A ‘golden’ opportunity to relocate to Portugal1st Jun 2019
If an endless supply of pasteis de nata isn’t enough to entice you to relocate to Portugal, perhaps the favourable quality of life, cost of living and friendly investment and residence programmes will do the trick.
Portugal has become one of the most sought-after destinations for South Africans seeking to relocate, largely because its investment opportunities and Golden Visa regime make it one of the easiest European Union countries to secure residency and citizenship – simply by purchasing property to the value of €500,000, provided certain conditions are met.
PORTUGAL AS AN INVESTMENT HOTSPOT
Portugal has significantly recovered from the financial crisis in 2008, says George Radford, IP Global Director, Head of the UK and Africa. IP Global is an international property investment firm.
The government investment initiative Portugal Ventures has created a €450 million access fund to promote innovative start-ups, while international companies like Google, Mercedes, and Farfetch.com have all set up incubators in Lisbon.
The City of Lisbon is spending €523 million on a city-wide investment plan to enhance its infrastructure. Meanwhile, a massive development in Lisbon’s Beato District will host 700 international tech employees and entrepreneurs.
IP Global, whose clients have invested over US$3.2 billion across 32 markets worldwide, indicates that there has also been a robust housing market in Portugal’s capital since 2014.
‘The average house price has doubled from the 2012 figure, and capital appreciation for the next five years is expected to be 19.2%. Investors will also be pleased to hear that the average price per square metre is significantly lower than other European cities – €4,074 vs €5,327 in Berlin, €6,106 in Dublin and €15,511 in London.’
Competitive lending rates and payment plans make it even more attractive to invest in Lisbon’s housing market, but the destination also ticks many other boxes for South African expats, Radford says.
Beautiful open landscapes, plenty of sunshine, a mild climate, world-renowned wine – in many ways Portugal could be South Africa. Except that, unlike South Africa, it ranks consistently highly when it comes to perceptions of safety and security, and other quality-of-life measures.
According to Expat Insider, Portugal ranks sixth out of 68 countries in the overall results for 2018. In three indices, the country ranks in the top 10, including fifth for ease of settling in and second for quality of life. The quality and affordability of medical care in Portugal is ranked above the global average, the local people are regarded as largely welcoming and friendly and, even if you don’t speak Portuguese, it is still generally easy to live in Portugal.
When it comes to families, Portugal comes up trumps, ranking ninth out of 50 destinations in the Family Life Index. Some 94% of expats are generally satisfied with their personal family life compared to the global average of 79%.
Parents say they do not struggle to afford childcare and, when it comes to educational standards, over four in five parents say the quality of education in Portugal is generally high.
The message for South African families is that Portugal is a great place to raise a family and enjoy a high quality of life.
PORTUGAL’S GOLDEN VISA
Launched in 2012, the Golden Visa was the Portuguese government’s strategy to attract investment, particularly by non-EU citizens, says Radford. South Africa is among the top five groups of Golden Visa holders, who have in turn contributed to the overall €3.36 billion investment in Portugal’s real estate scene since March 2018.
‘For South African beneficiaries of the Golden Visa regime, there is no need to obtain a visa to travel anywhere in Europe. They can live and work in Portugal and even extend residency to their family members,’ Radford says.
Investors must purchase any property type to the value of no less than €500,000 to participate in the Golden Visa regime. ‘You are free to occupy or rent the property, but must pay in cash to be eligible for the Golden Visa. For the remaining amount above the threshold, you can apply for a mortgage.’
Furthermore, as part of this regime, Portugal has introduced a tax-friendly jurisdiction – a 20% flat rate for non-habitual residents for 10 years, with an additional surcharge of 3.5% applicable to income obtained in Portugal. Better still for South Africans, as a result of a treaty between Portugal and South Africa, there’s no double taxation.
Investors don’t need to relocate permanently. Unlike most EU countries, where you are required to live permanently to secure residency, Portugal’s Golden Visa regime grants this status for expats who spend more than seven days in the first year of residence and 14 days in each subsequent year.
SIX REASONS YOU SHOULD RELOCATE TO PORTUGAL
SAFETY – the 2018 Global Peace Index rates Portugal as the fourth-most peaceful country in the world. According to the US Bureau of Diplomatic Security, Portugal has a relatively low crime rate overall.
COST OF LIVING – according to Expat Insider, 77% of expats say their household income is enough or more than enough to cover their living expenses. Some 51% of expats believe that the cost of living in Portugal is generally affordable.
INFRASTRUCTURE – the (WGCI) World’s Global Competitiveness Index puts Portugal as the 18th-most competitive country in infrastructure in terms of quality of roads and telephone landlines, and health and primary education, including infant mortality and primary education enrolment.
PROPERTY INVESTMENT – the PWC Emerging Trends Report puts Lisbon as the top overall prospect in Europe in terms of both investment and development. For investors, Lisbon comes second in terms of increasing capital values and rental values, above such destinations as Madrid, Frankfurt, Dublin and Paris.
EU CITIZENSHIP – South Africans can achieve permanent residency after five years and citizenship after six years, provided they pass a Portuguese language test. This is major draw for South Africans to invest in Portugal, as the Portuguese passport is considered the fourth-most powerful passport on the planet, according to Henley and Partners’ 2018 Passport Index.
TOURISM – besides offering easy accessibility to the rest of Europe, Portugal is in itself a major tourism destination with historic landmarks, culture, gastronomy, wines, beaches, golf and popular festivals. Its exceptional tourism assets, from Porto in the north right down to the sun-kissed Algarve, have won it the coveted distinction of the World’s Best Destination as rated by the World Travel Awards.