Our Founder’s Reflections for the New Year

Chitra Stern – CEO at Martinhal Resort and United Lisbon International School

Our reflections during COVID and why it’s a great moment to invest and live in Lisbon

It’s the start of yet another year – the Happy New Year messages with emojis and videos have gone out all over the world on social media but 2022 is quite different year. We have all just been through something we hope we will not have to see again in our lifetime. A global pandemic which has changed our lives for the next decades. We have had to deal with constant uncertainty – an oxymoron if I ever saw one – and continuously pivot and adapt to everchanging circumstances and restrictions. Roman and I have had to steer our different businesses into safe harbors in storms while having these harbors change location all the time with new weather conditions and terrains facing us at every corner. I was reminded of being in a Harry Potter movie, or scenes out of Indiana Jones, trying to make sense of landscapes changing right in front of me while trying to move forward, with several surprises and pitfalls to grapple with around corners.

It is natural that I have been reflecting quite a lot during the last two years about our lives in Portugal and our businesses that we have built here over the last 20 years. We made a choice to move from London to Portugal in 2001 – was it the right decision?

Time of growth 2001-2008

Obviously, the time period 2001 – 2008 saw unprecedented growth in Portugal. We started a family and a real-estate and hotel businesses and saw our family and businesses grow in that time. We got to appreciate the country we had moved to. We marveled at the workings of the European Union as we could feel the positive impacts in Portugal of EU funds being rolled out and education moving the country in the right direction. However, it is easy to feel good about a place in “rosy” and positive periods of growth. What is a true test of a society and country is what happens during crises. 

Freddie Mac, Fannie Mae and Lehman Brothers: 2008-2013

The global financial crisis had a huge impact on the economy and business life in Portugal – and things were tough between 2008-2013. The country managed to get back on its feet thanks to the bailout package with the famous “Troika” of the EU, IMF and ECB. The government also introduced a very important residence through investment program (the Golden Visa) and the non-habitual residence, NHR, tax regime – which brought much-needed investment and immigration through the years 2014-2019. The same period saw an unparalleled increase in tourism thanks to strategic government initiatives. Portugal started to be recognized as the “California of Europe” – not just for its geography but also its growth potential as a technology hub in Europe.

Portugal in the COVID19 pandemic

Nothing prepared me personally for another crisis so soon. And a crisis of such a scale! COVID19 has been a great leveler – an unusual global event where one can compare lifestyles, societies and governments across countries. 

In these 2 years, Portugal has proven itself as a safe and secure place in Europe to live in. Equitable with its healthcare system where everyone was able to receive the best vaccinations on the market easily. It proved beyond doubt why being part of the European Union is great. The much-criticized vaccination procurement procedure not just worked but worked extremely well for Southern European countries. In the end, even countries which discovered and produced vaccinations upfront were not able to execute their vaccination programs effectively because of their populations. Portugal stands out in the world for reaching 90% fully vaccinated figures with much richer countries like the UK, US and Switzerland still struggling to get a larger percentage of their populations vaccinated. 

We experienced a society that was not panic buying toilet paper since the start of this ordeal. We saw sensible measures being implemented to keep the economy going while keeping our community safe. Most important of all, we experienced a largely educated and sensible society that believes in science that got on with mask-wearing when necessary, that got vaccinated, that enabled safety measures to be implemented. We saw true democracy working as various parties came together on several issues important for the health of the nation during this pandemic.

Why Portugal post-COVID?

As many of you already know, I have believed in the potential of Portugal for 2 decades. The last 2 years have just sealed my beliefs even further. I have done a series of talks and webinars since early 2019, which have come together as a nice series of informative webinars for investment and relocation decisions for those considering moving to Portugal. You can access the playlist of these 4 videos between 2019 and 2021 here.

I have been following relocation decisions of couples, families and digital nomads from various countries. Geopolitics and the search for a secure and peaceful society obviously helps Portugal. Easy access to public and private healthcare is an important factor for many, especially after the last 2 years. The temperate weather, access to “real” food and location play a part. Tax incentives and residence programs obviously play a part too. English is widely spoken and so on and so forth, the list goes on. You can find out much more from my videos – including my TEDx talk from 2019.   

We are humans, not robots

However, I constantly come back to my top reason for the inflow of investment and people into Portugal – the Portuguese people! I have never seen such a kind and welcoming people who respect diversity and multiculturalism. They are welcoming of other religions, creeds and colors. They are genuinely interested in where you come from. They care about community. They are not a purely “transactional” society and they are not individualistic. They care about you as a human being and they care about relationships. Foreigners here who had previously not part of the national health service were quickly integrated and were vaccinated, as humans, while other countries saw inequalities being exposed and exacerbated, with some countries vaccinating foreign workers late with inferior vaccines compared to locals. The younger generation saw it as their duty to their elders to get vaccinated to keep them safe. We as human beings recognize the importance of living in a community which cares, now more than ever, after experiencing this pandemic.

Please don’t go back to your own country!

In addition, there is a huge recognition by the Portuguese of the high contribution of foreigners in their society and economy. A recent report points to the net social security contributions alone being between €800 million and €900 million annually in 2019 and 2020. There is awareness that certain sectors of the economy could not function without immigrant workers – such as construction, agriculture, restaurants and hospitality. People applaud the fact that foreigners moving here counterbalances a declining and ageing population. The Portuguese are aware of the other tax contributions such as the 10% or 20% flat tax under the Non-Habitual Residence regime, Value Added Tax (IVA) on their consumer spending and Property Transfer Taxes/ Stamp Duty (IMT) on property purchases. The pandemic has magnified the importance of tourism for the economy and employment. The Trade and Investment Agency of Portugal, AICEP, which has been promoting Foreign Direct Investment (FDI) over the last decades recently reported 2021 to be a record-breaking year for FDI – at €2.7 billion – which was over 200% more than 2019’s figure which is quite an achievement given the pandemic. This is a sign of the times ahead for FDI in Portugal and an affirmation of the confidence that Portugal generates for FDI in these times.

Celebrate your milestones

Roman and I have had to make some tough decisions during the pandemic years and we are proud to have celebrated 10 years of Martinhal in 2020 – 10 years of looking after families looking for a luxury experience for every member. We have kept our hotels going and to have our wonderful core teams intact in these choppy high sea waters. Our Martinhal brand has always been about its people – the Martinhal Family that works hard, goes the extra mile for each other, as well as our guests, and sticks together.

I have always said that as entrepreneurs, one should celebrate the reaching of milestones, no matter how small they are. This has become even more important during this pandemic – gratitude and celebration are important for us all, psychologically.

A new international school within a wider Edu Hub – United Lisbon

Just before the pandemic, Roman and I invested in the United Lisbon International School in the Parque das Nações (Park of Nations) area in Lisbon because we believe in education for the future and in enabling international families to move here. We did the impossible by opening the school on time in September 2020, at a very tough point during the pandemic. Gladly, we have already seen our student community grow to over 300 students with over 25% being Portuguese – affirmation that this school was a much-needed investment for the area and that it is not just for a foreign enclave. Our faculty is diverse and multi-cultural – making this a truly international school. The availability of international education is a key part of the decision to relocate to a certain area for families. We are proud of having regenerated a defunct building for such a high purpose – and we have been recognized for this, as we have already received a couple of awards, including the “Lisbon Prize” at the World Architecture Festival, an accolade for “the best building in the city” for our renovation/ refurbishment/ regeneration of a building from the 1950s combining expertly form, function, purpose and sustainability. We have also had recognition from different political parties at the local government level for the importance of this project for the area – gratitude and recognition for a project brought by foreign investors that one does not get so easily in other countries.

The school is the anchor project for a wider Education Hub – a hub for innovation and creation which will see companies and academies coming together with the school to guarantee an education that is fit for tomorrow’s purpose and not stuck in the past.

The Ageas Insurance Group’s new HQ by the Martinhal Group

We managed to finish our development of the new Lisbon headquarters of the Ageas Insurance Group at the top of Avenida D. João II also in the Park of Nations and hand it over – an outstanding and award-winning building, no less!

New Golden Visa rules for Lisbon and our 5th Martinhal – Branded Residences

We have seen the Golden Visa rules change over the year-end. The Martinhal Group has seen its long-term decisions to continue to invest in highest quality “touristic apartments” and a luxury hotel brand since 2001 bear fruit during this pandemic – our 5-star Branded Residences – the Martinhal Residences – at Park of Nations is 80% sold out and will continue to be eligible for the Golden Visa as it is “commercial” and not “local accommodation”. It will open in early Q4 this year and will be our 5th Martinhal in our small collection of high-end Portuguese hotels and resorts which continue to help create #martinhalmemories and mean even more to families seeking quality time together in this #postcovidworld.  We are an established brand of hotels managing these serviced apartments – perfect for renting, short stays or living. Martinhal Residences will be a landmark building in the Park of Nations area with excellent facilities and 5-star services! Lisbon continues to rise in reputation as a modern capital city in European while still brimming with history and culture.

Martinhal Sagres – a hassle-free Golden Visa investment in the Algarve

Houses at Martinhal Sagres will continue to qualify for Golden Visa investments for those investors seeking a beach-front property with 5-star facilities and services in the Algarve. The holiday experience at Martinhal Sagres continues to be truly unique and special. Even though I lived at the resort in Sagres for 7 years between 2009 and 2016, arriving in front of the hotel at the beachfront takes my own breath away every single time I drive down from Lisbon to the southwestern-most point on continental Europe.

“A Esperança” – Hopeful for the next decade and beyond

These difficult times are perhaps not over yet but it is indeed satisfying to feel that we have made the right investment and life decisions in this last two decades and that we are steering our ships to safe harbors, which seem to be stabilizing, during 2022. As I raised my glass to 2022 at our 5-star hotel in Quinta da Marinha, Martinhal Cascais, where a highly vaccinated and tested group of people were together enjoying the amazing New Year’s party entertainment and the delicious food being delivered by our incredible team at the hotel, I was full of hope for 2022 and beyond. Happy New Year and wishing you all the very best in health, happiness and prosperity!

Note from Martinhal Residences in October 2023:

The Golden Visa and NHR (Non-Habitual Residence) regimes have both changed in 2023, or are changing. While they both will still be in place, how one gets a Golden Visa (or Residence Permit) or an NHR status is changing completely. Please consult with EDGE International Lawyers, or another lawyer, to understand what has changed and how you can still avail of these regimes, or D2 or D7.

The Martinhal Team