Portugal’s Progressive Policies Drive Fintech Growth
The recently launched Portugal Fintech Report showcases a colorful and colorful fintech ecosystem in a country of around 10 million inhabitants. When unpacking the report, one thing is clear: clusters and innovation in the Portuguese fintech scene provide a case study of how the Portugal Fintech Report’s universal government approach, specifically in its handling of regulations on cryptocurrencies and freelancers, stands out from the norm in the EU and effectively fosters innovation and expansion in the fintech sector. The alignment of the country’s fintech sector with those unique regulations has led to a physically powerful and developing fintech landscape. Portugal’s approach, which combines regulatory flexibility, attractive tax incentives, and lifestyle benefits, positions it as a major hub for virtual asset-focused fintech startups and independent fintechs.
A varied combination of proposals.
A handful of fintechs featured in the Portugal Fintech Report contributed by sharing their motivations for opting for Portugal and the advantages offered by the fintech ecosystem. These arise largely from favorable government policies and regulations, but they also derive advantages from the country’s economy. Exclusive geographical position and maximum quality of life. These fintechs include:
Wallid offers a suite of identity response tools that can span Web2 and Web3. It offers explicit payment connected to an individual’s bank account that allows Americans to identify, pay, and pay only with their bank account in a single transaction. Wallid simplifies Americans’ credentials, deciding what and with whom to share them. Their project is to simplify and streamline the way consumers shop online and securely reveal their identity.
Coinscrap Finance, which operates in Portugal and Spain, was founded in 2016. Its project is to be the artificial intelligence platform for the monetary fitness of transactional knowledge and long-term behavioral economics. As a B2B fintech, Coinscrape Finance is helping banks and insurers perceive the needs of their customers. monetary scenario and sell the product that is most productive for them, a win-win scenario for monetary institutions and their retail customers.
Uphold, a Web3 monetary platform committed to simplifying Web3, serving more than 10 million consumers in more than 140 countries. It provides businesses and consumers with easy access to virtual assets and services. Uphold’s unique “Anything to Anything” interface provides end-users with seamless access to and between virtual assets, national currencies, and valuable metals. Uniquely, Uphold intelligently routes orders across 30 trading venues, offering optimal execution and incredible liquidity to clients. Uphold never lends out its clients’ assets and is one hundred percent reserved. The company has pioneered radical transparency and exclusively publishes its assets and liabilities every 30 seconds on a public website.
The Jupiter app, created through public accountant Vânia Fortes, is a platform that caters to the developing microeconomy of freelancers and virtual nomads. It streamlines the incredibly voluminous tax management and filing procedure that freelancers face. Their project is to empower people, drive innovation and position Portugal as a leader in supporting the future of art in the virtual age. At the core of the Jupiter app is an easy-to-use interface along with automation for freelancers to comply with tax rules.
Europe’s Crypto Hub
Portugal, especially Lisbon, has long been the European crypto hub. The regulation of crypto companies began in late 2020 through the VASP Act, and until recently, Portugal introduced favorable taxes on cryptocurrencies, exempting transactions from capital gains tax and VAT. In 2022, Portugal revised this position by introducing a 28% capital gains tax on crypto assets held for less than a year. The government also presented the Digital Transition Action Plan to complement innovation in the virtual economy, which included the creation of “free zones”. ” to test cutting-edge technologies, demonstrating the country’s commitment to fostering technological growth. The above points have contributed to Portugal’s attractiveness as a crypto-friendly destination.
Eugene Tkachevsky of IvendPay believes that “Lisbon is rightly the crypto capital of Europe due to its rich and varied community, as well as its countless occasions and projects in the crypto arena. Portugal and organizations such as Fintech House actively promote the crypto community, offering an ideal environment for innovation and expansion in this area.
Marco Oliveira, chief innovation officer at Uphold, echoed Tkachevsky and highlighted the strong global skills pool for cryptocurrencies and Web3 in Portugal. He said: “The influx of foreign marketers coupled with local technical knowledge has made Portugal fertile ground for everything Web3, blockchain and crypto. The local skill works hard and is in no way inferior to what can be discovered elsewhere places. We chose to expand to Portugal ten years ago and that is why we continue to invest in this ecosystem to build the Web3 monetary platform. that is Uphold. The Portuguese market is small in comparison, so the Portuguese tend to have a foreign mentality, and it is being able to gently rub shoulders with other local and foreign marketers with whom you can learn, collaborate and grow together.
Ilya Milkin, CEO and founder of WallId, believes that Portugal will remain the crypto hub of Europe. He believes: “Regardless of what happens to the big players in the crypto space, breakthroughs and strategic projects are created through talented startup founders and blockchain developers. Portugal remains a very interesting position for this community and they will shape the future of the crypto industry.
Location, Location, Location
With its proximity to Spain, Portugal is often the “next” market Spanish fintechs look to, both from an operational perspective but also as a similar market to grow the product offering. David Conde, CEO of Coinscrap Finance, said, “Choosing Portugal as one of our operational bases is a strategic decision grounded in its conducive business environment. The country’s robust economic growth, financial stability, and progressive regulatory landscape make it an ideal hub for our fintech operations. Moreover, the cultural and geographical proximity to Spain streamlines adaptation, fostering seamless collaboration and a strong market presence. Portugal’s increasing demand for digital financial solutions aligns perfectly with our offerings, presenting a ripe opportunity for growth and establishing a meaningful footprint in the Portuguese market.”
A paradise for freelancers and virtual nomads
Portugal has an attractive destination for freelancers and virtual nomads, thanks to a series of policy projects and tax incentives designed to encourage their relocation and work in the country. The most notable incentive is the Non-Habitual Resident (NHR) program. will be replaced in 2024, providing significant tax benefits to new citizens for a ten-year era. Under this scheme, foreign sources of income (including pensions, dividends, royalties, and interest) may be exempt from Portuguese tax. In addition, a source of income from salaried and self-employed work from high value-added activities of a scientific, artistic or technical nature would possibly be taxed at a flat rate of 20%. This concentration on high value-added activities makes Portugal’s independent microeconomy the main source of income. Professional and tech-savvy, this market has excited Vânia Fortes, founder of the Jupiter app. Fortes believes that politics has played a key role in the strong expansion of the self-employed sector.
“In recent years, we have noticed a new movement due to the rise of the sharing economy and systems such as NHR that have brought to Portugal a new type of freelancers, foreigners and tech-savvy. From a macro point of view, those independents differ from the ones we had just 15 years ago. Today, it’s other highly professional people who are self-employed as their favorite way of painting. Gen Z is also entering the painting force and they don’t have a 9-to-6 work schedule. schedule, so self-employment will be the way to go.
All Eyes On Portugal
Portugal stands out as a case study of how a colorful fintech scene can expand from government policies. This distinctive policy framework has nurtured a thriving fintech ecosystem and positioned Portugal as a hub for virtual asset corporations and independent startups. The diversity of fintechs, by ivendPay The cryptocurrency responds to the facilities of the Jupiter application for freelancers, underlines the relationship between progressive politics and technological innovation. In an era of immediate innovation in monetary facilities, the Portuguese style demonstrates that the right combination of policy, innovation, and collaboration can create an environment in which this generation thrives and catalyzes a small country like Portugal to become a regional and potentially global hub for innovation.
Disclosure: I am a Business and Fintech Advisor on the Jupiter app.