London, Paris and Berlin all have one thing in common and that is the ever-increasing cost of living. That is the reason why young people who are looking for an exciting job opportunity, cheap place to live and want to experience a metropolitan atmosphere are becoming increasingly attracted to Lisbon. For example, a cup of cappuccino in Lisbon costs on average only 1.34 euros, while in other startup hubs, such as Berlin, the average price for a cappuccino is 2.68 euros and even 3.09 euros in London.
During the numerous interviews we conducted with startups, accelerators and company representatives from Lisbon, we almost always received the same answer to the question: “Why is Lisbon so popular?”
“The biggest reason is the lifestyle you can have here. It has like 300 days of sun, it’s really cheap to live here. People are very nice and humble and there is a ton of talent, Portuguese people are very well educated.” Sissel Hansen, the founder of the Startup Guide, also confirmed.
The Government Aims to Attract Capital Funds for Investment In Startups
In addition to good weather and amazing food, the Portuguese government is also encouraging entrepreneurship through various programmes focusing on developing the startup ecosystem. For example, the government has set up a 200 million euro venture capital fund aimed to attract foreign investment. Plus, business registrations can be made online in less than an hour. Founders from other European member states can also benefit from tax exemptions when setting up a business in Portugal.
The country is also luring people with a flat income tax rate of 20 percent and businesses who can enjoy a 10 years tax-free welcome.
The government also wants to attract non-EU citizens to the country. The Golden Visa is intended to simplify the procedure for granting of a residence status for those wishing to start a business.
In cooperation with Factory International, the largest startup campus in Europe is being built in the Beato neighbourhood, competing with Station F in Paris. Over 10,000 square meters of office and event spaces, as well as bars and restaurants for the surrounding neighbourhood, will be created there in the upcoming months.
Statistically, there are many indicators suggesting that the initiatives are paying off. In addition to a large tourism boom, the economic growth is currently estimated at 2.6 percent, the highest since 2000. Additionally, unemployment rate has fallen to 6.7 percent, the lowest figure in the last 16 years.
WebSummit Will Remain in Lisbon for Another 10 Years
The city of Lisbon is gaining ground and one can already feel the spirit in the city. However, the boom has also some negative effects on Lisbon.
Although the necessary office space is being created in the Beato factory, apartments in Lisbon are in short supply, also due to the high number of apartments offered via Airbnb. So there is still a long way to go, but the Portuguese government appears to want to continue the transformation.
Lisbon will remain the host city of the tech conference WebSummit for the next decade. This will take place within the framework of a new agreement that will bring the organizers of WebSummit over 110 million euros.
Lisbon thus remains on the international startup radar and hopefully, this certainty will also attract venture capital and international investors to the city.