Madeira and most notably the area around Funchal has become a global hotspot for people from all around the world. Whereas Madeira’s population has seen a relative decline over the past decades, the foreign population has more than doubled since 2015.
Where do the foreign nationals in Madeira come from and what drives them to the island? The question to be asked: can Madeira's growing foreign population improve the island’s living standards?
Foreign Nationals in Madeira - Official Numbers
According to Direção Regional de EstatĂstica da Madeira, Madeira officially counts 11793 foreigners as of 2022. This is an increase of more than 100% from 2015, when the Island counted 5743 foreign nationals, and an increase of 13,3% compared to the previous year.
Over a third of the foreign population is from countries within the European Union, with Venezuela, Brazil, Russia, and the United States standing out as notable exceptions.
More than half of the foreign population is living in the capital Funchal (6032), with Santa Cruz (1571) and Calheta (1178) following on the 2nd and 3rd place respectively.
What brings people to Madeira
As a popular tourist destination, the island attracts many people who consider staying here for longer and relocating to the island.
Madeira also has a relatively low cost of living and is seen as attractive to all people around the world. This is especially true for people who are retired and who do not need to figure out how to make a living.
Job opportunities for non-Portuguese speakers are relatively scarce and usually not well paid. They reflect both the economic situation of Portugal and tourism as the unsustainable backbone.
This is why many foreigners are often contracted abroad or working as freelancers for foreign employers, thus evading the hardships that many locals face.
Another major driving force is the desolate situation in Venezuela. With an economy in open decline and many nationals fleeing the country and bringing their family back to Madeira.
Impact on the Local Population
Speaking to locals makes clear that the pressure has mounted. The reasons for this are manifold. As we all live in economically challenging times, fulfilling the most basic needs is becoming a question of significant importance.
With a minimum salary of 785 Euro (gross) and a notoriously bad-paying tourism sector, the island failed to have the economy work on behalf of the local residents. Needless to say, this salary does not even pay for a studio in Funchal. Even a single room becomes a luxury.
“YOUNG PEOPLE WITH NO SPACE TO DREAM ON THE ISLAND”
This issue is particularly pressing, as many young Madeirans, seeking the chance to establish independent lives beyond their parents' homes, are leaving the island in pursuit of more affordable and promising career opportunities.
NHR and Golden Visa
It is no secret that the Non-Habitual Residency (introduced in 2009) and the Golden Visa scheme (2012) has increased the likelihood of foreigners moving to Madeira.
These developments are a driving force for a housing situation that grew out of control, with rental prices in Funchal and elsewhere continuing to exceed the already inflated housing crisis that is sweeping throughout major cities in Europe.
The continuation of the Golden Visa program in Madeira is uncertain. The Portuguese government has announced plans to phase out the program for real estate investments in major urban centers. Still, it has not yet made a decision about whether or not to continue the program in Madeira and the Azores.
So what signifies the end of Portugal's Non-Habitual Residence? I believe it's reasonable to predict that Madeira will keep attracting more foreigners. The Pearl of the Atlantic no longer requires a tax regime to convince foreigners of its benefits and beauty.
As for the NHR, it remains to be seen whether the decision to withdraw the NHR will reap fruits for the local economy and the housing market.
Top 10 Countrys of Foreign Nationals in Madeira
1.) Venezuela (2323)
2.) United Kingdom (1390)
3.) Germany (1106)
4.) Brasil (1080)
5.) Italy (654)
6.) Spain (392)
6.) Russia (392)
8.) France (374)
9.) United States (288)
10.) Poland (276)
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