• Analysis: Moody's warns its investors of the "real risk" that the Government of Sánchez and Iglesias will not last long
  • Savings: The small saver and not the big fortunes would pay for the changes we can raise

The regulatory and political uncertainty in Spain together with the attractive fiscal conditions offered by Portugal have turned the neighboring country into a focus of attention for national and international investors who are considering where in the Iberian Peninsula they are more interested in putting their money. Consultations with Spanish law firms, entities and advisors by investors and large estates have increased in recent weeks following the elections of November 10 and, above all, following the government pre-agreement signed by PSOE and United We can to launch the new legislature.

While they try to obtain the necessary support to form a new Executive, both parties decide what will be the distribution of powers of the future cabinet and the markets are very aware of how they will finally articulate those of the economic field. Although the PSOE and the current Minister of Economy, Nadia Calviño , have reiterated their commitment to European objectives and obligations, United Podemos, which would be their main partner in the Government, is in favor of promoting certain measures that would fully affect the financial industry and of the investment.

Among other things, the purple formation proposes to modify the fiscal regime of the sicavs, investment funds and socimis; eliminate "tax benefits" for investments in private pension plans and end the differences between the taxation of labor income and savings, that is, increase taxes on capital gains generated on the stock exchange and other investment assets .

Other of its proposals are aimed at higher incomes and large corporations , for which it proposes to recover the collection of Corporation Tax, establish a tax on large fortunes and tax financial transactions and banking.

The attractive Portuguese

At the moment, most of the consultations are that, consultations, and caution is imposed between analysts and experts waiting to see if finally all or some of these proposals goes ahead. However, the Portuguese neighbor offers a letter too attractive to avoid the temptation to look towards the Atlantic and there are individuals and corporations that are already doing so. "It is true that questions have increased on the part of Spanish companies in the last two months," they comment from a law firm that works with companies on both sides of the Iberian border.

Portugal has a beneficial tax regime for qualified professionals, large fortunes and pensioners who have long encouraged transfers from Spain. Effective since 2009, the NHR program for non-habitual residents means that they pay taxes at very low rates or benefit from tax exemptions for a period of 10 years from their registration as a resident in Portuguese territory. Another element in favor is the famous Golden Visa , that is, the residence permit - and access to the Schengen area - that the Government provides to non-EU investors who meet certain requirements.

And all that adds to the political stability led by the socialist António Costa and the good growth prospects that analysts give the country. In the last review of Brussels, the European Commission raised GDP estimates for Portugal this year to 2% from 1.7% earlier, compared to the rebate assigned to Spain.

Political uncertainty

The political uncertainty here constitutes a handicap for funds and investors, especially foreigners. Legal uncertainty and doubts about possible legal changes cause many of them to paralyze their decisions until the situation is clarified.

The Moody's rating agency has recently warned its clients of the "real risk" that the hypothetical Sánchez e Iglesias Executive does not last long due to lack of experience in coalitions. The firm also warned that the new government could increase public spending and taxes to maintain control of the deficit.

The doubts extend to the real estate sector , which during the recovery has been the main claim for the landing of large funds and institutional investors in Spain. "The market is paralyzed," said representatives of real estate agencies, agencies and companies in the sector. The multiple regulatory changes that have affected rent and housing in just one year and the risks that these changes will continue in the coming months freezes investments and projects on this side of the border.

Meanwhile, in the other, cities like Lisbon and Porto continue to win integers. Both have been revalued in the global real estate landscape and funds and developers have strengthened the purchase of properties that they later rehabilitate to sell and rent, mainly.

According to the criteria of The Trust Project

Know more

  • Portugal
  • GDP
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