Foreigners take advantage of the pandemic to invest in Portugal

  • Home >
  • News >
  • Foreigners take advantage of the pandemic to invest in Portugal

Foreigners take advantage of the pandemic to invest in Portugal
Reading time: 3 minutes
Published: 31st May 2021, 5:40pm
Updated: 31st May 2021, 6:19pm

Entry of capital into companies and purchase of real estate has brought Foreign Direct Investments to the top in 2020 and in the beginning of 2021

Foreign direct investment (FDI) in property purchases and shareholdings in companies increased almost eight times in the first quarter of this year compared to the same period in 2020, according to calculations by Dinheiro Vivo based on data from Banco de Portugal. In other words, in this first quarter alone, overseas investors have injected €1.7 billion into the Portuguese economy. This is the strongest annual start-up since 2017, the year in which Portugal grew by 3.5% in real terms (the best mark since 2000).

This strong impulse of FDI through shares and other corporate holdings is closely linked to the phenomenon of real estate investment. According to several analysts and Banco de Portugal itself, the beginning of this year prolongs the good year of 2020 in this sector. In fact, last year, despite the pandemic crisis, foreign investors put €5.9 billion into the economy, a figure that is in line with the €6 billion recorded in 2019.  €647 million were injected into the country only through the Portugal Golden Visa programme.


Read also:


The final FDI figure is just not bigger because investors started selling debt - it may be through operations to sell non-performing assets and non-performing loan portfolios, the so-called nonperforming loans. These sales are deducted from the total FDI value. In the first quarter, these sales amounted to a significant amount of €910 million. In 2020 as a whole, foreign investors also emptied their positions, selling debt worth almost €3 billion!

According to Banco de Portugal, last year, the external financing of the Portuguese private sector continued to be channelled through the net flow of foreign direct investment, equivalent to 1.8% of GDP (domestic product gross). Also, the real estate investment component remained relevant, corresponding to 26% of the inflow of funds through foreign direct investment.

Banco de Portugal explains that investment in construction increased 4.7% (7.2% in 2019), and in addition to the containment measures not imposing the suspension of construction works, the dynamism of construction is explained by the flow of new projects, particularly in residential real estate and major infrastructure constructions.


Read also:


What’s more, Banco BPI studies also noted that “in the storm caused by the pandemic in 2020, the residential market faltered, but did not break”. This only means that investing in real estate is one of the safest investment options one can make. Learn more about the advantages here.

In addition to the fact economic activity is coming back to normality, it is expected that the funds that Portugal will receive through the Recovery and Resilience Plan and the identification by the European Union of the renovation of buildings as one of the priorities for the ecological transition will boost the residential market, starting in 2022. Initially through the dynamization of residential construction, but later through the appreciation of the housing stock, according to the same study by the banking group.

19th January 2018
Did you know that Lisbon, although it is called the seven hill city, it…

Buying Property in Portugal

Portugal Homes has very experienced and knowledgeable professionals working with some of the most established and reputable developers Portugal has to offer. Our vast experience allows us to guide you through the best investment choices.

Whether you want a holiday home or an investment property, we select the best units for your profile and take care of all the process from start to finish. Even after the sale! Our After Sales services assume the responsibility of furnishing your property at your taste, taking care of the property in your absence, managing the rentals if you wish to rent your property when you’re not in Portugal and so much more!

To learn more about the Portuguese Non-Habitual Resident Program and our After Sales services, please fill the form below.

It's fantastic how Ryan had complete knowledge regarding Lisbon and dealt with us in a great manner.

Akbar Ali - Investor from Pakistan

Ryan is very professional, but also friendly and knowledgeable about the Golden Visa market. He was also flexible as travelled from the Algarve to meet me in Lisbon to stand in for 1 colleague at short notice.

Investor from UK

Portugal Homes did a great job keeping me up to date with progress on my new home construction purchase by providing regular and comprehensive reports. This helped to ease anxieties about doing a home purchase in the midst of a global pandemic.

Investor from the USA

Although through Zoom, we established great confidence in George's integrity. [It was] important for us to have confidence in the staff's ability to feel aligned in views.

Donald Collie from Australia

The process was very quick and clear. I got all the information I needed in the first hour. The experience was perfect.

Tomoko Inoue from Japan

Overwhelming. Luisa has exceeded our expectations on all levels. Trust was established immediately. Enhanced by super friendly professionalism. The networks to banks, accountants, lawyers was seamless. there is not enough space here to write all the positives, enough to say we are making an offer and we only arrived 4 days ago. Its impossible to improve from perfection!

John Mulroe and Wiebke Bock