8 ms·

Portugal brings back tax breaks for foreigners in bid to woo digital nomads

77 points by WWWMMMWWW 2y ago

A_D_E_P_T 2y ago
https://archive.ph/NleMx https://archive.ph/NleMx How does this make any sense in light of Lisbon being now "one of the world’s most unlivable cities"? Seems like it can't possibly be good for the native Portugese. https://blogs.mediapart.fr/jacobin/blog/040922/real-estate-speculation-has-made-lisbon-one-world-s-most-unlivable-cities https://blogs.mediapart.fr/jacobin/blog/040922/real-estate-s...
- ed_balls 2y ago
  Digital nomads don't have to live in Lisbon. Besides, housing supply issues will be solved in 10 years - baby boomers dying.
  - weregiraffe 2y ago
    >, housing supply issues will be solved in 10 years - baby boomers dying. Dying baby boomers will spend their wealth in retirement (on pleasure and healthcare), and it will end up in the hands of large financial institutions, not the next generation. Do you think this will solve housing supply issues?
    - ed_balls 2y ago
      yes, you cannot sell a house and move it to a tax heaven.
- JamesLefrere 2y ago
  Of course it doesn’t benefit the Portuguese. That’s not how Portugal is governed. It’s cynical, but that’s really how it is; learned helplessness on a national scale.
  - dantyti 2y ago
    nomads pay taxes, then they leave – Portugal gets extra money to provide social services and does not need to care for those nomads when they hit retirement – saving the state money in the future
    - deleted 2y ago
      [deleted]
- Gimpei 2y ago
  Economic stagnation and population decline is bad too. Highly skilled immigrants are especially good for the economy and for the tax base, which pays for social services. Rising housing costs are indeed a problem. Is there a part of town that can accommodate sky-scrapers?
  - Rinzler89 2y ago
    >Highly skilled immigrants are especially good for the economy and for the tax base, which pays for social services. Except they're getting tax breaks, it's in the title of the article. The only winners from this will be landlords and property owners. This bullshit trickle down from well-off tourists with laptops we keep getting parroted is a scam, that doesn't benefit the average joe there who now has to deal with even more expensive housing. Why do you think all countries whose economies profit the most from tourists and "digital nomads" (most of Southern Europe), also have the highest wealth inequality, crappiest wages and most unaffordable housing for the locals causing all their youth to emigrate? Where are all those benefits for them you keep talking about? Their economies should be booming by now, and yet they aren't. If you wanna improve your economy you want to attract companies and investors who fund companies and create well paying jobs in the country for the locals, not techbros who can outspend the locals, as that's just economic colonialism that only benefits the asset owning class. Turning your country into a coworking space for remote workers to party, won't fix your economy or benefit the average locals.
    - Radim 2y ago
      Whether foreigners are income-taxed at 20% or 48% cannot be the answer¹. Clearly Portugal's problems are much deeper than that, going back to 1974 and beyond. To name one, Portugal's bureaucracy is legendary. The Portuguese are not called "Honorary East Europeans" for nothing. The red tape creates a complex system of inefficiency and corruption. It's like a cauldron – you (the government) plug one obvious hole, only to find the pressure found another, "unexpectedly". And yes, young people run away in droves from Portugal, leaving entire industries back home chronically understaffed. Construction & health being two prominent examples that need foreigners to keep the lights on. This shortage of labour drives commercial prices up higher still, contributing to the death spiral. ¹ Leaving aside that both numbers are high to begin with; 48% ridiculously so (for anyone above €82k/year). That's no way to treat your productive population. And that's just income; there's additional health and social taxes, some masquarading as "insurance" or "employer contribution". Would you blame the young for leaving?
- tardy_one 2y ago
  It doesn't look like it is for digital nomads to me.. More like competing for Polish doctors to have doctors in these cities.
  - JamesLefrere 2y ago
    Salary requirements negate that, plus the Portuguese health system pays rock-bottom salaries itself, and is already on its knees.
    - tardy_one 2y ago
      Perhaps I left out "trying to".. But really it means they have to raise their salaries for all doctors less to bring their compensation for hiring in new foreign doctors up to an acceptable level for some nation's expat doctors.
- ttoinou 2y ago
  There are far more tourists than DN and expats.
- abofh 2y ago
  It doesn't directly, on net though, the average tech nomad is coming in with a salary that's 4-5x the average domestic worker, so that 20% goes a lot farther. Add to that nomads are far more likely to need to buy crap (26% vat), and best of all, leave once full freight taxes hit avoiding any long term dependence on the state. Sucks for housing prices, but it's not a giveaway that it often gets suggested as.
  - JetSpiegel 2y ago
    Yes, if the tax rate was 0, all Americans would move to Portugal. It's only economically efficent.
- fhe 2y ago
  a few months ago, Japan, in trying to attract more digital nomads, introduced a digtal nomad visa[1]. [1] Japan Introduces New Visa for Digital Nomads https://www.japan.travel/en/ca/news/digital-nomad-visa/ https://www.japan.travel/en/ca/news/digital-nomad-visa/
  - wetpaws 2y ago
    [dead]
  - ghaff 2y ago
    I don’t really get the rationale. You’re effectively pursuing longer term tourists who are cheaper in spending habits on average and presumably want non-hotel housing. Maybe that’s a win in Tokyo but it’s not obvious to me why.
    - dantyti 2y ago
      I guess it’s about having some short-term tax revenue from younger foreigners to help the state deal with an aging population. Since nomads eventually move away, the state does not include them in any pension system.
      - ghaff 2y ago
        I guess although I believe a tourist visa for the US and some other countries is 90 days so I assume the incentive is to fly under the radar for that period (eg no coworking space) and then go somewhere else.
- ignoreusernames 2y ago
  This is a fair argument that's often brought up but I never see actual raw data backing it up. Housing is fucked in several places around the world, including a bunch of countries in Europe that don't have any tax breaks for specialized labor. I would love to look at some metrics like - How many units of housing are built each year - How many units are rented and to what demography (Portuguese families, immigrants sharing rooms, students, etc) - How many migrants (legal and ilegal) - How many specialized migrants each year and the % of them that eventually buy a home - How many units are bought up by funds and other financial entities - How much taxes and social security contributions are collected per year for specialized migrants and how that money is reinvested - etc I known that's basically impossible to have an accurate picture since those numbers are way too "politically loaded". Politics and facts don't mix very well so we just default to who yells the loudest (specially true in Portugal, unfortunately) EDIT: Format bullet points
hugodan 2y ago
“The country’s Prime Minister Joaquim Miranda Sarmento” he is not the prime minister. That’s Luis Montenegro. Sarmento is the economy/finance minister.
- jeanlucas 2y ago
  Hard to trust news when they get things like that wrong.
uxhacker 2y ago
Wich other countries are offering low taxes to digital nomads?
- pelorat 2y ago
  The Netherlands have/had a tax-break for all expats, but it's going away (has gone away?) now. Sadly even centrists are conservative now and destroying the country in the name of, what... preserving culture? Examples: Attempts to limit the number of tourists. Limiting number of flights from Schiphol. A ban on building new hotels. Removal of the expat tax-break. Limiting the number of foreign student in the universities. Mandating that less university classes are thaught in English and the list goes on and on. I mean who in their right mind would say yes to more skilled labor and cash inflow into the local economy. Surely no-one! :rolls-eyes:
  - anonzzzies 2y ago
    Well, all the populist comments here above (but definitely on reddit) where people make you believe everything is going to shit (I am Dutch and live in PT) seem to stir to pot enough to take populist (read: not working or possible even short term, but definitely not long term) decisions. NL shouldn't, nor should PT; the populist are a minority and the people who shout loud with the same 'ideas', don't 'want the tourists/foreigners/expats out'; they want more equality. That's fine, let's talk about that.
  - mhogers 2y ago
    The housing crisis in The Netherlands complicates the topic in my opinion. The influx of expats should be tied closer to the available housing supply.
- sazor 2y ago
  Spain has special tax regime applicable to high qualified workers (in any region) and nomads (in some regions currently) who haven’t been tax resident in Spain for last 5 years (ie relocated recently). It’s 24% flat (under 600k per year) IRPF tax for 5 years. Also, capital gains outside of Spain sourced income are not taxed in Spain. Social security contributions are paid in full same as usual tax residents. Tax treaty doesn’t apply for such tax residents though and it complicates taxes in general.
gcanyon 2y ago
Portugal isn't (just) Lisbon. I'd be curious to know what the situation is in Porto, Lagos, and other areas further out. If I were a digital nomad I'd probably be living there now, but in Nazaré, or maybe Coimbra or Faro.
- 4ad 2y ago
  Why?
  - ck45 2y ago
    Rental prices. My first source says: The average price for an apartment in Lisbon is 21€ per square meter, in Coimbra it's 12€ per square meter See also (the numbers differ a bit, but similar ball park) https://www.statista.com/statistics/1416178/portugal-rental-square-meter-price-by-region/ https://www.statista.com/statistics/1416178/portugal-rental-... OTOH there are reasons for the higher price (beyond hype). Lisbon feels more like a big city than Coimbra.
    - 4ad 2y ago
      If all you care about are rental prices why don't you go to some cheap Asian/African country? Or hell, Siberia?
      - ghaff 2y ago
        Not that I know Portugal well but smaller cities have attractions in many countries. In SE Asia the big cities would have zero attractions to me—not that multi-months of living elsewhere interests me at all.
      - ck45 2y ago
        The article is about tax breaks in Portugal, the comment was that Portugal is not only Lisbon. I don't think Asian or African countries or Siberia qualify as Portugal. If one wants to move to Portugal, then they could consider other cities than Lisbon as an alternative because the real estate market in Lisbon is quite intense.
thiagoperes 2y ago
What I see in comment sections of articles like this is a perfect example of why EU is set to lose in the coming decades: mindset. I’d say most Americans understand the value of highly skilled migration. It’s how America stays #1, it’s how they have the best companies, and bring the most value to their nation. Meanwhile in EU, any move to attract talent is seen as net-negative, unfair and detrimental to the culture and livability. Their negativity is a self fulfilling prophecy, but it will be a very costly and hard pill to swallow, just like the UK is seeing after Brexit.
- rr808 2y ago
  No I think most countries value high skilled migrants. In most countries its the only way you can migrate. The difference is whether they should get tax breaks. In fact the USA is probably the hardest country in the world to work as a digital nomad - you can only work legally here if an employer sponsors you. And you definitely wont get a tax break.
- diggan 2y ago
  > It’s how America stays #1, it’s how they have the best companies, and bring the most value to their nation. As always, it's relative. Granted, I'm one of these loser EU residents who has a different mindset, that chasing #1 position in terms of GDP generated per resident isn't the be all end all. Instead, people's happiness is on the top of my mind, and taking care of as many people as possible. And with that mindset, the US is very far from the top, and there are so many countries that are better for "living", but maybe not the best if your entire life revolves around finding the best place for "working". We all have different focuses in life, and that's OK. But to say that some places are "better" on a absolute scale feels like a mindtrap if anything.
  - alephnerd 2y ago
    > I'm one of these loser EU residents who has a different mindset, that chasing #1 position in terms of GDP generated per resident isn't the be all end all. Instead, people's happiness is on the top of my mind, and taking care of as many people as possible. It's not an all or nothing dichotomy. Social services get dramatically more expensive if you don't have as robust a local economy. All governments borrow money and need to service debts in order to pay for their social safety net, and that's much more expensive now due to higher interest rates and economic convergence. And it's not like Eastern European EU member states are poor chumps anymore - they're fairly business friendly and some like Czechia have already caught up to Western European (Italy/France) level living standards. This means you can't play wage arbitrage anymore by getting an underpaid janitor or nurse from Croatia or Poland to work at your local hospital like you could 10 years ago.
derriz 2y ago
I dislike these policies (despite benefiting from the Dutch equivalent for a short time). Why should existing tax payers effectively subsidise lower taxes for new arrivals? Both receive the same state benefits and both earn the same income. Also, I'm not sure they're actually effective overall. For every tax break you give to a new arrival earning say over 100k, there's surely an existing resident earning the equivalent whom you are effectively encouraging to leave with such a discriminatory policy. And indeed, according to headlines like this "As Digital Nomads Flock to Lisbon, Portugal’s Youth Are Leaving in Droves"[1], it seems to be playing out this way. Like the annoying business practice of offering steep discounts for new customers, it relies on the inertia of your existing customer base (in this case citizens). The problem is that the "digital nomads" you are trying to attract are the least "sticky" type of resident (after tourists) and are far less likely to fully engage is civil society and contribute at that level (often never bothering to even speak the local language). While if you drive one of your own citizens to relocated in another EU country, the net loss is greater. Having lived and worked in Dublin for a long period, I was interested when a Dutch-style seven year rule was proposed by the government a few years ago. There was immediate, widespread vocal opposition and the proposal was dropped quickly. [1] https://www.bloomberg.com/news/features/2023-10-28/companies-wanting-numeracy-tech-hires-struggle-to-fill-jobs-in-lisbon-portugal?embedded-checkout=true https://www.bloomberg.com/news/features/2023-10-28/companies...
- sgift 2y ago
  While I agree with your comment I'd like to point out that the reason the youth is leaving is not this policy, but that there are no jobs for them. At least none that you really want to live on. That's a problem "digital nomads" are expected to not have: They have their job somewhere else, so who cares if the local job market is garbage? Though I don't think this will work out in the long term.
- gizmo 2y ago
  Digital nomads don’t settle but other digital nomads will take their place if the country has enough on offer. When a city is able to attract educated, intelligent and motivated people through a simple tax policy change you can expect all sorts of positive downstream externalities. Ambitious people don’t want to live in dying cities. Anything that stops brain drain is good. Whatever politicians can do to attract talent is going to be net positive, even when that means tax cuts for digital nomads who don’t employ anybody and who have no loyalty to their host country.
devuo 2y ago
First, Joaquim Miranda Sarmento is not the Portuguese Prime Minister, but the Minister of Finance. Second, the tax breaks were removed at the end of last year because of a widespread feeling in the general populace that these were deeply unfair policies that were understood at the root cause of gentrification and unreasonable real estate valuations. The median house price in Lisbon and Porto metro areas, are now above what the p95 Portuguese salary can pay. So yes, speculation and wealthy foreigners are an issue, as it's not Portuguese salaries propping these values. Third, the party in power does not have a majority in parliament. This means they'll need support from other parties to approve this deeply divise tax break. While I'm sure they'll get the support from the Liberal party, I'm seriously doubtful they'll get it from the other parties. It's also quite likely that we'll have new elections in the next 12 months and the party in power, despite many populistic policies in the last 4 months since they won by a few thousand votes the election, has not yet been able to gain a wider trust from the voters since then. I doubt this tax break will see the light of day anytime soon. Fourth and finally, there has been zero talks about this in Portuguese media. I feel this is more of a politician talking out of his ass without double/triple checking with the prime minister.
- voisin 2y ago
  > The median house price in Lisbon and Porto metro areas, are now above what the p95 Portuguese salary can pay. So yes, speculation and wealthy foreigners are an issue, as it's not Portuguese salaries propping these values. The second sentence doesn’t necessarily flow from the first. The same is true in major cities in Canada, New Zealand, England, etc etc, and this has little to do with foreign visitors and much to do with interest rates and availability and quantum of credit.
  - lazide 2y ago
    Uh, all of the locales you mention have been targets of huge foreign investment and ‘rich person’ immigration in the last decade.
    - voisin 2y ago
DrBazza 2y ago
Persuading 'digital nomads' with established businesses isn't the same as encouraging and promoting home grown Portuguese businesses. Also non-English speaking countries that set up an internet-based business are at an immediate disadvantage to the US and UK, unless their business is English-first. The US immediately has a market of 300m. The UK, 70m. The enough-English-to-get-by speaking 'West' / Europe is about 350m (of 700m) people. So, 700m Western English speakers in 'first world' economies.
deleted 2y ago
[deleted]
ChrisArchitect 2y ago
Related: Portugal to reintroduce tax breaks for skilled foreigners https://news.ycombinator.com/item?id=40894527 https://news.ycombinator.com/item?id=40894527

77 points by WWWMMMWWW 2y ago

https://archive.ph/NleMx https://archive.ph/NleMx How does this make any sense in light of Lisbon being now "one of the world’s most unlivable cities"? Seems like it can't possibly be good for the native Portugese. https://blogs.mediapart.fr/jacobin/blog/040922/real-estate-speculation-has-made-lisbon-one-world-s-most-unlivable-cities https://blogs.mediapart.fr/jacobin/blog/040922/real-estate-s...

ed_balls 2y ago
Digital nomads don't have to live in Lisbon. Besides, housing supply issues will be solved in 10 years - baby boomers dying.
- weregiraffe 2y ago
  >, housing supply issues will be solved in 10 years - baby boomers dying. Dying baby boomers will spend their wealth in retirement (on pleasure and healthcare), and it will end up in the hands of large financial institutions, not the next generation. Do you think this will solve housing supply issues?
  - ed_balls 2y ago
    yes, you cannot sell a house and move it to a tax heaven.
JamesLefrere 2y ago
Of course it doesn’t benefit the Portuguese. That’s not how Portugal is governed. It’s cynical, but that’s really how it is; learned helplessness on a national scale.
- dantyti 2y ago
  nomads pay taxes, then they leave – Portugal gets extra money to provide social services and does not need to care for those nomads when they hit retirement – saving the state money in the future
  - deleted 2y ago
    [deleted]
Gimpei 2y ago
Economic stagnation and population decline is bad too. Highly skilled immigrants are especially good for the economy and for the tax base, which pays for social services. Rising housing costs are indeed a problem. Is there a part of town that can accommodate sky-scrapers?
- Rinzler89 2y ago
  >Highly skilled immigrants are especially good for the economy and for the tax base, which pays for social services. Except they're getting tax breaks, it's in the title of the article. The only winners from this will be landlords and property owners. This bullshit trickle down from well-off tourists with laptops we keep getting parroted is a scam, that doesn't benefit the average joe there who now has to deal with even more expensive housing. Why do you think all countries whose economies profit the most from tourists and "digital nomads" (most of Southern Europe), also have the highest wealth inequality, crappiest wages and most unaffordable housing for the locals causing all their youth to emigrate? Where are all those benefits for them you keep talking about? Their economies should be booming by now, and yet they aren't. If you wanna improve your economy you want to attract companies and investors who fund companies and create well paying jobs in the country for the locals, not techbros who can outspend the locals, as that's just economic colonialism that only benefits the asset owning class. Turning your country into a coworking space for remote workers to party, won't fix your economy or benefit the average locals.
  - Radim 2y ago
    Whether foreigners are income-taxed at 20% or 48% cannot be the answer¹. Clearly Portugal's problems are much deeper than that, going back to 1974 and beyond. To name one, Portugal's bureaucracy is legendary. The Portuguese are not called "Honorary East Europeans" for nothing. The red tape creates a complex system of inefficiency and corruption. It's like a cauldron – you (the government) plug one obvious hole, only to find the pressure found another, "unexpectedly". And yes, young people run away in droves from Portugal, leaving entire industries back home chronically understaffed. Construction & health being two prominent examples that need foreigners to keep the lights on. This shortage of labour drives commercial prices up higher still, contributing to the death spiral. ¹ Leaving aside that both numbers are high to begin with; 48% ridiculously so (for anyone above €82k/year). That's no way to treat your productive population. And that's just income; there's additional health and social taxes, some masquarading as "insurance" or "employer contribution". Would you blame the young for leaving?
tardy_one 2y ago
It doesn't look like it is for digital nomads to me.. More like competing for Polish doctors to have doctors in these cities.
- JamesLefrere 2y ago
  Salary requirements negate that, plus the Portuguese health system pays rock-bottom salaries itself, and is already on its knees.
  - tardy_one 2y ago
    Perhaps I left out "trying to".. But really it means they have to raise their salaries for all doctors less to bring their compensation for hiring in new foreign doctors up to an acceptable level for some nation's expat doctors.
ttoinou 2y ago
There are far more tourists than DN and expats.
abofh 2y ago
It doesn't directly, on net though, the average tech nomad is coming in with a salary that's 4-5x the average domestic worker, so that 20% goes a lot farther. Add to that nomads are far more likely to need to buy crap (26% vat), and best of all, leave once full freight taxes hit avoiding any long term dependence on the state. Sucks for housing prices, but it's not a giveaway that it often gets suggested as.
- JetSpiegel 2y ago
  Yes, if the tax rate was 0, all Americans would move to Portugal. It's only economically efficent.
fhe 2y ago
a few months ago, Japan, in trying to attract more digital nomads, introduced a digtal nomad visa[1]. [1] Japan Introduces New Visa for Digital Nomads https://www.japan.travel/en/ca/news/digital-nomad-visa/ https://www.japan.travel/en/ca/news/digital-nomad-visa/
- wetpaws 2y ago
  [dead]
- ghaff 2y ago
  I don’t really get the rationale. You’re effectively pursuing longer term tourists who are cheaper in spending habits on average and presumably want non-hotel housing. Maybe that’s a win in Tokyo but it’s not obvious to me why.
  - dantyti 2y ago
    I guess it’s about having some short-term tax revenue from younger foreigners to help the state deal with an aging population. Since nomads eventually move away, the state does not include them in any pension system.
    - ghaff 2y ago
      I guess although I believe a tourist visa for the US and some other countries is 90 days so I assume the incentive is to fly under the radar for that period (eg no coworking space) and then go somewhere else.
ignoreusernames 2y ago
This is a fair argument that's often brought up but I never see actual raw data backing it up. Housing is fucked in several places around the world, including a bunch of countries in Europe that don't have any tax breaks for specialized labor. I would love to look at some metrics like - How many units of housing are built each year - How many units are rented and to what demography (Portuguese families, immigrants sharing rooms, students, etc) - How many migrants (legal and ilegal) - How many specialized migrants each year and the % of them that eventually buy a home - How many units are bought up by funds and other financial entities - How much taxes and social security contributions are collected per year for specialized migrants and how that money is reinvested - etc I known that's basically impossible to have an accurate picture since those numbers are way too "politically loaded". Politics and facts don't mix very well so we just default to who yells the loudest (specially true in Portugal, unfortunately) EDIT: Format bullet points

hugodan 2y ago

“The country’s Prime Minister Joaquim Miranda Sarmento” he is not the prime minister. That’s Luis Montenegro. Sarmento is the economy/finance minister.

jeanlucas 2y ago
Hard to trust news when they get things like that wrong.

uxhacker 2y ago

Wich other countries are offering low taxes to digital nomads?

pelorat 2y ago
The Netherlands have/had a tax-break for all expats, but it's going away (has gone away?) now. Sadly even centrists are conservative now and destroying the country in the name of, what... preserving culture? Examples: Attempts to limit the number of tourists. Limiting number of flights from Schiphol. A ban on building new hotels. Removal of the expat tax-break. Limiting the number of foreign student in the universities. Mandating that less university classes are thaught in English and the list goes on and on. I mean who in their right mind would say yes to more skilled labor and cash inflow into the local economy. Surely no-one! :rolls-eyes:
- anonzzzies 2y ago
  Well, all the populist comments here above (but definitely on reddit) where people make you believe everything is going to shit (I am Dutch and live in PT) seem to stir to pot enough to take populist (read: not working or possible even short term, but definitely not long term) decisions. NL shouldn't, nor should PT; the populist are a minority and the people who shout loud with the same 'ideas', don't 'want the tourists/foreigners/expats out'; they want more equality. That's fine, let's talk about that.
- mhogers 2y ago
  The housing crisis in The Netherlands complicates the topic in my opinion. The influx of expats should be tied closer to the available housing supply.
sazor 2y ago
Spain has special tax regime applicable to high qualified workers (in any region) and nomads (in some regions currently) who haven’t been tax resident in Spain for last 5 years (ie relocated recently). It’s 24% flat (under 600k per year) IRPF tax for 5 years. Also, capital gains outside of Spain sourced income are not taxed in Spain. Social security contributions are paid in full same as usual tax residents. Tax treaty doesn’t apply for such tax residents though and it complicates taxes in general.

gcanyon 2y ago

Portugal isn't (just) Lisbon. I'd be curious to know what the situation is in Porto, Lagos, and other areas further out. If I were a digital nomad I'd probably be living there now, but in Nazaré, or maybe Coimbra or Faro.

4ad 2y ago
Why?
- ck45 2y ago
  Rental prices. My first source says: The average price for an apartment in Lisbon is 21€ per square meter, in Coimbra it's 12€ per square meter See also (the numbers differ a bit, but similar ball park) https://www.statista.com/statistics/1416178/portugal-rental-square-meter-price-by-region/ https://www.statista.com/statistics/1416178/portugal-rental-... OTOH there are reasons for the higher price (beyond hype). Lisbon feels more like a big city than Coimbra.
  - 4ad 2y ago
    If all you care about are rental prices why don't you go to some cheap Asian/African country? Or hell, Siberia?
    - ghaff 2y ago
      Not that I know Portugal well but smaller cities have attractions in many countries. In SE Asia the big cities would have zero attractions to me—not that multi-months of living elsewhere interests me at all.
    - ck45 2y ago
      The article is about tax breaks in Portugal, the comment was that Portugal is not only Lisbon. I don't think Asian or African countries or Siberia qualify as Portugal. If one wants to move to Portugal, then they could consider other cities than Lisbon as an alternative because the real estate market in Lisbon is quite intense.

thiagoperes 2y ago

What I see in comment sections of articles like this is a perfect example of why EU is set to lose in the coming decades: mindset. I’d say most Americans understand the value of highly skilled migration. It’s how America stays #1, it’s how they have the best companies, and bring the most value to their nation. Meanwhile in EU, any move to attract talent is seen as net-negative, unfair and detrimental to the culture and livability. Their negativity is a self fulfilling prophecy, but it will be a very costly and hard pill to swallow, just like the UK is seeing after Brexit.

rr808 2y ago
No I think most countries value high skilled migrants. In most countries its the only way you can migrate. The difference is whether they should get tax breaks. In fact the USA is probably the hardest country in the world to work as a digital nomad - you can only work legally here if an employer sponsors you. And you definitely wont get a tax break.
diggan 2y ago
> It’s how America stays #1, it’s how they have the best companies, and bring the most value to their nation. As always, it's relative. Granted, I'm one of these loser EU residents who has a different mindset, that chasing #1 position in terms of GDP generated per resident isn't the be all end all. Instead, people's happiness is on the top of my mind, and taking care of as many people as possible. And with that mindset, the US is very far from the top, and there are so many countries that are better for "living", but maybe not the best if your entire life revolves around finding the best place for "working". We all have different focuses in life, and that's OK. But to say that some places are "better" on a absolute scale feels like a mindtrap if anything.
- alephnerd 2y ago
  > I'm one of these loser EU residents who has a different mindset, that chasing #1 position in terms of GDP generated per resident isn't the be all end all. Instead, people's happiness is on the top of my mind, and taking care of as many people as possible. It's not an all or nothing dichotomy. Social services get dramatically more expensive if you don't have as robust a local economy. All governments borrow money and need to service debts in order to pay for their social safety net, and that's much more expensive now due to higher interest rates and economic convergence. And it's not like Eastern European EU member states are poor chumps anymore - they're fairly business friendly and some like Czechia have already caught up to Western European (Italy/France) level living standards. This means you can't play wage arbitrage anymore by getting an underpaid janitor or nurse from Croatia or Poland to work at your local hospital like you could 10 years ago.

derriz 2y ago

I dislike these policies (despite benefiting from the Dutch equivalent for a short time). Why should existing tax payers effectively subsidise lower taxes for new arrivals? Both receive the same state benefits and both earn the same income. Also, I'm not sure they're actually effective overall. For every tax break you give to a new arrival earning say over 100k, there's surely an existing resident earning the equivalent whom you are effectively encouraging to leave with such a discriminatory policy. And indeed, according to headlines like this "As Digital Nomads Flock to Lisbon, Portugal’s Youth Are Leaving in Droves"[1], it seems to be playing out this way. Like the annoying business practice of offering steep discounts for new customers, it relies on the inertia of your existing customer base (in this case citizens). The problem is that the "digital nomads" you are trying to attract are the least "sticky" type of resident (after tourists) and are far less likely to fully engage is civil society and contribute at that level (often never bothering to even speak the local language). While if you drive one of your own citizens to relocated in another EU country, the net loss is greater. Having lived and worked in Dublin for a long period, I was interested when a Dutch-style seven year rule was proposed by the government a few years ago. There was immediate, widespread vocal opposition and the proposal was dropped quickly. [1] https://www.bloomberg.com/news/features/2023-10-28/companies-wanting-numeracy-tech-hires-struggle-to-fill-jobs-in-lisbon-portugal?embedded-checkout=true https://www.bloomberg.com/news/features/2023-10-28/companies...

sgift 2y ago
While I agree with your comment I'd like to point out that the reason the youth is leaving is not this policy, but that there are no jobs for them. At least none that you really want to live on. That's a problem "digital nomads" are expected to not have: They have their job somewhere else, so who cares if the local job market is garbage? Though I don't think this will work out in the long term.
gizmo 2y ago
Digital nomads don’t settle but other digital nomads will take their place if the country has enough on offer. When a city is able to attract educated, intelligent and motivated people through a simple tax policy change you can expect all sorts of positive downstream externalities. Ambitious people don’t want to live in dying cities. Anything that stops brain drain is good. Whatever politicians can do to attract talent is going to be net positive, even when that means tax cuts for digital nomads who don’t employ anybody and who have no loyalty to their host country.

devuo 2y ago

First, Joaquim Miranda Sarmento is not the Portuguese Prime Minister, but the Minister of Finance. Second, the tax breaks were removed at the end of last year because of a widespread feeling in the general populace that these were deeply unfair policies that were understood at the root cause of gentrification and unreasonable real estate valuations. The median house price in Lisbon and Porto metro areas, are now above what the p95 Portuguese salary can pay. So yes, speculation and wealthy foreigners are an issue, as it's not Portuguese salaries propping these values. Third, the party in power does not have a majority in parliament. This means they'll need support from other parties to approve this deeply divise tax break. While I'm sure they'll get the support from the Liberal party, I'm seriously doubtful they'll get it from the other parties. It's also quite likely that we'll have new elections in the next 12 months and the party in power, despite many populistic policies in the last 4 months since they won by a few thousand votes the election, has not yet been able to gain a wider trust from the voters since then. I doubt this tax break will see the light of day anytime soon. Fourth and finally, there has been zero talks about this in Portuguese media. I feel this is more of a politician talking out of his ass without double/triple checking with the prime minister.

voisin 2y ago
> The median house price in Lisbon and Porto metro areas, are now above what the p95 Portuguese salary can pay. So yes, speculation and wealthy foreigners are an issue, as it's not Portuguese salaries propping these values. The second sentence doesn’t necessarily flow from the first. The same is true in major cities in Canada, New Zealand, England, etc etc, and this has little to do with foreign visitors and much to do with interest rates and availability and quantum of credit.
- lazide 2y ago
  Uh, all of the locales you mention have been targets of huge foreign investment and ‘rich person’ immigration in the last decade.
  - voisin 2y ago

DrBazza 2y ago

Persuading 'digital nomads' with established businesses isn't the same as encouraging and promoting home grown Portuguese businesses. Also non-English speaking countries that set up an internet-based business are at an immediate disadvantage to the US and UK, unless their business is English-first. The US immediately has a market of 300m. The UK, 70m. The enough-English-to-get-by speaking 'West' / Europe is about 350m (of 700m) people. So, 700m Western English speakers in 'first world' economies.

deleted 2y ago

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ChrisArchitect 2y ago

Related: Portugal to reintroduce tax breaks for skilled foreigners https://news.ycombinator.com/item?id=40894527 https://news.ycombinator.com/item?id=40894527