Entrepreneurs have always been drawn to Southern Europe. From tax incentives, to a supportive start-up environment and a qualified pool of talent - Spain and Portugal are obvious choices for founders looking to start their own business. 

Since the last UK budget, relocating to the Iberian Peninsula has become less of a lifestyle choice and more of a necessity.  

A growing sense of departure

Entrepreneurs in the UK face continued uncertainty at home, and relocation to Southern Europe increasingly provides an oasis to business woes. They’re being drawn by the promise of a better life abroad, in the face of political change, Brexit, and budget constraints. At the same time, sunnier weather, a more flexible lifestyle, and tax benefits are powerful draws.

The political landscape of the last five years has only worsened this uncertainty, driving founders to consider their options more closely. Touchdown’s 2025 Relocation Report found that 48% of founders said the Labour government coming into power influenced their decision to relocate, 46% pointed to Brexit, and 37% to the October budget. 

These pressures have turned a trickle of departures into a noticeable movement. With another Budget on the horizon, many are watching closely to see whether the UK can restore confidence.

After the last Budget: confidence cracked 

Following Labour’s 2024 budget, relocation interest has surged. Portuguese visa offices have reported a 32% rise in inquiries from expats in the last year, and almost 4 in 10 (38%) are already making the move. 

For new businesses, the policy shifts hit hardest. Higher corporate taxes, rising operational costs, and fewer start-up incentives created headwinds at a time when optimism was already fragile. In a recent survey by the Adam Smith Institute, over three-quarters of business leaders reported “low” or “very low” confidence in the UK’s economic outlook.

Rather than waiting for conditions to improve, many founders are choosing to build from places where progress feels more predictable. Almost one in four now plan to relocate within two years to protect their growth prospects.

The real motivation: freedom, not flight 

While taxes play a part, they are not the full story. Touchdown’s data shows that 33% of respondents cited tax benefits as a reason to move, while 64% pointed to weather and 59% to work-life balance.

Spain and Portugal offer an environment where start-ups can thrive, supported by strong infrastructure, an international workforce, and a rhythm of life that prioritises well-being. For founders seeking focus and flexibility, the Iberian Peninsula offers both. Lisbon and Barcelona, in particular, now combine world-class connectivity with a pace that supports creative energy.

For many, relocation is less about escape and more about design. The choice to live and work in a way that feels sustainable and intentional.

The next Budget: a moment of truth 

The UK’s entrepreneurial spirit isn’t fading - it’s moving.

As we approach the Labour Party’s next budget, will policymakers prioritise stability and innovation, or repeat the decisions that pushed more founders to look abroad last year? While exit tax looks like it could be off the cards, could capital gains and dividend taxes hike up in its place? 

Founders aren’t asking for special treatment; they want predictability. 60% say they would consider moving if the capital gains tax rises, a clear sign of how fragile sentiment has become.

If policymakers overlook what matters most - balance, freedom, and the space to grow on their own terms - the outflow will continue.