It is perhaps a sign of the times that our recent online poll attracted a relatively small number of votes from those living in Portugal, offering reasons why they moved to the country. Historically, Portugal has been a very popular destination for many European expats and indeed the UK expat community has been very active in this particular country. However, it seems that Portugal may well have “past its sell by date” with regards to the current expat community but will it return in due course?
Still, Portugal is a heavy competitor to other favoured expat destinations, such as Spain or France. Actually, Portugal rank at the top for people looking to retire abroad (nearly three out of ten expats), as it has been revealed by a poll conducted by Expat Forum on behalf of Barclays Wealth International.
There are very few of our articles in relation to the online poll which put retirement as number one, something which may well have been more popular 20, 30 or even 40 years ago. However, it is interesting to see that retirement is seen by many as the main reason to move to Portugal having received 29% of the vote. This is a country which is blessed by sun, sea and sand and one which has attracted more than its fair share of tourists over the years. This is a country which has also attracted more than its fair share of property developers on the coast and sold a significant number of properties to overseas investors.
While it would be wrong to suggest that Portugal has a relatively small number of expats in retirement there is no doubt that historically the numbers are starting to wane. Whether, as we have suggested on numerous occasions, it is the introduction of the Internet and numerous travel guides that have opened up the world, or perhaps plain and simple, many expats are now looking to “cheaper countries”. Another fact taken into account by prospective retirees is how easily they can manage their day-to-day life. Besides being a welcoming country where English speakers can be easily found, Portugal offers a banking sector that has been largely unaffected by the recent global financial crisis. In recent years, increased competition in retail banking has resulted in banking customers benefitting from a more competitive, enhanced range of banking services. A good way to get used to the local particularities of the Portuguese banking sector is to have at hand the guide to banking in Portugal created by Barclays Wealth .
When you take into account the fact that the European economy is currently struggling, with Portugal seen by many as a potential falling domino in the short to medium term, it may surprise many to see employment as the second most popular reason to move to the country. Having attracted 25% of the vote, with 29% of people voting for retirement as the main reason, these two particular options are by far and away the most popular. But what exactly does the Portuguese economy have to offer?
We have seen significant changes within the Portuguese economy over the last 20 years with a gradual transformation from a public consumption economy to one which is based upon exports, private investment and up and coming high-tech industries. However, agriculture still plays more than its fair share in the Portuguese economy although this has reduced significantly over the years. It will also come as no surprise to learn that tourism is also still a very prominent sector within the Portuguese economy and one which has managed to survive the test of time.
Weather (16.67%) and Standard of living (16.67%) still important when becoming an expat
When you consider the popularity of Portugal in years gone by, predominantly because of the weather and tourism, it seems obvious that the weather is the joint third most popular reason for moving to Portugal. Official reports suggest that Portugal is one of the warmest European countries with an average mainland temperature throughout the year of 13°C in the mountainous areas which rises to 18°C in the South. Annual rainfall in Portugal varies between 3000 mm in the northern mountains to less than 300 mm a year in some areas.
However, it is also worth noting that Portugal has more than its fair share of mountainous regions and indeed snowfall is regularly experienced in the north and central area of the country. There are sporadic snowstorms in the south of Portugal which helps to offer a very different and a very varied climate for those looking for pastures new. In reality, for the vast majority of those looking to move to Portugal, the coastal areas are by far the biggest magnets with a variety of tourist attractions catching the eye of millions of people. Despite the fact that Portugal may well have been overtaken by some of the “new kids on the block” it is still a very popular region of the world.
It is interesting to see that the standard of living in Portugal is the third most popular reason to move to the country, especially when you consider that Portugal has one of the lowest incomes per head among member states of the European Union. Unemployment is a problem in the region having increased from 7.3% in the second quarter of 2008 to over 12% in 2011 with many experts forecasting more problems on the horizon. There is no doubt that an increase in unemployment will put further pressure on the Portuguese government budget and will also impact upon the standard of living which many people enjoy.
If you’re looking to move to Portugal to take advantage of the relatively good standard of living then you will need to ensure you are fully funded. Relying on the local employment market in the short to medium term could be dangerous as a number of financial experts are predicting that Portugal could be one of a raft of countries impacted by contagion from the “Greek tragedy”. Another option to keep you blinded against the economy downfalls when in Portugal is to explore the benefits of opening an offshore bank account. They normally open the doors of safe havens, at the time that can bring you additional tax and financial benefits.
Finally, and far away from the top three reasons to move to Portugal, expats enjoying the life there placed Travel the world (4.17%) and Romance (4.17%) as important aspects to consider when thinking to move to Portugal.
Despite the fact that the number of votes received from those living in Portugal was relatively low, it is good to see that travelling the world is still a reason to move to the country. Despite the ongoing short to medium-term economic challenges currently standing in the way of the Portuguese government it is still a country with a varied climate, varied geography and varied culture. Even though the European mainland press has been disparaging in many ways towards Portugal it still manages to attract around 13 million foreign tourists each and every year. If there was nothing attractive about Portugal, its culture, its geography and its climate then we would not see this number of visitors to the region.
Time and time again the subject of romance rears its head with regards to the expat community. It seems that more and more people are now taking advantage of the ability to move overseas to pastures new and to give a new relationship time to prosper. There are now record numbers of people looking to move to countries such as Portugal for love and quite frankly we wish them all the best.
However, on the downside, it is very dangerous to move to a country for one specific reason because if this particular reason does not materialise as you expected you could be left high and dry. Moving overseas for love and romance is the stuff of “Mills and Boon” although despite significant scepticism many people do find a happy life.
Unfortunately the situation regarding Portuguese taxes has not attracted the attention of expats and with the government budget deficit coming under pressure it seems almost inevitable that we will see tax increases across many areas of Europe, with Portugal one of the main leaders. As a consequence, it is unlikely that we will see the Portuguese taxation system used as any kind of bait for overseas visitors in the short to medium term. In this sense, there was only one other reason mentioned with regards to moving to Portugal and that was business opportunities, normally related to issues such as taxes and employment, for example. Whether the business arena is as lively and as vibrant as it has been in the past is a matter for debate but it seems that many people are still looking for an overseas business opportunity to kick start a new life.
It was at least surprising to see that the cost of living in Portugal failed to attract any votes, which is perhaps a sign of the times with the government budget under pressure and food prices together with fuel prices continuing to move higher. There are few countries within Europe which have managed to escape the hike in fuel prices and food prices and this is unlikely to be a reason to move to any European country in the short to medium term.
Finally, the subject of crime seems to have dropped off the expat radar somewhat with fewer and fewer people actually looking at local crime rates before they move overseas. The truth is that many developed countries such as Portugal will have pockets of crime but crime rates are unlikely to be significantly higher than the vast majority of developed countries. The old reputation which Portugal often had, along with Spain, has disappeared somewhat with inter-European co-operation allowing wanted criminals to be passed from country to country for prosecution.
In conclusion, it will come as no surprise to learn that retirement, employment, the weather and the standard of living in Portugal are by far and away the four most popular reasons for moving to the country. Tourism has been and continues to be a major part of the Portuguese economy but it seems that those looking towards retirement and those looking for new employment opportunities are most attracted to the region.
It will be interesting to see how the Portuguese government manages the ongoing economic crisis and whether indeed Portugal comes out stronger or is forced to retrench in the short to medium term.