In the European financial landscape, both Portugal and the wider European Union (EU) offer compelling investment opportunities. Yet the scale, structure, and strategic opportunities differ markedly.
While the EU’s investment fund market dwarfs that of Portugal in sheer size and diversity, Portugal’s economic environment and targeted growth policies offer distinct opportunities for investors, particularly those seeking localised growth, structural support and strategic positioning within the broader EU context.
The EU investment fund market: Scale and strength
The EU’s investment funds industry represents one of the largest and most mature in the world.
According to the European Systemic Risk Board (ESRB), total assets of EU investment funds and other financial intermediaries (OFIs) reached approximately €50.7 trillion at the end of 2024, a record high driven by valuation gains and net inflows.
Investment funds and OFIs are over 20% larger than the banking sector in terms of assets.
These figures reflect a deep and liquid market, offering investors access to a broad range of asset classes, including UCITS (widely traded mutual funds), Alternative funds (AIFs) and ETFs (exchange-traded funds).
EU funds for growth and innovation
EU investment funds, according to the European Fund and Asset Management Association, saw record net inflows of about €665 billion in 2024, more than double the flows seen in the previous year, highlighting strong investor confidence and participation across markets.
Furthermore, ESG-oriented UCITS funds - financial products prioritising environmental, social and governance criteria - are expected to reach €11 trillion by 2028, suggesting sustained momentum in sustainable investing, according to a report by PwC Luxembourg.
Diversification and cross-border reach
The EU market benefits from passporting rights under UCITS and AIFMD (Alternative Investment Fund Managers Regulations) frameworks, allowing funds domiciled in one member state to be marketed across the entire EU efficiently.
This integration offers investors unmatched diversification and cross-border access compared to many single-country markets.
Portugal’s investment fund market: Smaller but strategic
By contrast, Portugal’s domestic investment fund industry is much smaller in scale but offers compelling attractions.
Portugal’s funds, reflecting domestic assets under management, are measured in tens of billions of euros, with figures around €52.3 billion by the end of 2024, the highest since records began and up 11.3% compared to 2023, according to data from the Bank of Portugal (BdP).
The Golden Visa impact
These figures have been swollen by the effectiveness of its Golden Visa residency-by-investment scheme. It provides a pathway to citizenship for non-EU/EEA/Swiss citizens over a defined period in exchange for €500,000 in an approved and regulated Portuguese alternative investment fund.
Since its launch in 2012, the Golden Visa has attracted more than €9 billion in direct investment. Yet a recent report by the World Digital Foundation says that for every euro invested, it generates an additional €6 in wider economic value. As a consequence, it has supported up to 30,000 jobs in Portugal and delivered a €54 billion broader benefit.
Portugal’s strengths and local dynamics
Portugal’s fund market has several characteristics worth noting.
A large proportion of fund assets are in real estate investment funds (REITs), with real estate funds accounting for about 43 % of assets under management in 2024.
Portugal’s investment vehicles, particularly those aligned with strategic development sectors and EU support mechanisms, often offer higher growth potential than generic fund holdings.
The Golden Visa alternative investment funds are used to boost key sectors in the country, fuelling ongoing growth and enhancing the nation’s attraction to investors.
Portugal’s growth context
Portugal’s broader economic profile supports investment opportunities beyond the domestic fund market itself.
Portugal’s GDP growth reached 1.9 % in 2025, outpacing the euro area and EU averages (1.3 % and 1.4% respectively), according to the European Commission (EC).
This reflects a resilient, export-oriented economy with strengthening domestic demand - an environment conducive to investment, particularly in sectors tied to consumption and export growth.
The EC also predicts GDP growth in Portugal of 2.2% in 2026 and 2.1% in 2027.
Portugal’s Foreign Direct Investment (FDI) and strategic positioning
Portugal has become a notable destination for foreign direct investment, with FDI stock reaching substantial levels relative to GDP.
For instance, according to the Bank of Portugal, FDI accounts for around 69% of Portugal’s GDP, one of the highest shares in the OECD, illustrating strong international capital attraction.
The EU market offers a huge breadth and depth for investors – Portugal, coupled with its attractive Golden Visa – an opportunity to create wealth in a growing economy while also providing a pathway to citizenship and an all-important ‘Plan B’ for high-net-worth individuals.
Contact Portugal Pathways to find out how you can invest in Portugal
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.
Disclaimer: The information on the Portugal Pathways website and in email communications is for general informational purposes only and should not be construed as legal, tax, or financial advice. You should consult and check with a qualified professional advisor before relying on any information provided on this website or in email communications. As it relates to investments in Golden Visas or other wealth management solutions offered by regulated and professional advisors, it is important to note that past performance is no guarantee of future returns. Private equities can be highly illiquid and come with risk and should always be under professional independent advice.
