2023-08-13 16:04:01
The tax-free nature of cryptocurrencies and the climate have attracted many to the Mediterranean country, which further drives the price of rental apartments, which have been rising for years. Hardships brought taxes and regulations. The big question for traders is whether it’s worth it to stay there? Who doesn’t want to relax on the beach sipping a glass of Portuguese wine while working at a crypto company in the Cayman Islands? You wouldn’t be the only one who would like the lineup. Over the past few years, Portugal has become a haven for those interested in Bitcoin and other cryptocurrencies. It is one of the sunniest countries in Europe and also has a good reputation for local food and drink. But more importantly, there was virtually no tax on digital currencies in the Mediterranean country until 2023. Sunny crypto tax haven In 2016, the Portuguese tax authorities passed a law stating that cryptocurrencies, as they are not currencies, do not have legal tender status in Portugal and are therefore exempt from taxation. Thanks to the law, the most burdensome income tax and VAT for individuals have been abolished, making Portugal one of the most favorable places in the world for cryptocurrency traders and investors. It’s no wonder that, as a result, hundreds of them went in that direction. Industry players and the bitcoin community began to grow rapidly. An increasing number of conferences and meetings were organized. Last year, the famous “Bitcoin family” also announced that they would permanently settle in the country. The immigration fever that has developed has been further strengthened by the “digital nomad” visa, available since October 2022, which allows telecommuters to live and work in Portugal, either temporarily or long-term. To obtain a visa, you must earn at least four times the national minimum wage per month, which is 3,040 euros. With the permit, you can travel freely within the Schengen zone and following five years you can even obtain citizenship or a residence permit. Lisbon, the new gathering place for digital nomads. Source: unsplash.com These huge benefits have lured many industry players to the sunny streets and beaches. But all this cannot be said to be a short-term phenomenon. According to the Portuguese National Institute of Statistics, the country’s foreign-born population increased by 40% between 2011 and 2021 and tourism is booming, so the warm welcome of digital nomads and crypto is just an addition to the already existing situation. Although many things are changing from this year, the party still seems to go on. The foreign demand for apartments pushes the locals out of the housing market The rush for the good life and benefits also had its downsides. The price of rental properties, the type most chosen by digital nomads, increased by 31.6% as of July 2022. According to a study by Imovirtual, renting an apartment is 91% more expensive than tenants expect, and buying an apartment is 72% more expensive. Although the country has found its place under the sun, not everyone is satisfied with such prices. The situation is complicated by the fact that the Portuguese average wage is considered low at only 1,025 euros and the minimum wage is “only” 887 euros. Development of house prices in Portugal. Source: finchannel.com Despite the fact that the country is located in the richer western half of Europe, in terms of income it is only in the middle of the EU. Accordingly, the price level would also be lower if there were no other factors driving prices up. Such factors are, for example, tourism and foreigners settling in, who have had a great impact on the country and its economy for decades. According to the Portuguese National Institute of Statistics, the country’s foreign-born population increased by 40% between 2011 and 2021. Due to tourism, short-term publishing such as Airbnb is becoming more and more popular. There are nearly 14,500 Airbnb guest accommodations in Lisbon alone. These apartments are completely out of the local offer. In Lisbon, there have already been demonstrations of several thousand people, even following the government’s housing crisis relief package and despite local initiatives. Portugal is still worth settling in Despite the tax changes in effect that effectively end the country’s era as a crypto tax haven, the country continues to attract crypto-native visitors and settlers. Mercado Bitcoin Portugal (formerly Criptoloja), the country’s first crypto exchange, was the first company to receive a license to operate as a crypto exchange. Pedro Borges, the company’s CEO, told BeInCrypto that the Portuguese government was open to things during and following the changes and that the state’s basic attitude was generally positive. However, this does not mean that there are no problems. For Mercado Bitcoin and others like it, the country’s diligence and speed also come with disadvantages. Pedro Borges said the following regarding the regulations: “The regulations do not move as fast in other countries as in our country. These rules force us to face unfair competition as we see platforms, which are not regulated, offer a variety of services, including cryptocurrency derivatives, margin accounts and the creation of new tokens. They do all of this by not following the rules that we are required to follow. This puts us in direct competition with those who do not follow the rules and who can offer their services here in Portugal. This is the main challenge! In other words, we have solid regulations, but we’re competing in an open market with those who don’t follow the same rules.” Several people agreed with the observation. For example, Tim Haldorsson, who heads the Web3 marketing agency of Swedish origin, moved to Portugal four and a half years ago. According to him, he can work in a much more inclusive environment, but there are shortcomings, especially in the field of compliance. Anyway, Haldorsson revealed that he moved there because he might be in one of the hubs of crypto and Web3, Lisbon, and all in good weather conditions. What really made him stay was the local Web3 community, conferences, meetings and the crypto-friendly mentality itself. Surfing, sunbathing and quality life – the experiences of a Bitcoinist Joe Hall, Bitcoinist and CoinTelegraph journalist, moved to Portugal this year. Many of his industry acquaintances have moved to the country and he is contacted weekly by people who are interested in moving. Hall, who has lived in 13 countries for longer periods of time, said Portugal is much more bitcoin-friendly than the UK or France. However, this was largely due to the fact that the regulators were not sure of their work, so they left the local sector free to mature. For Hall, the quality of life, the possibility of daily surfing and the thriving bitcoin community were the attractions that led him to relocate. For him, the digital nomad visa is just icing on the cake. But he also noted that he, too, found certain parts of what was flowing into the country frustrating. “I love Portugal, the people and the laid-back way of life, but if you’re considering moving here, please leave your shitcoins at home. During the last bull run, he and his dog were selling their kitschy NFT collection and literal shitcoins, while crypto meetups dotted Lisbon’s high streets. To that I say ‘Não obrigado’, which means ‘no thanks,'” Hall noted. Alongside the passionate Bitcoin and altcoinists settling in, local families are struggling to make ends meet as Portuguese real estate prices rise 157% between 2020 and 2021. rose with Only in July 2023 did sublet rents increase by 3.8%, which indicates that the price increase does not seem to be slowing down. The question arises: how long will the Portuguese housing prices be affordable for digital nomads and cryptos?
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