TL;DR: It’s easy to have a comfortable, affordable, and sunny life in Portugal.
Note: I’m not a tax or legal professional, and this is not tax or legal advice.
Sunny, warm weather
As much as I love Berlin, I struggled slogging through the five-month-long gray winters. Porto, the city where I now live, rains frequently (it’s probably one of the rainiest places in Portugal), but still manages to have 2x the number of sunshine hours as Berlin, and mild weather year-round.
English-speaking, friendly people
While not everyone speaks English, the majority of people I’ve interacted with in major cities do. People also seem far more willing to speak English compared to Berlin (I was once scolded at the Berlin airport: “In Germany we speak German!”). While I’ve heard that in Lisbon there’s some discontent about locals being pushed out of the city, in Porto I’ve only found people to be extremely welcoming. I recently went to pick up a package at a convenience store. The owner was so friendly, welcoming me to the neighborhood and chatting about my experience learning Portuguese. This would, literally, never have happened to me in Berlin. Nor can I imagine many Americans so enthusiastically welcoming a foreigner to their neighborhood.
Attractive tax scheme for foreigners
If you are in a “high value” profession (which basically means an IT worker) and you haven’t resided in Portugal in the past decade, you may qualify for a special 20% income tax for 10 years. This is an extremely low income income tax rate for the EU. (Note that if you’re American you will probably have to pay additional taxes in the US, because 20% is likely less than your US tax rate, which never goes away, because America.) Portugal was once quite attractive for not taxing crypto, but has announced it will start taxing it, though those details are to be determined.
Relatively affordable real estate
While some people spent their COVID lockdown baking bread, I obsessed over buying a home. I originally was looking to buy in Berlin, but I quickly learned that I would either need to move to the outskirts or give up on my dream of both my partner and I having home offices. For the same amount of money as a crappy one-bedroom in Berlin, in Porto we were able to afford a beautiful apartment in the city center with more than enough space. If you’re interested in browsing real estate, there’s no one site that lists every property, but imo the best one is Idealista.
Cheap property taxes
Perhaps it’s normal for property taxes to be low in other countries, but for the Americans reading this: Portuguese property taxes are pennies compared to real estate taxes in many states: I pay less than 500 EUR/year in property taxes, though that rate will vary depending on what and where in Portugal you buy and if the property is your primary residence.
Fiber internet is widespread and not that expensive. We got our internet set up in a few days, whereas internet setup in Berlin can easily take weeks. We’ve had no issues or downtime (I’m looking at you, Comcast). The internet speed and reliability is much better than my experience in California and Berlin.
Affordable and high quality health care
Basic health care is free, and I pay 90 EUR/month for additional private health insurance (this was the most expensive/comprehensive package I could find), which includes 500k coverage for international treatment. I haven’t interacted with the health care system too much, but this has been my experience so far:
Through my private health insurance, I had two phone consultations a few hours after I requested them (even on Sunday), both in perfect English. From the consultations I was prescribed medications which successfully remedied my issue. I picked up the prescription from the pharmacy a few blocks away. I paid for the prescriptions myself (not too expensive). I was advised to visit the emergency room if my condition didn’t quickly improve.
I don’t know enough about both medical systems to assess, but here’s my intuition: If you have tons of money to blow on all the bells and whistles of the American healthcare system, I don’t think you will find that level of care in Portugal. However if you are looking for safe and sane treatment and want to avoid the insanely expensive, litigation-fearing American health care system, I think Portugal is great.
I have had a better experience in Porto than in Berlin because the healthcare system is friendlier to English speakers, and I haven’t had to wait as long to get an appointment.
Low cost of living
Of course, “low” is relative, and Lisbon will be far more expensive than a rural city. Speaking from my experience of Porto’s expenses, it seems very reasonable to live on 2k EUR/month, but obviously this would depend on your rent/mortgage, whether you share a place, how much you eat out, etc. 2k EUR/month is the avocado toast range—many of the locals live on far less, as 900 EUR/month is a common monthly salary.
Here’s a sample of prices:
90 EUR/month private health insurance (this is the high end; basic public health insurance is free)
80 EUR/month electric (3 bedroom apartment)
30 EUR/month gas (3 bedroom apartment)
10 EUR/month water utility
50 EUR/month for a fancy gym membership
70 EUR/month for fiber internet and unlimited mobile data (this is the high end)
2 EUR – typical bus or metro ticket
One thing I noticed is that I spend less money in Portugal simply because the market is less developed. If I were in the US, I would go to Whole Foods and blow $150 on kale chips and coconut water, but in Portugal there’s simply not those options, so I… save money. Similarly, in the US I would buy a bunch of crap online. In Portugal online shopping is far less developed, and so I just… buy less. In Europe in general, shopping is not the center of society as it is in the US, and it feels more like a chore rather than means of entertainment. In Portugal, people don’t seem to show off through possessions as they do in the US. Altogether it feels like a healthier and saner relationship to consumption.
Visa and citizenship is accessible for non-EU citizens
While Germany is accessible to non-EU freelancers, I felt confined being on the freelance visa, as I had to abide by rules such as having at least one local German client and receiving at least 25% of my income from a second client. It felt like I was managing my workload simply to keep Germany happy, when I would have preferred a different setup.
In contrast, you can get the D7 visa in Portugal if you can prove you’re receiving adequate income and also have a good amount of savings. For whatever reason, people tend to think they need the Golden Visa. However if you are planning to live in Portugal–not just dump money in a place for a passport–I’d go with the D7, as there’s no investment needed and it’s far cheaper in administrative costs. The only advantage the Golden Visa gives is you don’t need to live in Portugal for the majority of the year. After five years on either the D7 or Golden Visa, you can apply for citizenship.
Portugal is quite safe. In 2021, the Global Peace Index ranked Portugal as the fourth most peaceful country in the world. Of course, you should still be prudent, especially in larger cities.
Why Not Portugal?
Portugal is ideal if you are doing a location arbitrage where you earn an income that is set for a higher cost of living. Due to the relatively low salaries and the likelihood you would need to speak Portuguese, I wouldn’t come to Portugal looking for a job. However, coming from the US market which is so saturated, I see a LOT of opportunities for entrepreneurship in Portugal and the EU in general.
My biggest gripe about Portugal is that Portuguese food is not vegetarian or vegan friendly. However, if you’re in a major city like Lisbon or Porto you’ll be fine–provided you don’t go to traditional Portuguese restaurants. And if you eat fish you’ll find plenty to eat.
For being in the EU, Portugal is pretty affordable. However if you’re looking for the cheapest cost of living, there’s other countries that would be cheaper. Certainly e.g., Thailand would be cheaper.
If I were in my 20s and could work remotely, I would be a digital nomad and explore various countries before deciding where to live.
If I were a North American in my 20s and wanted to grow my career abroad, I would move to Berlin. Getting the German freelancer visa is a headache but doable, and I think the city is more lively and fun, and with more career opportunities than Lisbon.
When I was contemplating moving to Portugal, I enjoyed Our Rich Journey and Expats Everywhere YouTube channels. I also appreciated this site on the D7 visa, though I didn’t use their services so can’t attest to them.
Many of my American friends talk about moving from the US, but that’s what it is: talk. Certainly many of them have work or school ties to the US, and that is a real obstacle. But I think most often it feels too overwhelming or scary to consider, and so they stay put. My advice: visit the place you’re interested in moving to for a month. It will take a few weeks to get adjusted to the new place, and by the end of the month you should feel much more comfortable with the idea of moving, or else know that it’s not for you.
Thanks to Augusto Lopes for the photo.