The national minimum wage in Portugal rises from €600 to €635 in 2020, a measure that should benefit 720,000 workers. The modification translates into a net salary increase of €31.13 per month (in 14 payments per annum). This basic salary is tax-exempt from Individual Income Tax (IRS). Workers pay only 11% in Social Security contributions. In the EU, the monthly national minimum wage ranges from a high of €2,090 in Luxembourg to a low of €312 in Bulgaria.
In 2019, tourist establishments registered 27 million guests and 69.9 million overnight stays, corresponding to annual increases of 7.3% and 4.1% respectively, according to preliminary data from the National Statistics Institute. Of these registered guests, 10.7 million correspond to residents in Portugal and 16.3 million to visitors living abroad.
The Government wants to end the granting of Golden Visas for third-country nationals purchasing real estate in the greater metropolitan areas of Lisbon and Oporto. In the seven years since its inception, the plan has barely touched the interior districts of the country. Historically, the concession of Golden Visas has accounted for just 3% of applications to the programme.
In November of 2019, total investments from Residence Permits for Investment Activities (ARI) tallied €37 million, a decrease of 52% over the same month of 2018 (€77.1 million). Comparing to October, when new investments totalled €60 million, the decline was 38%. In November, 64 Golden Visas were issued, of which 61 were for property purchases and three for capital transfer. In the first 11 months of 2019, investments have totalled €698 million, down 6% from the same period a year earlier. By nationality, China continued to lead in the number of Golden Visas issued, followed by Brazil, Turkey, South Africa and Russia.
In 2018, births in Portugal stood at 87,000 while citizenship concessions rose to nearly 128,000. To date, 2019 statistics continue to reflect the same proportion: net growth in Portuguese citizenship continues to be due largely to the naturalisation of foreign residents.
The value of tax benefits to non-habitual residents keeps growing according to the “Tribunal de Contas” (National Audit Office). In 2018, there were €548 million in NHR exemptions granted to foreign pensioners. Nevertheless, this apparent tax giveaway would have never existed if the NHR regime had not attracted these foreigners to Portugal in the first place. For example, these pensioners paid almost €80 million to the state in Individual Income Tax (“IRS “) on non-exempt income. In addition, there are IMT, IMI and VAT levies which the Government collects above and beyond the scope of the Non-Habitual Residency scheme.
In all, Brexit is set to cancel eight million tourists travelling in 2021. In Spain alone, there should be 1.3 million fewer UK nationals travelling according to projections of the European Travel Commission. Without a Brexit agreement, British travel should fall by 7% by 2020 and 8% the following year.
Only Greece and Latvia have more advantageous Golden Visa schemes than Portugal, requiring an investment of just €250,000 for foreigners wishing to settle in their territories. Portugal has maintained the €500,000 threshold since the creation of the programme in 2012, which is technically referred to as “The Residence Permit for Investment Activity”.
The directive on sharing tax information of multinational corporations has been stalled for the last two years in the European Council. Portugal forms part of a group of member states holding up passage of this EU ruling. The stance contradicts what the government defends in its political programme. The position also contradicts the voting record of Portuguese socialist representatives.
Local Lodging is on the decline across the country with new registrations dropping by 43% when compared to the same period last year. According to data from the Local Lodging National Register, the sharpest drop occurred in Lisbon, which fell by 73%. Porto also saw the opening of new AL establishments down by almost 50%. ALEP, the Local Lodging Association of Portugal, attributes this accentuated contraction with the overall shift from a “niche activity” to a “mature enterprise”. Local Lodging represents 40% of the total overnight tourist stays in Portugal.