Investors are rapidly turning away from American stocks, favouring European markets at an unprecedented rate.
Portugal is set to be one of the main beneficiaries, with the Portugal Investment Owners Club reporting that they have seen a significant uplift in investor interest in Portugal’s Algarve region, as well as Lisbon, the Silver Coast, and Porto, for property, as well as tourism and hospitality.
This shift coincides with a wave of economic uncertainty in the U.S., where investor confidence has plummeted due to concerns over inflation, a potential recession, and policy unpredictability.
Heightened market volatility, driven by factors such as tariffs, fiscal policy uncertainty, and concentration risks in U.S. equities, has prompted investors to diversify into European stocks.
European markets offer attractive valuations, less index concentration in mega-cap stocks, and exposure to global growth drivers like defence spending and green energy initiatives.
Additionally, Europe has shown resilience amidst U.S. economic slowdown and tariff-related challenges.
One market that has seen a major shift in economic growth and investment as well as relocation is Portugal.
Portugal’s economy is thriving, with inflation on the decline, GDP growth on an upward trajectory, and investor confidence reaching all-time highs.
The Japan Credit Rating Agency (JCR) raised Portugal’s sovereign risk rating from ‘A’ to ‘A+’ in 2025. This recognition highlights Portugal’s diversified economy, structural reforms, and fiscal discipline, reinforcing its ability to withstand external economic pressures.
In January 2025, Portugal’s consumer price inflation fell to 2.5% from 3.0% in December 2024, demonstrating a consistent downward trend and bolstering confidence in the country’s economic policies.
According to Finance Minister Joaquim Miranda Sarmiento, Portugal’s government projects GDP growth of 1.8% in 2024 and 2.1% in 2025.
Paul Stannard, chairman and founder of Portugal Pathways and the Portugal Investment Owners Club (P Club), said:
“U.S. investors are flocking to Portugal, with a significant upturn in interest following November’s election and due to the speed of change and volatility created by the U.S. administration, which has created this market downturn and uncertainty.
“We speak to U.S. clients every day who are fearful of being so heavily invested in U.S. markets amidst this period of instability. Once familiar global brands from the U.S. have seen the biggest declines in their brand and stock value, sparked by the isolationist narrative.
“This is particularly notable when contrasted with investor confidence in Portugal, which is at an all-time high, according to a report by Ernst & Young (EY) on Portugal’s attractiveness.
“In just the last two weeks, we have been inundated with U.S. families enquiring about investment opportunities in Portugal, whether that’s property in the Algarve, Lisbon, the Silver Coast, or Porto, as well as tourism, technology, healthcare, and renewables.”
A recent survey by Bank of America revealed that fund managers are reallocating capital from the American stock market to Europe at the fastest pace in 25 years.
The U.S. market has been hit hard, with the S&P 500 tumbling 10% from its peak, signalling a correction phase that could foreshadow a broader economic downturn.
Historically, only 12 instances since 1990 have seen stock market recessions not translate into full-blown economic downturns in the U.S.
Meanwhile, other geopolitical factors are coming into play, with UK investors also seeking diversification due to domestic factors such as inheritance tax (IHT), capital gains changes and other government legislation set to come into play in April 2027.
These policies, combined with broader market uncertainties, are prompting a shift towards diversified European portfolios with reduced reliance on U.S. and UK assets.
Despite the gap in absolute liquidity, European stocks show competitive turnover velocity (value traded relative to market capitalisation), indicating that liquidity is relatively robust for their size compared with U.S. stocks.
On the other hand, Portugal stands as a beacon for relocation due to the Golden Visa residency by investment programme and its new IFICI (NHR 2.0) tax regime, which offers 0% tax on non-Portugal-derived income, including capital gains and dividends.
There is also no inheritance or gift tax in Portugal, and it has a friendly tax approach to digital assets such as cryptocurrencies that have been held for more than a year. Fiat currency trading has also been impacted with the U.S. dollar dramatically dropping against the likes of the Euro and UK Sterling.
Europe’s economic policies have fostered a resilient financial environment, with declining Eurozone interest rates and robust growth in places like Portugal propelling the markets.
Foreign investment is pouring into Portugal, to the tune of €13.2 billion, up 19% from the previous year, bolstered by the country's investor-friendly regulations and strategic economic initiatives.
David Vacani, chairman at Beacon Global Wealth Management, said:
“We have seen a significant flow of U.S. people in 2025 selling down their US stock holdings (reflected in stock market performance this year) and looking to expand and diversify into European stocks and European assets like property and alternative investments, such as the ones offered under the Golden Visa programme. We have seen this particularly in Portugal, but also in France, as well.
“And, it’s not just US citizens – the effect of the UK budget in October 2024 with onerous increases in CGT and Inheritance Tax, for example, have seen many wealthy UK tax residents looking to leave the UK and diversifying into Europe.”
One of Portugal’s most attractive investment opportunities is its Golden Visa residency by investment programme. This programme grants residency to private non-EU investors and families who commit at least €500,000 to an alternative investment fund regulated by CMVM, Portugal’s government regulator.
The Golden Visa also allows investors to hold residency in Portugal with their eligible family members, providing freedom of movement within the EU Schengen Zone countries and a minimum stay requirement of just seven days per year in Portugal, as well as a pathway to dual citizenship and an EU passport after five years.
The Golden Visa residency by investment programme in Portugal has drawn non-EU investors looking for security, access to the European market, and a hedge against economic instability elsewhere. Portugal’s Golden Visa success has been a key driver in Portugal’s increasing appeal to high-net-worth individuals and, separately, institutional investors.
Paul Sheedy, special advisor to the Portugal Future Fund, an alternative investment fund approved for Golden Visa residency by investment in Portugal, said:
“We had already seen a huge uplift in investor interest from the U.S., but the last few weeks since the tariffs and other narratives that were coming out of America, we have seen a wall of new investors wanting to take advantage of Portugal’s growing reputation as well as the chance to secure a Golden Visa and European citizenship after five years and a dual passport.”
The shifting tides of global finance indicate a significant realignment in investor priorities. As the U.S. grapples with economic turbulence, the Eurozone and, in particular, places like Portugal’s stable and growing economy, coupled with the incentives of the Golden Visa programme and the IFICI (NHR 2.0) tax regime to value creators and professionals coming to Portugal, provide an increasingly compelling case for investment.
With U.S. growth projections declining and European markets surging, smaller countries like Portugal’s economic resilience and welcoming approach to investment and relocation stand as a testament to strategic governance and investor confidence.
About Portugal Pathways
Portugal Pathways has supported hundreds of Golden Visa residency-by-investment applications and provides expert guidance through its professional supply chain network on luxury property, wealth management, and tax optimisation, including post-NHR tax regime planning, as well as private healthcare, IFICI tax incentive applications, money transfers and bespoke relocation solutions to enhance life and investments in Portugal.
About Portugal Future Fund
The Portugal Future Fund strategically invests in key sectors, driving growth and innovation across Portugal. Approved for Portugal’s Golden Visa residency-by-investment, it offers a unique opportunity for impactful and rewarding participation.
About Portugal Investment Owners Club
The Portugal Investment Owners Club, or P Club for short, is a unique investor membership community designed for discerning individuals, families, and organisations committed to exploring and capitalising on life in Portugal and enjoying money-can't-buy experiences and exclusive events.
