Leading the list is Paris, which previously held the fifth spot in 2022. Paris has surpassed Miami, a North American city, which currently holds the second position.

The top three cities that attract the most millionaire home buyers consist of New York (USA), Austin (USA), and Dubai (United Arab Emirates). Remarkably, Lisbon outranks Barcelona (Spain), Singapore (Singapore), Dallas (USA), Copenhagen (Denmark), and Munich (Germany) in the rankings, securing a higher position at number 20.

Booming Real Estate

According to the MSCI Portugal Annual Real Estate Index, the annual returns from investing in commercial real estate in Portugal increased from 6.8% in 2021 to 8% in 2022. This result positions Portugal as one of the most profitable destinations in the European market for commercial real estate.

The MSCI Portugal Annual Real Estate Index, as reported by idealista, revealed that the real estate market achieved a return of 8.0% in 2022, with particular emphasis on the hotel and retail sectors.

Portugal stood out in the European context of commercial real estate investment returns in 2022. While most other markets experienced lower returns compared to the previous year, Portugal showcased a positive evolution. Additionally, Portugal was exceptional in terms of asset valuation, as significant value corrections were observed in some of the more mature European markets, such as the United Kingdom and the Netherlands.

The influx of wealth has led to an economic boom, boosting tourism and attracting international businesses. However, this newfound affluence has had unintended consequences for the local population.

Still Time To Take Advantage Of The Golden Visa

Portugal’s Golden Visa programme has been attracting wealthy investors in droves since 2012. Offering a fast-track route to gaining Portuguese residency and, ultimately, citizenship, for those able to invest in the country. By making an investment in real estate, creating new jobs, or contributing to cultural research and development, investors have been able to reap the rewards of living, working, and being free to travel.

While the programme has come under recent fire and it was announced it would be coming to an end, there is still time to take advantage of this route into Portugal. It’s an enticing option for investors seeking to diversify their portfolios while gaining access to the European market.

Great Tax Incentives

Another factor contributing to Portugal’s rise as a millionaire hotspot is that the country consistently ranks highly in terms of destinations offering great tax incentives for high-net-worth individuals. The Non-Habitual Resident (NHR) tax regime grants tax exemptions and reductions on specific types of foreign income for a period of ten years. This includes income from pensions, and foreign income derived from highly skilled professions.

Portugal also offers a highly favourable tax environment for businesses, with competitive corporate tax rates providing a compelling reason for the wealthy to relocate to or establish new businesses in Portugal.

If you need advice on how to make the most of all Portugal has to offer in terms of financial benefit, get in touch. We specialise in helping you maximise your money, and manage it when cross-border legislation can make things complicated.

For more information contact Blacktower Financial Management on tel: +351 214 648 220 or email: