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Why Portugal Will Rebound Far Better From the Crisis Than Competing RCBI Programs


It’s impossible to talk about investments or even money without starting the conversation by mentioning COVID-19. It was unexpected, it made colossal ripples around the world, yet we are slowly coming to terms with the fact that we need to adapt to the new circumstances.

As investment managers, we never put much stock in panics and daily responses; we are in it for the long haul. While we realize the “long haul” might look a lot different now, we weren’t caught completely off-guard as we were already arming ourselves for a market correction (though not of this magnitude, obviously).

From an investment perspective, the effects of COVID-19 can be summed up in one sentence; whatever weakness you had before, it’s now a life or death situation for you. If you failed to differentiate between assets, you have a problem. If you put all your eggs in one country, chances are you are suffering as a result of it. If you failed to adopt a portfolio strategy with respect to your citizenship and residency needs, tough luck, you have a small period of time to make your decision. And last but not least, if you got caught in a hard-to-liquidate position, you are at risk. 

Our base of operations, Portugal, did not let us down during the first months of the fight against COVID-19. This was mainly due to the government’s quick reaction and the rapidity with which the population has adapted. On top of that, Portugal’s low population density and robust health system (ranked 12th in the world by the WHO) allowed the country to rise to the challenge. In the coming years, both tourists and investors will remember the convincing performance Portugal gave in the face of the pandemic.

After the mandatory COVID-19 entry, let’s take a snapshot of how the main catalysts of investment immigration are doing around the world, namely authoritarianism, income disparity, suppression of personal freedoms, geopolitical risks, and economic instability. Of course, we’ll use Portugal as a benchmark with respect to these.

Before discussing specifics, let’s review the main points that, in our opinion, make a country more competitive for residency/citizenship seekers using some indices: 

IndexQuality of LifeGlobal Peace IndexHealth System Cost of LivingPress Freedom
SourceExpat Insider Survey
Vision Of Humanity
Numbeo (relative index)
Reporters Without Borders
Portugal 1 3
12 49 10
Spain 232 7
54 29
UK 48 42 18
USA 44 121
37 7145
Canada 11 6 30
Greece 38 65 14   5665

If authoritarianism was a global issue before, it’s now on steroids. Governments are leveraging the need for security to encroach on personal space and this translates into the suppression of personal freedoms. From an investment perspective, this is a surefire way to chase FDI out of your country. FDI loves freedom and sooner or later shies away from authoritarianism.

Our favorite indicator with respect to this subject is press freedom and Reporters Without Borders puts Portugal 10th on this subject as of 2020. There are no competing countries that rank better than Portugal on this subject. Besides, in order for authoritarianism to take hold, you need a hardliner president and Portuguese President De Sousa who was touted “a politician from another planet” on Twitter when he was seen shopping like a random citizen is not the leader to suffocate his country.  

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Geopolitical risk, another problem amplified by the current situation, is suppressed at the moment. It is, however, a ticking time bomb as national governments will need new enemies in order to take the attention away from their crumbling economies. This is not an issue for Portugal as they adopted a zero-friction policy worldwide. This is reflected in the Global Peace Index rankings, which saw Portugal jump to the top after ranking 12th in 2015 and 3rd in 2019.

Healthcare system
In countries where the health system was already hard to reach due to lack of facilities, lack of personnel, or financial barriers, the effect of the recent health crisis was felt the most. In some countries, the combination of the above factors with public indifference yielded catastrophic results. Portugal’s comparatively good results, when compared to direct competitors like Italy and Spain, will give the country an edge in the years to come. 

Economic stability
It would be a blatant disregard of the facts to claim a country will not feel the shockwave of the C-19 crisis in the years to come. All economies will feel the impact, some more than others. Developing countries will be hardest hit because their currencies will see a depreciation (relative to the dollar) in the near future, while developed countries will see inflation as central banks worldwide have adopted the strategy of the Zimbabwean central bank, who famously decided printing money nonstop was the way forward during their economic hardships.

Portugal will see some of the negative effects but they have a secret card up their sleeve, something most countries missed: Their laser focus on tech start-ups and the above-and-beyond effort by the Portuguese government to support the techno-economy. We’re using a different metric to measure the success here: “Unicorns per million people”. Portugal ranks 9th on this metric, its immediate competitors nowhere in sight. 

Country Population Unicorns Unicorns/1 Mil. Population
Estonia 1.326.535 2 1,51
Israel 8.655.535 7 0,81
Singapore 5.850.342 4 0,68
Sweden 10.099.265 6 0,59
Hong Kong 7.496.981 3 0,40
U.S 331.002.651 124 0,37
Switzerland 8.654.622 3 0,35
Portugal 10.196.709 3 0,29
South Korea 51.269.185 11 0,21

For the last three months, the questions we received from potential investors shifted markedly away from the “Golden Visa 101” type of questions and toward how well-protected their investment is, as more and more people want to treat their GV investment as a “nest-egg” instead of something illiquid that may give them a decent yield. Because, let’s face it, financial freedom is the biggest freedom of all, and these days it’s fast becoming the only path to other types of freedoms.

We want to re-iterate some tactics to make sure the investment, at the end of the mandatory investment period, serves as the aforementioned nest egg in order to give the investor a clean-start they need should they need it.

  • Liquidity: We can’t emphasize enough the importance of assets that are easier to liquidate at the end of your investment period. Some investors are learning this the hard way only after acquiring their passports. They have spent five years to wait but the nest-egg isn’t mature yet because of the overpromising involved when the assets were sold. At This point, buying central and buying from a location that has robust demand is extremely important if the investor is looking to liquidate once they get their passport or permanent residency at the end of the 5-year period.
  • Exit Plan: An exit plan that says “I’m going to sell the property” is not a plan but a wish. An investor should have a clear strategy when selling their property. For example, if it’s only attractive to Golden Visa investors, that could be a problem as the GV market corresponds to a small portion of the total property sales in Portugal. For a fund investor, of course, this is not an issue but the investor should have a solid idea about what the fund manager/investment advisor is planning.
  • Yield: While most investors are targeting to keep the property value stable they ignore the most important part of doing a real estate investment: yield. Chasing the huge upside exit in a market where you are a stranger is never a good idea and it’s the yield that is going to keep your investment alive and insure you against a dip in the market. A 5% return over five years gives you a cushion that accommodates a 25% price decrease at exit.  Of course, the issue of tax efficiency a big factor here and we will discuss that at the end.
  • Diversification: While it’s hard to diversify while fulfilling the step one above where we explained investing in prime central locations, we have to discuss the importance of diversification. Buying two 250k units instead of one 500k units is extremely important as it increases the investor’s resistance to shocks involving the yield as well as liquidating at the end of the investment. However, for property option the diversification rule is in effect impossible without contradicting the above-mentioned yield and liquidity options. For fund investments, of course diversification is super easy as any respectable fund has 15mil+ EUR in assets or cash.
  • Tax-efficiency: For big companies tax efficiency of investing in a country is one of the make or break functions. Imagine this, if you make 4% tax free, that’s the same as making 5% at 20% income tax. Any taxes that you do not incur is essentially an increase in your yields and of course the opposite applies. While doing your Golden Visa investment, please learn what the poorly named Non-Habitual Tax Regime of Portugal can do for you by talking to an expert.

As one of the first movers in the market, we are happily seeing the €350,000 fund option gaining even more traction. It’s fast becoming a great option for remote investors who won’t be traveling to and from Portugal in the coming months and the rising popularity will give the perfect boost to the Portugal economy in the bid to rebound after the Covid-19 impact.

If you have further questions or would like a personal meeting to discuss your next steps, please don’t hesitate to contact us by clicking the following link  or e-mail us directly at

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