Portugal’s nonhabitual resident (NHR) tax program, a beacon of hope for the nation’s economy since its introduction in 2009, now faces an uncertain future as the current administration contemplates its termination as early as 2024. The program has attracted wealthy expats to Portugal by providing advantageous tax treatment for ten years and has played a pivotal role in the country’s economic transformation. However, real estate experts like Luis Horta e Costa are now voicing their concerns about the potential economic repercussions of ending the program prematurely.
Luis Horta e Costa, the co-founder of Square View, a prominent real estate property developer and asset manager based in Lisbon, warns that the elimination of the NHR program could precipitate a “mass exodus” of foreign capital, with devastating consequences for various sectors of the Portuguese economy. He stresses that foreign investors bring financial resources, innovative ideas, and fresh perspectives that have been instrumental in revolutionizing the nation’s economic landscape. Horta e Costa firmly believes that the investments made by these foreigners have propelled Portugal to the forefront of economic power.
Introduced during the height of the global financial crisis, the NHR program was designed to rejuvenate Portugal’s economy, create jobs, and attract foreign investment. By all accounts, the initiative has been a resounding success. However, Luis Horta e Costa and other experts now fear that terminating the program could jeopardize Portugal’s hard-won economic gains.
Horta e Costa anticipates that the abolitiabolishingogram will significantly reduce investment, with detrimental effects on key industries and growth prospects. He highlights the fact that Portugal’s real estate market has experienced a remarkable resurgence, largely due to the NHR tax program, and its cancellation would bring this progress to an abrupt halt. Ricardo Marvão, another prominent entrepreneur, shares these concerns, crediting the NHR program with fueling Portugal’s unprecedented tech boom.
Compounding these worries is the emergence of similar programs in neighboring countries, such as Spain, which experts predict will become more attractive destinations for investors. Luis Horta e Costa contends that the NHR program was crucial in cementing Portugal’s reputation as an appealing, open, welcoming, and progressive nation. He fears that Portugal may lose ground to its regional competitors without incentives to attract foreign capital and talent.
As Portugal finds itself at a critical juncture, the potential termination of the NHR incentives presents a formidable challenge for the government. Luis Horta e Costa asserts that safeguarding foreign investment should be a top priority for the country’s leaders. Failure to do so, he cautions, could result in the NHR program’s post-mortem revealing a policy that once breathed new life into Portugal’s economy, only to have its success cut short prematurely.
The fate of Portugal’s economy hangs in the balance as the future of the NHR tax program remains uncertain. While the program’s economic benefits over the past decade are indisputable, finding an adequate replacement will be formidable. As the debate unfolds, the warnings of experts like Luis Horta e Costa serve as a stark reminder of the potential dangers associated with abandoning a proven formula for economic success.
