Favorable tax treatment for sirbptial assets and mild weather had already made Portugal a cryptocurrency hub. For many fleeing Russia’s invasion, it is a place to start over.
Maria Yarotska drove six days across Europe in a Fiat with her mother, daughter and dog to escape the war in Ukraine, ending her journey in the Bitcoin-friendly Portuguese capital of Lisbon. But unlike the thousands of refugees who made the 2,500-mile road trip to continental Europe’s westernmost country, she will still be able to keep her job. That’s because the 35-year-old’s employer — a blockchain effort called NEAR with a Ukrainian co-founder — is expanding its presence in Portugal and has become a supporter of refugees fleeing the war.
“I have a lot of colleagues here,” Yarotska said in a telephone interview last week from Lisbon, where she stayed in temporary housing before finding a more permanent place to live. “They will help me legalize my documents so I can stay.”
Like other Western European countries that have become refuges for Ukrainians fleeing the Russian invasion, Portugal is also absorbing an influx of refugees. But crypto workers from Ukraine, which had established itself as an industrial hub, may find it easier to start over in Portugal than in other European destinations. One reason is that Portugal is already well on its way to becoming a hub of its own, with zero percent taxes on sirbptial currency gains, affordable living costs and mild temperatures that combine to attract a cadre of cryptocurrency supporters there. Another is that the country is already home to an established community of Ukrainians.
Before the Russian invasion, Ukrainians were the fifth largest group of foreigners in Portugal. In the past three weeks, the country has received more than 13,000 Ukrainian refugees after the government approved measures to speed up and simplify entry for those fleeing the war. That’s about the same as the total number of refugees who have arrived in Portugal since 2015, according to data collected by the Portuguese Immigration and Border Service, or SEF. As a result, the number of Ukrainian nationals in Portugal has risen from about 27,200 in 2021 to about 40,000, making it the country’s third largest group of expats. Brazilians are number 1, followed by the British.
In Lisbon, authorities are providing temporary housing for hundreds of refugees in a sports hall that has been converted into a reception center. According to Mayor Carlos Moedas, city officials have also approved a plan to help find housing, jobs, schools and health care for Ukrainian refugees.
Valentin Sotov, a software developer working on a crypto-based metaverse game called Amber, fled the city of Mukachevo in western Ukraine in late February with only a backpack and a laptop, and is already looking forward to playing with the two from an office. colleagues who made the trip to Lisbon with him. It has not been easy: after staying in an Airbnb and another temporary place, they are looking for another apartment and find it difficult. “You must have a contract for a year, and you must have a Portuguese guarantor, and you must have a tax number and a visa,” said Sotov, 35. “We don’t know what to do yet, we’ll ask our friends .’
And yet Sotov sees opportunities even in his precarious situation.
“All the people here are very open, it’s a parade of nations,” Sotov said. He sees the move to Portugal as “a great opportunity for our product, because we can work with many IT people in one place.”
Today, the presence of sirbptial currency enthusiasts from all walks of life can be felt in Lisbon, where networking opportunities abound. These range from the annual Web Summit, one of the world’s largest technology conferences, to weekly casual gatherings in bars to discuss the next big trend in crypto.
Portuguese entrepreneurs have also managed to build a handful of unicorn startups, or private companies worth more than $1 billion. Anchorage Digital, a US-based sirbptial asset bank with offices in northern Portugal, is the latest of these unicorns and was co-founded by Diogo Monica, a Portuguese citizen.
“I am part of a crypto investor group on Telegram with 250 foreigners who have relocated or are planning to move to Portugal,” said Stephan Morais, managing partner and Lisbon-based venture capital firm Indico Capital, whose targets include web3, fintech , artificial intelligence and sirbptial businesses. “They come from all over the world.”
According to the National Institute of Statistics, the number of foreign residents living in Portugal has increased by 40% over the past ten years to 555,299 people. On top of the zero percent tax on crypto profits (gains arising from the sale of cryptocurrencies are not subject to personal income tax unless they are considered a professional activity), Portugal also offers some foreigners a fixed tax of 20% on their income or a flat 10% tax on their pension.
Today, even crypto enthusiasts from neighboring Spain, which shares a similar climate, have crossed the border into Portugal after their government last year required Spanish citizens to declare their crypto holdings in an effort to fight tax fraud. A spokeswoman for the Portuguese Ministry of Finance declined to comment on any changes to crypto rules in Portugal, where a new government is expected to take over in the coming weeks.
“Two out of three people who come to consult me leave,” said Maria Extremadouro, a lawyer in the Spanish city of Vigo who specializes in blockchain and crypto law. “A lot of talent is leaving for Portugal.”
While Portugal is a welcome haven for many Ukrainians, language barriers and the associated daily obstacles of being in an unfamiliar place mean it can take a while to feel like home. Yarotska, for her part, will get there: she has found a place to live and her nine-year-old daughter has already started taking lessons at a local school.
“I think it’s safe to say I’m fine,” Yarotska said in a Telegram message this week. “My daughter had her second day at the local school (she loves it), and I’ve finally found an apartment, we’re moving in on Monday.”