Study Suggests Proposed Nationality Law Changes Could Affect Portugal's Economic Outlook Over the Next Decade
A study jointly conducted by the Citizen Participation Association (SJC) and ISEG Junior Business Consulting suggests that, under its baseline scenario, the proposed amendments to Portugal’s nationality law could reduce economic activity by as much as €15.9 billion over the next ten years.
According to Lusa News Agency, following the publication of the report, the association requested a meeting with Minister of the Presidency António Leitão Amaro, arguing that the planned legislative changes could weaken Portugal’s attractiveness to foreign residents, investors and highly skilled professionals.
Assessing the Potential Economic Impact
The study examines the potential consequences of extending the minimum legal residence period required for foreign nationals to apply for Portuguese citizenship.
Researchers also considered the cumulative effects of several recent policy changes, including the closure of the real estate investment route under the Golden Visa programme, the termination of the Non-Habitual Resident (NHR) tax regime, and the ongoing operational challenges faced by the Agency for Integration, Migration and Asylum (AIMA).
According to the report’s baseline scenario, the proposed changes could reduce economic activity by approximately €401 million in 2026, rising to €5.53 billion over five years and reaching €15.9 billion over the next decade.
Under a more severe scenario, where confidence in Portugal’s regulatory stability deteriorates significantly, the impact could reach €655.1 million in the first year, €8.37 billion over five years and €23.54 billion over ten years.
The researchers argue that extending the pathway to Portuguese citizenship could discourage international workers, entrepreneurs, investors and families from relocating to Portugal, while several competing countries continue to offer attractive immigration and investment policies.
Public Finances and Consumer Spending Could Be Affected
The report estimates that public finances could also be impacted, with government revenue losses ranging from €76.6 million to €108.4 million in the first year, increasing to between €4.52 billion and €6.4 billion over ten years.
Social security contributions are expected to be among the most affected areas, with first-year losses estimated at between €35.6 million and €60.6 million. Over the next decade, contributions could decline by €2.88 billion to €4.89 billion if fewer skilled workers and entrepreneurs choose to settle in Portugal.
The report also notes that spending by foreign residents represents the largest share of the projected economic impact. Lower household consumption alone could reduce economic activity by €143.8 million to €199.9 million in 2026, with cumulative losses estimated at between €8.96 billion and €12.45 billion over the following ten years.
In addition, sectors such as housing, hospitality, restaurants, private healthcare, education, retail, leisure and other local services are expected to be particularly vulnerable to a decline in the number of foreign residents. Professional services could also face reduced demand, with lawyers, tax advisers, notaries, real estate agents and relocation companies projected to lose between €618.8 million and €902.6 million over the next decade.
The study further estimates that investment levels could decline significantly, falling by €130.7 million to €274.1 million in the first year alone, with cumulative investment losses reaching €1.81 billion to €3.79 billion by 2036.
Researchers also warn that part of this investment could be redirected to countries such as Spain, Italy, Greece and the United Arab Emirates, which continue to promote residency and investment programmes designed to attract international capital and highly skilled migrants.
International Competitiveness in Focus
The report highlights that Lisbon, Porto and the Algarve are likely to experience the greatest economic impact, given their higher concentration of foreign residents and international investment.
The proposed amendments form part of the Portuguese government’s broader reform of the country’s immigration and nationality framework. However, the changes must still complete the legislative process and receive parliamentary approval before they can take effect.
The government maintains that the reforms are intended to strengthen applicants’ ties to Portugal, improve integration and ensure the long-term sustainability of the country’s immigration system.
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