An expat’s guide to living in Portugal

The number of Brits taking residency in Portugal continues to surge. Tens of thousands make the move every year, with many more hoping to do so. Expats say they value Portugal’s laid-back lifestyle, safe streets, and warm climate. The country ranks among the top ten OECD nations for well-being, safety and happiness.

But Portugal isn’t only a destination where you can put your feet up; it boasts strong economic growth and is on the lookout for professionals in the IT, healthcare, pharmaceuticals and biotech sectors. So whether you are thinking about diving into Lisbon, ‘Europe’s tech hub’, or searching for a sun-soaked retirement, Portugal has plenty to offer. Our comprehensive guide will help you decide if Portugal is right for you.

How difficult is it to move to Portugal?

UK nationals have the right to stay in Portugal for 90 days every 180 days, the same rights extended to citizens of the EU. However, Brits will need a visa to stay for an extended period, whereas those from the EU remain able to study, live and work in the country without a permit.

However, there are plenty of options to choose from. The country offers a job seeker visa, allowing those looking to work in the country for as long as nine months to find the job of their choice – provided they can demonstrate the ability to look after themselves financially.

So-called ‘digital nomads’ have a bespoke route into the country and can work for up to two years in Portugal as long as they can demonstrate a monthly income of more than $3,200 and savings of $38,000.

Investors can be granted a ‘golden visa’ if they invest substantially in a Portuguese private equity or venture capital fund. The visa also has thousands of USD associated with legal fees and other costs, but it can provide an immediate route into the country with the right to remain for the investor, their family, and dependent children.

Retirees should consider the D7 visa, which also grants holders visa-free travel across much of the continent. If the applicant has a clean criminal record and can meet the financial requirements, they stand a good chance of being granted the permit, which opens the door to permanent residency after five years of stay.

How much money do you need to live comfortably in Portugal?

Many expats will find the cost of living in Portugal comparably low to what they’re used to – particularly if they have arrived from countries like the UK and the US. Among Western European countries, Portugal has been said to have the lowest living costs and is around 30 percent cheaper to live in than France.

According to data from Numbeo, a single person’s monthly cost would be $728 before rent, and a family of four would need $2,570 before rent. The cost-of-living calculator also suggests that renting a house in Portugal is almost 25 percent cheaper than in the UK. However, costs will depend on where you stay in Portugal, with property prices soaring in its capital Lisbon, where the average house price is now more expensive than in Milan or Berlin. But that said, life in Lisbon costs half as much as life in London, according to Expatica.

However, expats should consider additional costs, such as schooling. While Portugal provides state education, foreign nationals may want to enrol their children in international schools, where they can be taught an alternative curriculum. As per InterNations, the average monthly cost of an international school in Portugal is $880.

To mitigate the tax burden, expatriates in China can take advantage of certain tax exemptions and deductions available under Chinese tax laws. For example, certain allowances and benefits provided by employers, such as housing allowances and education subsidies, may be partially or fully exempt from taxation.

Because of the rising cost of private education, more parents are considering planning ahead for their children’s education so they can get the best schooling possible. If you’re interested in a savings plan which could help you get your child into their school of choice, it could be worth considering speaking to a professional financial advisor.

Is tax competitive in Portugal?

The tax you will pay in Portugal will depend on how much you earn and where you derive your income from. Rates can also vary between residents and non-residents. For example, Portugal operates a progressive income tax system, with the top marginal rate set at 48 percent. However, non-residents will pay a flat rate of 25 percent on their Portuguese income.

Portugal’s standard corporation tax rate is 21 per cent, falling to 17 per cent for the first $30,000 ~ earned by SMEs. Additionally, companies may face a 1.5 per cent surcharge levied by the local authority and extra charges on large profits.

Expats should also be aware of their potential obligations toward social security and the VAT burden, which stands at 23 per cent on most goods – higher than most European countries.

Do I need health insurance in Portugal?

Portugal has a public health system, and international residents working and living in the country who pay into the social security system will have the same access to healthcare as Portuguese nationals. Some tourists and non-residents will have to take out private healthcare coverage, though those with an EHIC or GHIC should be covered during their stay.

Portugal’s public healthcare system is considered to be very good, ranking 22nd out of 89 countries examined by the Health Care Index. Separately, the WHO has ranked Portugal 12th in the world for healthcare, as per Internationalinsurance.com.

However, even if you are entitled to use the public healthcare system, you can still choose to use the private sector for your medical needs. Private healthcare in Portugal is comparably low, at around $32 a month, according to the Portugalist. As a result, some will opt to take out private coverage on top of their right to public healthcare to skip waiting lists and have increased access to English-speaking doctors and nurses.

Is Portugal a good country for expats?

Portugal is fast becoming one of the most sought-after destinations in Europe for expats. The country has a broad appeal, competing with Spain for those looking for a laid-back retirement destination while also having a strong offer to young professionals who want to jump in feet-first to Portugal’s burgeoning economy. The country’s incentives for investors and key workers are strong – and it remains eager to attract retirees who can contribute to the economy.

Aside from the sun-soaked beaches and all the benefits of kicking back on the Iberian Peninsula, expats can benefit from a lower cost of living and potentially save money on health insurance and taxation. However, parents who want their children to attend international schools should account for the added cost in their budget and plan ahead.

Overall, Portugal presents a balanced mix of economic opportunity, quality of life, and affordability, making it an attractive destination for Brits looking to relocate. With the proper planning and understanding of the country’s systems, expats can look forward to a fulfilling and enriching experience.