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Exemption From Customs Duties

Finnish pensioners being lured to Portugal by tax-free status

Finnish retirees are relocating to places such as Portugal, which is starting to show signs of recovery from the financial crisis. New tax-free pension laws in the southern country are spurring the interest.

Ihmiset ottavat aurinkoa Espanjan San Cristobalissa.
Aurinkoranta Espanjan San Cristobalissa. Image: Juan Manuel De Haro / EPA

One of Finland's richest men, banker Björn Wahlroos, recently caused a stir when he relocated to Sweden for its lower inheritance tax rates.

And now it seems other countries are vying to attract wealthy Finns to become resident.

Traditionally, Spain and France have been tax-friendly destinations for Finnish retirees.

But now Portugal has decided they want to tap into the pensioner market. On a drive to kickstart their economy, Portugal is now promising high-earning retirees that their Finnish pensions will be tax-free for 10 years.

Currently about 60,000 people living overseas draw a pension from Finland.

Most of the amounts are small, but the pensions of those living in Portugal are proving to be larger - suggesting the relocation incentive may be working.