Portuguese stocks or Lisbon real estate for the next five years?

At least to judge by our media, the U.S. is embroiled in white v. Black, white v. Asian, white v. Latinx, and hetero cisgender v. LGBTQIA+ fights. We’re also adding $trillions in debt, welcoming millions of new welfare-dependent citizens, and instituting dramatic changes in government (every day we hear a new and exciting idea for a bigger more powerful central government!). It seems like a good time to ensure that children have the option to study, work, and live in Europe. The Europeans bumped up against the limits of how much government could be responsible for and don’t seem anxious to go back to the 1970s.

There is no way to predict whether Portugal, Italy, Germany, France, or Sweden will be a better place to live than the U.S. in 2030, but keeping only a U.S. passport is essentially a bet that the U.S. will be a better place to live than anywhere in the E.U. Would we want to make that bet?

Portugal operates a “golden visa” program in which folks who purchase real estate (500,000 euro) or invest in Portuguese stocks and bonds (1 million euro) can obtain citizenship after five years of periodic visits (roughly one week per year) and demonstrating a reasonable command of the language. After a passport is obtained for one or both parents, children can then get Portuguese citizenship as well. Then they can hang out in the wonderful Azores or the historic cities of the mainland and wander at will among the rest of the EU nations.

The most obvious place to purchase real estate is Lisbon, but the property market could be vulnerable to a crash since it has been pumped up by all of the other folks purchasing real estate to meet golden visa requirements. There are some developers who promise to pay 3-5 percent as an annual return for anyone who buys an apartment in one of their buildings, but obviously they won’t be paying if they run out of money after a collapse.

I’m wondering if it is safer and simpler to purchase Portuguese stocks, of which there are only 56 currently trading on Euronext Lisbon. The PSI-20 consists of the 20 largest stocks. A March 2021 Factsheet shows a P/E ratio of about 18 and a dividend yield of 3.63 percent. The big components seem to be energy companies and utilities, retail, and a bank (i.e., fairly conservative investments and maybe not a terrible hedge against U.S. stocks). The PSI-20 does not have a great track record. It is a good thing that there are dividends because the price is quite a big lower than it was in 2010:

I’ve never liked real estate as an investment, especially for a foreigner. You have to trust a city, a neighborhood, a developer, a building, etc. But folks in countries that have had a lot of economic ups and downs love real estate! They also like bonds, but right now yields are minimal (see “Portugal Sets Precedent with Near-Junk Bonds That Yield Nothing” (Bloomberg, December 2020))

European readers: What do you think?

American readers: send me an email if you want to copy this idea. I have found some attorneys that seem reliable (referred by a major international bank). There are some ways to do this with a capital stake of only about $350,000.


  • “Former Google CEO Eric Schmidt applies to become Cyprus citizen, along with his wife and daughter…” (Daily Mail), i.e., the Biden advisor won’t suffer too badly if his advice to President Biden doesn’t work out
  • “Golden visas to be scrapped for Lisbon and Porto” (starting in 2021): S… the PS parliamentary group decided it was time to address the galloping property speculation that golden visas have generated, as well as try to dynamise ‘poorer regions’ where people could do with increased job opportunities.
  • “Call to rent out vacant golden visa homes” (March 13, 2020): In the motion signed by the BE councillor in Lisbon, Manuel Grilo, to which Lusa had access and which should be presented on 12 March, in a private meeting of the municipal executive, it is defended that the municipality urges the Government “to proceed with the survey of vacant properties acquired in connection with the granting of gold visas”. In addition, and under the current legal framework, “the requisition mechanisms for public purposes must be considered in order to reinforce the housing supply in the municipality and, in such cases, define the obligation for these properties to be leased, within the scope of the Affordable Income Programme”. (If the U.S. government, via the CDC, can order an eviction moratorium for more than a year surely the Portuguese government could issue regulations around how these apartments are to be rented.)

39 thoughts on “Portuguese stocks or Lisbon real estate for the next five years?

  1. Portugal is known for its road and highway builders and maintainers, part of US highway work and maintenance is outsourced to Portuguese entities. I would that agricultural sector has winners as well. Check them out.
    From a laborer point of view Portugal is low on the places to work due to over-regulated economy and slow life and economic pace.

  2. Philip, if you indeed have ancestors buried at http://philip.greenspun.com/images/pcd1669/prague-jew-cemetery-77 you need to search your ancestry – you may be eligible to repatriate to EU member Spain if you can find Sephardi ancestry going back to Spain, not sure whether only expelled in 1942 or those who left earlier. If EU is your goal. Many Sephardi Jews made it to Prague through France and Germany.

    • LSI: I do have some Sephardic background (“Greenspun” is a corruption of “Greenspan,” which literally means “Green from Spain,” referring to some Jews from Spain who came to Germany to sell a green pigment), but the process of proving it all the way back to 1492 is rather onerous and the process of getting citizenship may be uncertain/discretionary. I’ve heard some tales of applications under the Sephardic pathway getting lost in a bureaucratic limbo.

    • Philip, you can check old tax documents in the country of your immigrant predecessors’ origin to walk back to someone with proven / accepted by Spanish government family name as originating from Spain, surprisingly old archives have them.
      But yes, I do not know people who moved to Spain under this law, even present day Sephardi Jews. Not sure why.

    • That’s right Bernard. Thanks for the correction. Too many screens open.
      1492. But some Sephardi migration from Spain to Europe started several centuries earlier, for commercial and trades reasons and also in response to ramping up persecution and local expulsions. Not sure whether Spanish law covers descendants of those expelled by Ferdinand and Isabella or descendants of entire Sephardi diaspora

  3. If the idea is giving up US citizenship, that is expensive if you own appreciated assets since you are taxed as if you sold them when you leave. If you don’t give up US citizenship you will still pay for the things you don’t like — so others can enjoy them. Portugal works for countries that don’t tax world wide income like most of the European countries. Not clear why you would want a Portuguese passport unless there were some financial benefit since Portugal is basically a third world country with more or less first world prices. The fact that Portugal has been stagnant for around 500 years would seem to indicate that most people don’t think it is a particularly attractive place to live. The fact that it gives its passport away for free more or less would seem to indicate that the Portuguese don’t place a lot of value on Portuguese citizenship — & they probably know more than you about that subject.

    • Jack: This is more for our kids than for us. So it will be a while before they have a ton of appreciated assets. And it is more to ensure that they have a good lifestyle rather than minimizing tax liability. So they could keep their U.S. citizenship, but live in the Swedish Free State if President Hunter Biden has got the U.S. locked down tight.

      Portugal is awesome as a place to live! You could hike every day for the rest of your life on various islands of the Azores and not get bored. Lisbon has a wonderful social life and lifestyle. It hasn’t been as good a place to work as London, for example, but coronapanic forever means that Lisbon could be better (Zoom from a place with sunny weather).

      Also, remember that a Portuguese passport is an EU passport. So our kids would have the freedom to live anywhere in the EU where they could get a job or sustain themselves. (Movement around the EU is not as free as in the U.S. If you’re on welfare in Maskachusetts you can show up in California and collect welfare there. If you’re on welfare in Italy, though, you can’t just show up in Sweden and collect welfare. Unless you’re a refugee from Syria or Afghanistan or Somalia or wherever you will have to work.

    • Jack: On the expatriation front… Presidents Biden and Harris are proposing that all appreciated assets get hit with capital gains tax (without inflation adjustment, so you’d owe a huge tax even on a long-held asset that had actually gone down in value) when an American dies. Especially given the lack of inflation adjustment, the relative cost of expatriation will be a lot lower than currently for people who have moderate sized estates (e.g., $10-20 million). Right now you could (a) expatriate and pay capital gains tax on appreciation through 2021, including fake appreciation that is due to inflation, or (b) die with $11 million in assets and there would be no federal estate tax (don’t die in Maskachusetts or you’ll be paying a 16% state tax rate on the margin!) and also no capital gains tax due. On assets with a minimal basis (due to inflation), that’s 24% versus 0%. With Biden’s new plan, you’re talking about paying 25-50% now or 25-50% when you die. Given the lack of inflation adjustment, heirs might inherit more if the parent expatriates now.

    • @Jack interesting view. To me it feels instead that Portugal is a first world country with third world prices. But, as a disclaimer, I am Portuguese (although I no longer live there). I think I have a good grasp of the country and how it compares on the word stage. Portugal is definitely much poorer (on average) and less productive than the US, and collectively people have been depressed for about 500 years (agree with you on that one). But it also lacks the extreme poverty and widespread homelessness you see in any major US city, and inequality is much less of an issue. The cities could be better organised, but most major cities have infinitely better public transport and roadways that US cities. The national motorway system is one of the most modern and developed in Europe. University is very affordable, and entry is based on merit only – nothing like the broken US system of university admissions, elite universities, and favouritism. As a consequence, Portugal has a highly educated workforce (and in some sectors, quite competitive – you can’t really expect that much from a place with only 10 million and almost no natural resources). Healthcare is free, although you probably only want to use the public system for emergencies – most middle class have generous private plans that do not cost an arm and a leg. So, despite all of that, it can still be quite comfortable living in Portugal, especially as restaurants, labour, etc. is much cheaper than in the rest of Western Europe.

      About citizenship, and to go on to Philg’s point. I think the golden visa scheme is a scandal and should be terminated (in fact, I thought it was already finished). Outside this scheme it is actually very difficult to obtain Portuguese citizenship. Permanent residents that speak the language and lived in Portugal most of their lives get their applications routinely rejected. The law is very vague, and it demands a “connection to the Portuguese society”, which is arbitrarily interpreted, usually against applicants. I don’t know if many of the the golden visa people do get citizenship in the end, or if they just want a visa with free travel in Europe. I would find it very surprising if they did manage to get citizenship and a passport, since the law is the same and they make it really hard. Even if you marry a Portuguese citizen, you need to be married for three years and still have that connection to the country — in the case of my wife it was very difficult to get it and took years.

  4. It wasn’t pumped just by golden visa recipients (about 8000 in a decade).
    Lisbon became popular for tourists and other European citizens. In 2020 there were about 20 000 “airbnb” type lodgings in the Lisbon Metropolitan area alone. In my building in the center of Lisbon, there’s one Portuguese owner, there remainder are: a German-Chinese couple who wanted a getaway apartment, one British couple, based in the UK, renting it out, one Franco-British couple based in Lisbon and the Chinese owner of the street level store.

    I would say the major issue for the Real Estate is what you mentioned: being a foreigner, far away from your property. If you end up finding a trustworthy local agent, that may work, otherwise, it may be too demanding.

  5. One of the last things my grandmother did for me before she died was March down to the German embassy and pick me up my very own “ Reisepass“. My grandmother lost her citizenship in the holocaust. There is some law that says any descendants of Jews who lost their German citizenship would get it restored. I remember it to be a very informal process all done in German which I don’t speak. She just rolled up her sleeve and showed her concentration camp tattoo a and that was more or less it. My grandmother was a difficult person to argue with and I am sure the Germans just wanted this over as soon as possible. This happened in the year 1998. Maybe you have ancestors who lost German citizenship! I think the idea of a back up EU citizenship is a good idea.

    • Germany accepts Jewish immigrants, at least from former Soviet Union, together with ethnic Germans native to other countries, if this is what Phil wants to do. There is some wait time and point system where programmer, pilots and millionaires should score high but it does not get lost in bureaucracy, small but not insignificant Jewish community in Germany can attest. Soviet WWII veterans get military pension too I believe and sometimes wear Soviet medals.

  6. I am European and I am considering moving to Florida or Texas. It looks like all European governments are fully on board with the Covid agenda. Only some small opposition parties offer some resistance. Why move to Europe and be locked inside your home, have to wear masks, get vaccine refreshers every 6 months, show your QR code everywhere like a communist, when you could be living a normal life in Texas or Florida?

    • Out of curiosity, have you ever lived in the US?
      And where do you show a QR code everywhere? (By the way, this is almost equally true – not a QR code, but some sort of less sophisticated version of ID – wherever you want to buy alcohol in the US).

    • FFD, “wherever you want to buy alcohol in the US” ???
      Probably in state(s) where you live it is true, not everywhere in the US.
      Or do you look young?

    • LSI, my experience is mostly from living in MA, but I’ve visited many other states. While looking old is a mitigating factor, it is not always guarantee that you won’t be asked for an ID.

      But you are correct, I was exaggerating for comic effect, as I don’t know anywhere in (Western) Europe where you have to “show a QR code everywhere” as the original commenter mentioned.

  7. (Re previous post — I thought that Sweden had moved to stricter measures, but it looks good actually. Might move there instead of Florida. ;-))

    • If you talk to folks who live in Sweden you’ll find that the “recommendations” are not followed. People have been going about their lives more or less normally. That these are recommendations rather than orders from a governor or other executive mean that the Swedes don’t have the fights that Americans have regarding masks and other measures. It is not a fractured society as the U.S. has become.

  8. PhilG,
    Did u consider New Zealand ?
    Apparently, allows for dual citizenship, requires some investment over a period of 4 years or so.

    • D: New Zealand is a great country and I enjoyed my time there (see https://philip.greenspun.com/nz/ ). But it is also a small out-of-the-way country accessible only by long over-water flights (like Hawaii, where Dr. Christine Blasey Ford chose to move and subsequently said that she was unable to come to the U.S. Senate when requested due to a fear of being in an airliner). The probability that our kids, 20 years from now, will want to study or work in NZ is low compared to the probability that something interesting to them will be happening in one of the EU nations.

    • If your biggest worry is a full-scale nuclear war wiping out the big countries, then New Zealand is ideal.

    • Roger, New Zeland’s most powerful weapons are 4 launchers of 4 old version Harpoon missile, 16 missiles total. Crews of surviving American, Soviet and Chinese nuclear-powered attack submarines will fight over New Zealand supremacy.

  9. I guess the grass is always greener elsewhere. I’ve lived in three European countries for longer periods (7+ years) and visited the States (Pittsburgh) for a 4-5 months stay. For me, the States are a capitalist country while Western Europe is uniformly socialist while the former communist block countries are still immune. Europe feels on a downward spiral, economically (Greek crisis, unresolved sovereign debts, the looming post-covid inflation and bankruptcies), politically (the overbloated EU bureaucracy), culturally (the continuous influx of uneducated and unskilled immigration, the open-borders NGOs, etc). There are some still industrialised nations, such as Germany, The Netherlands, Denmark, Austria, Sweden, (Northern) Italy, some more (Germany), some less touched by the culture wars, there are the debt-ridden countries of the Latin Arch (Italy, France, Spain). I’m very surprised that an American sees Europe as an alternative. Choose a country (I would recommend Denmark or Sweden; Switzerland would be best, but it’s not in the EU) and try it out for a year.

  10. One nice surprise I got after buying a house in Germany: property taxes. I bought a house for 300,000 euros, and guess how much taxes I pay on it yearly? 100 euros. Of course, there is a 5% purchase transfer tax when you buy the property (closing costs are all together 10%, including the purchase tax).
    I think a property in Florida of 300k would require 2-3k in taxes per year. Of course anything is better than NJ and CA!

    Pluses in Germany for a STEM major:
    30 days vacation + public holidays (42-44 in total). Can store up to 10 days of unused vacation.
    Overtime returned (can be another 2 weeks of holiday!)
    Good healthcare system with mix of public and private top-ups (Austria’s is excellent)
    Extremely low property tax
    Cheap child care
    Maternity/Paternity leave
    You will walk more, and be more healthy.
    Good public transport.
    Quality of life is simply better.

    Make about 20-50% less than US counterparts (depending on field, position, etc). Management positions are not as steeply compensated as in the U.S. Which may be good since management is anyway rarely productive (see admin bloat in US hospitals/education/etc). As Charlie Munger said “too many people these days think moving emails to another persons inbox is called work!”

    Everything closed on Sundays and holidays. In major cities shops can be found open near train stations though.
    Customer service and experience is not a top priority at supermarkets, etc.
    Convenience is a concept gradually creeping into the German mindset, but still far away from American concept. It will get there eventually. With Amazon here it’s pretty good.
    Variety of food – in big cities you will get most everything but nothing can beat the variety found in big supermarkets in the USA.

    What is a wash in the end:
    I guess if you come from New England, you will already be familiar with the inconvenience of having a car in those places.

    Taxes+social security+healthcare for a family are about 35%. So expect to be able to keep 65% of your income after all. Again compare that to CA/NJ… you probably come out better here.

    • «Everything closed on Sundays and holidays. In major cities shops can be found open near train stations though.»

      Funny, after living next to an open-24 hours-Shaw’s, I actually welcomed this

    • FFD, is “open 24-hours” a novelty for New England? In the USA such places are common but they tend to be called “WallMart” and they have their own large parking lots and located far enough from residential areas not to be a nuisance.

    • Yes, I know. It’s not novelty, on the contrary, such shops are routinely used, and I myself made use of them. And while having the freedom of buying a gallon of milk at 3.20 am has its benefits, after moving to a place where you can’t shop 24h/24h or Sundays, I realised that I had used that freedom to generate some unhealthy habits.

      Personally, I hardly see any benefit (individual or societal) in having open 24h supermarkets or similar. But that’s just me.

    • 24 hour supermarkets are mostly used by first responders, travelers and people who work in shifts. Even if MA has no manufacturers left it still has hospitals where doctors, nurses and support personnel work in shifts

    • I know that. But are you implying shift workers, doctors, nurses and support personnel who work in Zurich, Lisbon, Vienna or Madrid can’t buy groceries?

    • They might not be able to. I used to live in a country where store open hours generally coincided with regular working hours and to buy some non-trivial but common staff required taking time off work, similar to doctor appointment scheduling i this country. Btw. nobody forces stores to stay open 24/7 in the USA.

    • I guarantee you, they’re not starving or going without cleaning products.

      And I never said being 24/7 is mandatory. Of course there is some demand for it. But like everything in regulated markets, one balances rules by observing laws and culture.

      By the way, I’m not telling anyone to do anything. The only point I made is that, having experienced living with access to open-24 hours supermarkets, I much prefer living in a place where the local culture works in a way where open-24 hours supermarkets aren’t needed.

    • @Nione, serving in the military is not a bad thing at all. None of the countries in Europe are at war. Serving in the military teaches a tanager some important life surviving skills not to mention, what it means to take orders and working hard. Also, your chances of dying in a combat is far less then dying from a car accident or even Covidfear.

    • Yes, serving in the may help to keep to children closer to where “interesting things are happening” . Also getting involved into street life or marijuana+ subculture in the USA seems much more dangerous then serving in active military. I have several examples where parents left countries so their children did not serve in military but children got involved in criminal activities and destroyed their lives in other ways.

    • George: While I agree that most European countries are currently in an historically unusual Long Peace, there is no assurance that this will continue. The EU might enter some internal crises. I don’t think a NorthAm techie would like his/her 18-year old son or daughter to take up arms to quell rioting in refugee camps in Greece, tear-gas Banlieue stone-throwers, or stop secession of long-repressed ethnic regions/minorities. One needs a strong ethnic/emotional/community bond to justify this kind of commitment.

      LSI: I agree with your comments about the positive aspects of military service, especially for youth who might otherwise be at-risk. But as I wrote above to George, I think one needs strong emotional ties to justify it.

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