Moving To Portugal: A Good Country To Escape To?

Thinking of making a fresh start somewhere new? And has Portugal made it onto your list as a place you might potentially want to relocate?

Then let me fill you in from the perspective of someone who’s done it.

I moved to Portugal in late 2016. Realizing I could make a living online and potentially live anywhere, I began to look seriously into Portugal. What maaaay have also played a role was that I was living in the UK at the time (I’m Dutch), I didn’t like Brexit, and I was badly in need of more vitamin D. So, off I went to somewhere sunnier and cheaper to live.

So, did it work out?

All I can say is that Portugal ticked all the right boxes for me. If you’re thinking of relocating somewhere, I think Portugal is a great place to look.

In 2020, Portugal came third in a ranking of expat locations by InterNations, and it’s been getting much buzz among digital nomads.

Many list the sunshine, food, lifestyle, costs, and culture as key motivations to move to Portugal. In terms of safety and stability, Portugal has also been ranked third in the global peace index, just below New Zealand and Iceland, and above Austria, Denmark, and Canada.

Of course, as with any country, Portugal is not just rainbows and unicorns.

Since my post about the pros and cons of moving to Lisbon went a bit viral, I thought I’d also answer some of the common questions about life in Portugal from my own perspective.

What’s life like in Portugal?

To start with the obvious: the climate in Portugal is pretty damn good.

It’s much balmier than in northern Europe, having a mostly Mediterranean climate (northern areas form the exceptions). If you’re from North America, you can compare the Portuguese climate roughly with California.

It’s crazy how much a sunnier climate affects everything. I truly believe people are like plants: we need sunshine! It’s a big part of why this plant (yours truly) put a few roots in Portugal.

In fact, I’m writing this very paragraph while sitting in a park in Lisbon. The sun shining in my face, it’s 24 degrees Celcius (75°F) and — here’s the twist — it’s late November. That’s not to say it’s always so nice this late in the season, but to even have some days like this until the start of winter is just fantastic. (In central or southern Portugal, it rarely averages below 10 degrees Celcius even in winter.)

Living in Portugal can lead you to a different more outdoors-focused lifestyle. It may allow you to lower your costs of living, as well. When you can get an espresso for 60 cents, life gets a bit easier. Of course, this is entirely from a foreigner’s perspective, and there is more to say about the cost factor from a local point of view.

Since moving to Portugal, I’ve gotten to know a great community of expats and nomads living here, as well as a good number of Portuguese. One thing that makes it easier to settle in is that English is widely spoken in Portugal. The language can be tricky (in my opinion, much more difficult than Spanish) but you’ll have plenty of time to learn it while you’re using English to get by.

Cost of living in Portugal

This topic is a bit delicate, as for many Portuguese, the country most definitely isn’t cheap. Low salaries are the reason why many Portuguese professionals move to Germany or the UK, for the same but opposite reasons as why other nationalities move to Portugal.

On an absolute basis, the cost of living in Portugal is definitely much lower than in any other countries in Europe. Basic services, transport, and groceries are all very cheap when I measure against countries like the UK (where I lived) or The Netherlands (where I’m from). You can get a good sense of the costs involved by looking at Numbeo, Expatica, or Nomad List.

Since wages in Portugal are also low, you only truly benefit from these low prices if you can arbitrage in some way. Many foreigners benefit from having a foreign income, pension, or savings.

For reference, the average net salary is around €1170, compared to €1780 in Spain or €2439 in Germany (2017 numbers). Judged by local income levels, the costs of living in Portugal can be said to be relatively high.

One important thing to know is that rents and house prices in Lisbon (and increasingly Porto) are very high. Pushed up by tourism and property speculation, the costs are now out of proportion with the local economy, though may still seem affordable by the standards of other international cities that you may be familiar with.

Lisbon’s average income compared to average rents has one of the worst ratios in Europe at the moment, which is a sore point for many Portuguese. Nevertheless, Lisbon may still seem ‘cheap’ compared to London or Paris; a 1-bedroom apartment in a central area of Lisbon may cost about 900 EUR per month.

Having said this, the countryside and smaller cities are much cheaper to live in. If you’re looking for bargains, this is where you can find them. Driven by low property- and land prices, some foreigners are attracted to starting organic farms, eco-resorts, or off-the-grid projects in Portugal.

As a foreigner coming to Portugal, you may be able to benefit from lower taxes, which can significantly alter some of the cost equations. Be sure to check out the NHR program to see if it might apply to you. Speaking to a professional consultant about this can be quite elucidating as this program isn’t necessarily explained so well online.

Politics

Depending on your views, it may seem odd to bring up politics here. But it’s not uncommon for people to move to Portugal because of the politics of where they live.

When Bolsonaro was elected president of Brazil, there was a real trend of more Brazilians moving to Portugal. Before the 2020 US Elections, one relocation agency in Lisbon told me they were receiving many more inquiries from Americans concerned about a negative political climate in the US. Similarly, near my house is a new organic grocery store which is run by two Hong Kongers, who fled the political situation there.

Clearly, politics can weigh into people’s decisions for where to live. So, are they right to think of Portugal as a ‘safe haven’?

First, let me put my cards on the table: I don’t like extremist parties, I believe Trump to be a disgrace, and I think Brexit (although an entirely valid choice) was a seriously bad idea. Of course, everyone has their own political perspective and yours may be different from mine. The point is that politics do often factor into people’s decisions to move and I, like anyone else, have my own views.

Now that you know where I stand, I can say that I think of politics in Portugal as refreshingly reasonable and down to Earth. It’s dominated mainly by a social-democratic party, a center-right-liberal party, and a collection of smaller mostly left parties. Portugal has a reputation for relative calmness, security, and quality of life. I also found it quite telling that during the pandemic, most measures (such as mask-wearing) were implemented with little fuss.

Mind you, the Portuguese do have plenty to complain about in their politics. Ask them about it and you’ll no doubt get an earful. Expats who are mostly unaware of the day-to-day news may sometimes see Portugal in an unrealistically utopian way. On the other hand, the locals seem to never give their elected officials any credit for doing anything right!

I’ve noticed that, in general, locals will more easily complain about issues like corruption or high taxes (and there is no doubt they’re high). Foreigners are more likely to praise some of the pragmatic things done by the government, a relative lack of political extremism, or overall cultural attitudes in Portugal.

The one thing that could be said objectively is that some of the hyper-partisanship seen in other parts of the world is luckily rare in Portugal.

It’s also a country that tends to take a quite level-headed approach to many issues. Contrary to popular belief, drugs are not legal in Portugal, though they are decriminalized. Portugal is also tolerant and progressive when it comes to such issues as LGBTQ rights. This contributes to an overall positive perception of Portugal among many around the world. (I do invite you to read the comments below this post for a range of impressions on this point.)

Healthcare

Portugal has a free national health service that any resident is entitled to use. It’s essentially similar to the NHS in the UK, though it is known to be highly understaffed and there can be long waiting times. The healthcare quality is pretty good though and you can decide to get by on just using the NHS.

For higher quality care as well as fewer waiting times, it can be very beneficial to get some additional private health insurance. This is very cheap by international standards. For example, I pay about 50 Euro a month for a medium package with a popular private insurer (Medis) which gives ample coverage with some basic co-payment. The private hospitals are in general very good.

Moving to a city in Portugal

I mainly know city life in Portugal as I moved to Lisbon several years ago, after having lived in Amsterdam, Brighton, and London, as well as having been based in various cities for shorter periods as a digital nomad.

One attractive point of the Portuguese cities is that they have a vibrant community of remote workers, digital nomads, and other freelancer types. The key expat communities exist in Lisbon and Cascais, followed by Porto.

Lisbon has the benefit of being the capital (hence always lots going on) as well as having a fantastic climate year-round. In summer, it’s warm and sunny, but never too hot thanks to the sea breeze. In winter, it’s mild as well, often still allowing plenty of outdoor activities or having a little bica (espresso) at a square kiosk without getting too cold.

Porto is the country’s second-biggest city, which has a bit of a different climate due to being much further north. It can be much colder and mistier in autumn and winter. Some prefer the character of Porto, as well as the renowned friendliness of the northern Portuguese, though many internationals do seem to flock to the sunnier Lisbon.

It’s in the capital where there are also numerous meetups, events, and Facebook groups for internationals to find each other. The digital nomad community is very strong in Lisbon and includes both temporary and some longer-term residents of Lisbon. There are also expat-focused meetup groups, as well as numerous local ones.

I mentioned Cascais as well, which is a seaside resort town outside of Lisbon. Cascais is known for being a bit wealthy and posh and has some of the most expensive real estate in Portugal, hence it’s mostly popular with older well-to-do expats or retirees.

Moving to the countryside

The one big advantage of looking in the Portuguese countryside is the cost of land and properties. Around 100 to 200k Euro can get you a nice house in the countryside. The further inland you go, the cheaper it gets. If you’re up for fixing up a ruin, you can find them in the 40-60k range. This brings quite a few bargain hunters to Portugal.

As a result, there seems to be a minor trend of eco-minded people starting organic farms in Portugal, converting ruined farmhouses into B&Bs or eco-retreats, or buying land to start an off-the-grid project.

If you’re interested in eco and countryside living in Portugal, the best starting point I know of is the site Pure Portugal. It has oodles of listings for land and rural properties all around the country. Their blog and Facebook group also give a wealth of information about where to live and tips on matters such as testing the water quality, applying for EU grants, installing solar panels, and more.

The inland areas of Portugal closer to Spain have seen quite a bit of depopulation over the years, but this makes them particularly interesting areas if you’re looking for attractively priced property.

Besides this, the coastal areas have been popular retirement and holiday home locations for decades, notably the Algarve coast where many Brits choose to live some of their golden years. The coastal areas are, for obvious reasons, also highly favored by avid surfers — though they flock more to the west coast to catch the bigger Atlantic waves, and less to the calmer waters of the southern Algarve.

Practical considerations

In order to move to Portugal you, of course, must be permitted to live there. For EU citizens, this is just a minor formality. For those outside the EU, you’ll have to apply for a residency permit, the process for which differs depending on your situation.

(If you’re looking for professional legal advice on this, I can refer you to a great relocation agency in Portugal. Just fill out the form at the end of this post.)

Something to look into is the D7 Visa, which can be of interest to retirees or those with passive income streams. The Non-Habitual Residency (NHR) program is also one to look into, as it can provide tax benefits to certain foreigners looking to relocate to Portugal. For example, you could get a 0% tax on foreign dividends, a 10% flat tax on foreign pension, or a 20% flat tax on activities within Portugal. This last benefit of a flat tax on Portuguese activities does depend on having a profession that Portugal is looking to attract, the list of which has changed over time.

One thing to mention is that you’ll probably need to get used to some bureaucracy in Portugal. I’m from The Netherlands and have lived in the UK and found most interactions with the government or tax authorities to be fairly straightforward, while official information on the internet is usually clear and succinct. Don’t expect things to be quite as well-organized in Portugal.

Taking care of basic registrations, taxes, and so on can be complicated or slow. Information can be conflicting and civil servants can be downright rude sometimes. I’ve wanted to pull my hairs out on quite a few occasions, though after a while I did come to accept that anything involving paperwork can be more ambiguous or frustrating than I’m used to. It’s one of the trade-offs when moving to Portugal.

After a while, you do get used to navigating this a lot better – and luckily, there are many Facebook groups and such where you can get advice. It’s also possible to get assistance from a dedicated relocation agency, who can take care of the necessary registrations, visa applications, or tax optimizations for you.

All things considered, Portugal has a lot to offer to emigrants and temporary residents, so it’s easy to see why it’s gotten on the radar in recent years. Although there can be challenges when moving to a new country, I consider Portugal a fantastic place to live.