The impact of the digital nomads is seen as twofold: not only have they been welcomed in through various tax incentives including the Non-Habitual Residence (NHR) program, allowing them to pay lower tax rates than the locals, but they have also helped to drive up the rent prices in Lisbon by more than 37% in 2022 alone, according to the Portugal News. Add in the fact that high-wealth individuals, some of whom also continue to work remotely, were able to buy property in Portugal’s two largest cities in exchange for golden visas from 2011-2022, and it’s easy to point the finger at digital nomads for higher prices. But are they really to blame? 

According to Politico, 16,000 digital nomads were living in Lisbon last year, a city with a population of 3 million in 2023. This is roughly .5% of total Lisbon residents. Digital nomads, according to Gonçalo Hall, comprise only .1% of the total tourism numbers in Portugal, which also reached record numbers in 2023 with 30 million visitors to the country, as reported by the European Travel Information and Authorization System. 

In the meantime, open EU borders allow local Portuguese to become nomadic themselves and go where they can be paid best. They may get location-based work in other EU countries or find remote work and choose to work around the world. At the same time, EU citizens looking for better weather and the chance to live near the beach can move to Portugal with very little paperwork, and many could qualify for the reduced NHR tax rate before this tax benefit closed at the end of 2023.

For example, although German citizens are paid in the same currency, the fact that German wages are much higher allow Germans to afford higher rent in Lisbon, and landlords are happy to charge higher rents if there are no legal controls against it. In fact, it was only recently, in 2023, that the Portuguese government moved to put in rent increase controls, but this only applied to new lease contracts that succeeded contracts signed in the last five years. New housing going up for rent or those being leased for the first time can be set to any rent that the landlord chooses. 

When you travel around Lisbon in 2024, what becomes immediately apparent is the number of abandoned buildings right next door to new construction. Seemingly half of central Lisbon is under construction, but often the sign under the new construction promises expensive new apartments or fancy hotels, not any place that a hard-working middle-class Portuguese family could afford.

It’s easy to blame digital nomads for a cost of living crisis that stems from a whole range of issues.

If you want to keep the Portuguese in Portugal, start with using a portion of the money coming from tourism to increase the local wages, cap more of the rents, and give landlords incentives to rent to people with Portugal-based employers. Only then can the tide truly start to turn. 

The post Exodus In Portugal Continues: Are Digital Nomads The Ones To Blame? appeared first on Traveling Lifestyle.

The island is located in the Atlantic Ocean, about 350 miles (560km) off the coast of Morocco. It is the largest inhabited island in the archipelago with about 309 square miles (801 km). Its neighbor, Porto Santo, is also inhabited, and distinguished as having the best beaches.

Funchal is the capital of the island chain that is an autonomous region of Portugal.

Madeira is an island of eternal spring with temperatures around 70 degrees Fahrenheit from December to April and in the mid 80 degree F range the rest of the year. The area around Funchal is more arid, with the northern part of the island receiving more rain from October to April. Europeans make frequent journeys to Madeira during the cold winters on the continent.

This scenic, year-round resort, is best known for its Madeira wine. The island also produces bananas and other tropical fruits, along with sugarcane. Madeira derives most of its economic growth from tourism, with many popular hotels and condominiums available to visitors year-round. While the northern part of the island is still rural, the southern area around Funchal offers outstanding accommodations, restaurants, and entertainment.

Activities for Everyone

Madeira Islands is a perfect vacation destination as it has something for everyone.

Charter catamarans take visitors on tours to see migrating whales and dolphins. Hikers can take tours into the mountains to visit waterfalls and peaks that offer spectacular views of the islands. A shuttle service is offered to hikers who want to watch the sunrise at Pico do Arieiro. Hikers can visit Laurissilva Forest, a UNESCO World Heritage Site.

There are walking tours of Old Town and a special Skywalk and Wine Tasting Jeep tour. Madeira also has a Carnival celebration along with an annual flower show and wine festival.

Direct Flights from the U.S. and Europe

Direct flights are available to Madeira from most major European cities. In addition, British Air and other airlines offer service from Washington, D.C., and New York to Funchal.

The post This Destination Ranks Again As The Best European Island In 2024 appeared first on Traveling Lifestyle.

This newfound allure of Portugal among digital nomads is attributed to several factors, as highlighted by lawyer Ricardo Nascimento. The country’s mild climate, affordable living costs, and rich culture create an appealing place for remote workers to set up their base. Portugal’s position as the sixth most favorable destination on the Global Remote Work Index along with its abundance of beaches further cements its status in the remote work community.

However, recent policy changes may significantly impact this trend. The recently resigned Portuguese Prime Minister, António Costa, announced the termination of the Non-habitual Residence (NHR) tax regime for new entrants from 2024. This regime, introduced in 2009, aimed to attract skilled professionals and wealth to Portugal by offering reduced tax rates on income for a decade. Costa argues that this scheme, while successful in its time, now contributes to inflated housing prices and a disparity in the living conditions of locals and expatriates.

Costa’s decision reflects a broader concern about the social implications of such policies. As Manuel Poças reports in an article for Portugal.com, “The NHR is arguably ceasing to make sense because it can be perceived as sending the wrong message. Many believe that the inequality between the special regime and the traditional regime is doing more harm than good to Portuguese society.”

Meanwhile, the nation faces an ongoing challenge of retaining its homegrown talent. A significant portion of Portugal’s college graduates, estimated at 40% by Business Roundtable Portugal, emigrate annually in search of better opportunities. This brain drain is compounded by the increasing difficulty in hiring and retaining local workers, as noted by Banco Comercial Chairman Nuno Amado. Ironically, while the government’s policies have successfully attracted foreign residents, they may have inadvertently made local recruitment more challenging.

Overall, Portugal’s digital nomad visa has opened new horizons for remote workers globally. However, the changing tax landscape and the challenge of balancing the needs of local and foreign residents continue to shape the country’s approach to this modern workforce. While it has been a successful first year for the Portugal digital nomad visa program, time will tell how long the program will remain. 

For those interested in the digital nomad visa, Portugal offers two types: a residency visa for an initial four months, extendable to two years, and a 12-month temporary stay visa. Eligibility criteria include being a non-EU/EEA citizen, earning a minimum monthly salary of over €3,040, having a remote work contract, and arranging accommodation in Portugal. While in their home countries, applicants must submit various documents, including proof of income, health insurance, and a criminal record certificate, via the Portuguese Ministry of Foreign Affairs Website and attend an appointment at a Portuguese consulate. The application fees are €75 for a temporary stay visa and €90 for a long-term visa. If you apply for a long-term visa after being approved for a digital nomad visa, you will also have an appointment in Portugal. At this meeting, you will need to submit the same documents you submitted to the consulate in your home country and pay a fee of €170. After this application is processed, you will receive the mail by post.

The post Portugal Takes A Lead In Granting Record-Breaking Number Of Digital Nomad Visas appeared first on Traveling Lifestyle.

The largest listed institution in Portugal is looking for engineers, mathematicians and digital marketing specialists to develop its online banking system. However, in the decade following the financial crisis, there has been a brain drain, leaving the nation devoid of youthful talent.

A coalition of the largest private enterprises in the country, Business Roundtable Portugal, estimates that about 40% of the country’s college graduates leave each year to find better employment and living opportunities elsewhere.

“It’s not just hard to recruit new employees, there’s also difficulty in retaining people,” Banco Comercial Chairman Nuno Amado said in an interview. 

The irony is that, despite its recent success in luring foreign residents to the nation, the Portuguese government’s policies may have made it more difficult to hire local workers.

Portugal unveiled the D8 visa on Oct. 30, 2022, a new visa that allows digital nomads to conduct remote work from the country.

Applicants must be remote workers earning at least four times the Portuguese minimum wage, which is about $3,350 (€3,040) per month. With this visa, remote workers can live and work in Portugal for up to one year. Alternatively, they can apply for a residence permit and stay in the country for longer.

The country’s beautiful coastline and 20% flat tax for non-habitual residents have attracted wealthy retirees and remote workers, driven up real estate costs, and deterred recent graduates from settling there. This tax incentive was recently eliminated in an effort to lower real estate prices.

Recent alterations to Portugal’s tax laws, such as the discontinuation of the Golden Visa program and the forthcoming conclusion of the non-habitual residence tax scheme, have stirred anxiety within the expat and digital nomad communities. These adjustments, initially intended to curb foreign investments and address the increasing cost of living, have unintentionally triggered an influx of affluent foreign individuals striving to capitalize on the current tax advantages before their expiration.

The post Digital Nomad Hype In Portugal Causing Youth Exodus From The Country appeared first on Traveling Lifestyle.

Portugal is an excellent place to live. The crime rate is low and the cost of living is cheap. Portugal is known not only for its gastronomy, stunning architecture, beaches and breathtaking ocean views.

The country consistently ranks first on the list of countries with the highest comfort levels. In addition, Lisbon is the most popular city for digital nomads for the third year in a row, according to Nomadlist.com.

But not only that, with the largest community of digital nomads, every week, the Meetup platform hosts in Lisbon a variety of events, including dinners, volunteer opportunities, comedy shows, open mic nights, co-working days, seminars, workshops, and panel discussions.

Closure of the Non-habitual Residence (NHR) Tax Law

Portugal’s Non-Habitual Residence (NHR) program will close to new applicants in 2024 and face modifications to its tax laws. 

This measure will end the program that grants foreigners a ten-year period of lower income tax rates in an effort to stimulate the housing market. 

According to Prime Minister Antonio Costa, the change is due to the fact that it is considered that NHR has fulfilled its function and should no longer be a factor in the increase in housing costs.

“In 2024, special taxation for non-habitual residents will end. Whoever has it will keep it,” said Costa.

Nevertheless, individuals who currently benefit from the NHR scheme will continue to enjoy their tax benefits throughout the 10-year period. This adjustment could encourage digital nomads to move to Portugal in the coming months to make the most of the current tax framework before it expires.

Portugal Digital Nomad Visa

Portugal offers a digital nomad visa that allows foreign nationals to reside there and work remotely for companies abroad. Portugal offers two types of visas for digital nomads:

• Residency visa: Initially, it permits a four-month stay, but upon arrival in Portugal, you have the option to apply for a two-year residence permit.
• Temporary stay visa: This visa grants a 12-month stay in Portugal. It’s not extendable or eligible for residency conversion, but you can renew it up to four times.

Who Can Apply for a Portugal Digital Nomad Visa?

The following conditions must be met to obtain a Digital Nomad visa in Portugal:

• Age requirement: You need to be at least 18 years old.
• Citizenship eligibility: You must be a citizen from a non-EU/EEA country.
• Monthly income prerequisite: Your monthly salary should exceed €3,040.
• Employment conditions: You must hold a remote or freelance work contract.
• Housing arrangement: You must have secured accommodation in Portugal.

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