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Portugal’s digital nomad bubble

105 pointsby ugurnotover 2 years ago

21 comments

alzamosover 2 years ago
Currently living in the Algarve after moving to Lisbon with my partner for her studies years ago.<p>I know a few non-crypto entrepreneurs who came here for the NHR (non habitual resident scheme - the scheme mentioned in the article which allowed for the 20% tax cap on foreign income).<p>I can confirm that a lot of them were incredibly frustrated with the bureaucracy they encountered, not just when dealing with the government, but generally in everyday life. Most people have war stories related to accountants, lawyers, banks, telecom companies or landlords. The real kicker was when they realised that the 20% didn’t include social security payments, bringing most of them (those that didn’t pay hefty fees to set up companies in tax havens, and pay themselves exclusively in dividends) to an effective rate that wasn’t that far off what they’d be paying elsewhere. Needless to say the expat churn has been quite high.<p>Regarding Airbnbs and rising housing prices - I’m no economist but intuitively, I’ve always thought it made more sense to blame the explosive growth in tourism Portugal has had in the last decade or so (6M tourists visiting Lisbon, a city of 500k people) rather than the 10-20k digital nomads. Would be curious to know if anyone has better numbers or studies.
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lildataover 2 years ago
Young Portuguese have been emigrating for the last 50 years. The country is full of second residences, bought by people who took advantage of cheap real estate until recently. Blaming today&#x27;s inflation and cost of living on a few digital nomads or crypto people doesn&#x27;t make much sense.<p>What also chocked me when visiting Lisbon or Porto is the number of old abandoned buildings in what I would consider nice areas. I have always wondered what was the reason for that...
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rcarmoover 2 years ago
The article is way overblown and borderline clueless. First off, the Luddites demonstrating before the Web Summit had a political backing, they’re not a grassroots movement. That demonstration happened for the cameras (and to further a small party’s ambitions to the limelight).<p>Second, there is indeed backlash against the golden visa program, but the most meaningful bits are due to visas being granted to people who do zero actual investment in the country.<p>As to real estate, this is just the peak of a long crisis brought upon by idiotic zoning laws that favored high-value condos and villas, under pressure from a bunch of lobbyists from the building industry (we have at least two major cement lobbies here, each driven by its own influential family).<p>That, an emphasis on tourism and landlords’ resistance to maintaining or rebuilding existing buildings (partly due to inheritance laws, yes, but mostly driven by greed) has made it impossible to buy new flats in Lisbon even before “gentrification” from techies began.<p>(AirBnB is just another factor in this - a lot of those nice villas and flats are priced outside local affordances, and whoever buys them does so to rent out and drive a quick profit, since a lot of AirBnBs aren’t even taxed…)<p>The only thing the article gets right is that we have a completely bullshit legal and tax system that takes far too long for anyone to sort out - even natives. As an example, it is _much_ less sensible to work as a tech contractor here (unlike, say, the UK) because the fiscal load and legal protection are all stacked against you.<p>Even with “instant company” fast-tracking (which gives you a working legal entity in a few hours, provided you know where to apply to and how to do the paperwork), setting up a business and having official accounting requires some effort for a random Jane&#x2F;Joe, especially if foreign.<p>But those barriers are fixable if you hire a local relocation&#x2F;setup service, so real startups and savvy techies can breeze through those. The real trouble comes when you need to do contracts, pay taxes, etc. and there is a legal issue — courts here are slow, Byzantine and can take years to close a case, so brokerage (which can be fraught to navigate) is often the only option.<p>Anyway, the country isn’t broken because a few thousand crypto bros decided to settle in nice villas here. I know of several companies that are thriving here (hi Cloudflare!), even if there are constant paper cuts regarding bureaucracy.
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ChuckNorris89over 2 years ago
<i>&gt;Portugal sought to lure them with tax breaks [...] Portugal, then with no taxes on crypto-derived capital gains, fit the bill [...] “We have neighborhoods now that are mainly Airbnb,” said Ana, the Portuguese teacher, “We don’t have our homes anymore.” [...] locals protest against rising costs and gentrification</i><p>Surprised nobody saw gentrification and rising CoL coming when they invited crypto asset holders and workers who earn several times more than the locals while contributing much less in taxes.<p>Seems like a move that only benefited the Portuguese landlords and real estate owners at the expense of the rest of the population.<p>If I was a Portuguese citizen I&#x27;d be pissed at such a decision that prioritizes wealthy foreign crypto and tech bros over its own citizens and make sure to vote those politicians out.<p>Portugal is not Dubai. It can&#x27;t afford to be a tax heaven with government revenue funded by oil instead of taxes. A country like Portugal should seek to attract businesses and investors who create jobs and pay taxes there, not attract wealth hoarders who dodge taxes and who&#x27;s only contribution to the local economy is making landlords richer and buying cocktails on the beach.<p><i>&gt;The center-right Moedas, for his part, said that while clarity on crypto and taxes is welcome, “when you start taxing innovation too soon, you can kill innovation. And so I&#x27;m not aligned with the government on this.”</i><p>Oh please, taxing crypto assets is not taxing innovation. WTF are you talking about? I feel like I&#x27;m taking crazy pills when I read stuff like this.
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traveler01over 2 years ago
As a portuguese it blows my mind that &quot;digital nomads&quot; are choosing the country to live in. Surely the country has great weather, food and you get an hefty tax discount that the natives can only dream about (20% of income tax is wayyy lower than a living wage in this country pays). But if you investigated a bit more you would see that the emigration rates of the country are going through the roof.<p>It should be a huge red flag that one &quot;nice&quot; country has more than 20% of it&#x27;s population living abroad: <a href="https:&#x2F;&#x2F;poligrafo.sapo.pt&#x2F;fact-check&#x2F;cotrim-de-figueiredo-portugal-tem-mais-de-20-da-populacao-a-viver-fora-a-maior-percentagem-da-ue" rel="nofollow">https:&#x2F;&#x2F;poligrafo.sapo.pt&#x2F;fact-check&#x2F;cotrim-de-figueiredo-po...</a> (you might want to use Google Translate on this one).<p>I also saw some comments blaming the tourism for this &quot;bubble&quot; bursting. The portuguese can&#x27;t complain about tourism since it&#x27;s a huge part of our PIB.
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michaelteterover 2 years ago
It’s ridiculous to blame digital nomads. If there is a primary source to blame, it would be Airbnb.<p>This gentrification and tourist problem began well before Lisbon became a DN favorite.<p>Also it’s a global problem as wealth accumulation means individuals and companies can’t find enough places to “safely” put cash. Real estate, especially when it can generate good income, is an obvious choice.<p>Plus, Portugal attracts wealthy Brazilians who want a comfortable, safe, and European home.
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crossroadsguyover 2 years ago
Lots of Goan friends have finally opted for that &quot;ancestral&quot; Portuguese passport and none of them have any intention of either working or staying in Portugal ever.
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yieldcrvover 2 years ago
&gt; Critics “have to understand there is not a dichotomy” between drawing in outsiders and caring for locals.<p>Can confirm, I’ve stayed longer than short term in many cities and am a transplant in all cities. Some places handle it better than others, every place points fingers at a the nearest most visible externality. What they all hardly consider:<p>- their neighbor could have set the rent super high at any point in history, and didnt gamble on doing that then and didnt have to gamble on doing that now. the rent doesnt <i>have</i> to be that high and you can likely peer pressure them into not raising it to its highest acceptable threshold<p>- I dont care what the rent is anywhere, more on this later<p>- <i>anyone</i> that can afford the current rent, set unilaterally by a gambling landlord, is usually paying more than everyone else<p>- and circling back, any unit in any city would satisfy me, so even if I would pay $6,000 in Miami and thats super high, the $1500 place in Austin would remove me from the market, even though thats high to people in Austin (example, I dont actually know, or care)<p>- all together this puts it more so on the gambling landlords in all places, yes there are some tenants that ask for higher rent just to skip the application queue but I would need that quantified
binaryapparatusover 2 years ago
Two+ years in Algarve, with registered activity and paying all the taxes here. Having foreign income all my taxes fall within sweet NHR regime. Can&#x27;t say anything bad about bureaucracy, with proper lawyer help it is slow-ish but very decent process.<p>Lease prices are driven by taxes and tourism, short term (AL) accommodation is taxed at 6%, long term lease contracts go from 30% (for 1+ year contracts) down to 10% (for 10+ years contracts). Obviously landlords are pushed into short term accommodation which creates lack of long term offers. Matter of getting taxes more fair over long&#x2F;short term categories would fix the market immediately.<p>Quality of life and nice people are above anything else so I wouldn&#x27;t change a thing from this current setup.
tiffanyhover 2 years ago
I wonder how many came via Pieter Levels <a href="https:&#x2F;&#x2F;rebase.co" rel="nofollow">https:&#x2F;&#x2F;rebase.co</a> (online immigration service)
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garbagecoderover 2 years ago
I was just in Lisbon yesterday. I recommend the Lisbon Winery for a lesson in port wine and great food. It’s a nice city, the level of English is high, but it’s not as modern as other European cities. Plus, who wants a horde of cryptobros anyway? What “innovative” about tulipomaniacs?<p>As for Airbnb, that’s the same is most touristy cities and it’s not just because of nomads.
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pjmlpover 2 years ago
Yeah, affordable living only for the Portuguese that have to find housing on the outskirts and drive one hour to work, because naturally our public transport network isn&#x27;t that great anyway.<p>Thankfully I got my housing situation clarifyied several years ago.
nodemakerover 2 years ago
Yeah one thing I have learnt in my adventures is that you should never try to do business in a non advanced economy. I keep all my business in the Netherlands no matter where I live.
forgotmypw17over 2 years ago
<a href="https:&#x2F;&#x2F;archive.is&#x2F;fBneE" rel="nofollow">https:&#x2F;&#x2F;archive.is&#x2F;fBneE</a>
maeilover 2 years ago
Is this purely a Lisbon thing, or has it exploded over the last 6 months? I visited Porto last spring and there weren&#x27;t any crowds nor many foreigners, it was pretty quiet.
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robbywashere_over 2 years ago
There’s a comment somewhere about colonialism of the past and irony in this thread but I haven’t found it yet
RagnarDover 2 years ago
I wouldn’t say Lisbon is an ideal city to settle down in.<p><a href="https:&#x2F;&#x2F;www.air-worldwide.com&#x2F;publications&#x2F;air-currents&#x2F;from-1755-to-today-reassessing-lisbons-earthquake-risk&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.air-worldwide.com&#x2F;publications&#x2F;air-currents&#x2F;from...</a>
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PaywallBusterover 2 years ago
Portugal is heavily bureaucratic and centralized in Lisbon<p>Fire&#x2F;reduce public servants and spread them away from Lisbon, there, solved!<p>sources:<p>&quot;highest increase in jobs can be seen in central administration&quot;<p><a href="https:&#x2F;&#x2F;www.portugalresident.com&#x2F;number-of-public-sector-workers-close-to-highest-of-all-time&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.portugalresident.com&#x2F;number-of-public-sector-wor...</a><p><a href="https:&#x2F;&#x2F;ec.europa.eu&#x2F;social&#x2F;BlobServlet?docId=19963&amp;langId=en" rel="nofollow">https:&#x2F;&#x2F;ec.europa.eu&#x2F;social&#x2F;BlobServlet?docId=19963&amp;langId=e...</a><p>76% centralized government <a href="https:&#x2F;&#x2F;op.europa.eu&#x2F;en&#x2F;publication-detail&#x2F;-&#x2F;publication&#x2F;b9bd6909-649b-11ed-92ed-01aa75ed71a1&#x2F;language-en" rel="nofollow">https:&#x2F;&#x2F;op.europa.eu&#x2F;en&#x2F;publication-detail&#x2F;-&#x2F;publication&#x2F;b9b...</a>
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exhibitappover 2 years ago
Not advocating for the influx of &quot;crypto bros&quot; and &quot;digital nomads&quot; but to blame the current wave of inflation on them is a bit ridiculous
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zeruchover 2 years ago
I certainly hope so.
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Kukumberover 2 years ago
&quot;digital nomad&quot;<p>how is that a thing, as a society we keep reaching new lows year after year, this is very concerning<p>&quot;repeating past mistakes is our motto&quot;