Digital Nomad Hype In Portugal Causing Youth Exodus From The Country

Digital Nomad Hype In Portugal Causing Youth Exodus From The Country

Finding young people with computer skills is proving to be a surprising challenge for Banco Comercial Portugues SA, a company based in an area sometimes referred to as Europe’s hub for digital nomads.

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.