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Living Working and Retiring in Portugal

Considering a move to Portugal? 

Portugal is a dream destination for thousands of international visitors but it is also an ideal country to relocate and call home, whether you are on a working visa or are considering your future retirement plans. The first step when moving to any new country is intensive and thorough research. In this guide, we will attempt to cover the most important areas to consider and provide an overview of what it is like to live, work and retire in Portugal. The guide will also cover the average cost of living, healthcare, and how to go about finding your new forever home or an investment opportunity that will secure you a residency permit. 

Visitors can expect a lot of contrast and diversity depending on where they chose to base themselves in. From picturesque little towns and villages to popular coastal areas, and buzzing urban centres, Portugal seems to pack in a lot for such a small country. With the Atlantic coast framing the country to the west and a long border with Spain in the east, it occupies 16 per cent of the Iberian peninsula. Despite its small size, it is well balanced, with beautiful mountains, vast plains and a charming coastline. So, whether you are a nature lover or prefer to lounge in a resort for 3 months, you will find what you need. 

A major tourist hub

As a holiday destination, Portugal has always been at the top of the European list, welcoming more than 16 million visitors in 2019. This means that a huge part of its economy is based on tourism. Lisbon, as the capital city, is a vibrant and exciting place to call home, with cultural activities, theatres, restaurants, stunning beaches and a range of activities to suit all preferences. At the same time, it is one of the most expensive options compared to the rest of the country. 

Porto, further up the north coast, is the second-largest city in the country and famous for its exquisite wines, architecture and is slowly establishing an active start-up scene, that would suit entrepreneurial-minded people and digital nomads perfectly. The southernmost region of Algarve is all about the stunning white sand beaches and excellent weather, so if you are looking for the warmest spot in the country, look no further. You will have to share your slice of paradise with countless tourists over the summer season, but this also makes commercial real estate in the area a great investment opportunity.

Living Working Retiring Portugal
Santa Cruz, Portugal

Living in Portugal Overview

Most popular cities: 

Lisbon, Porto, Braga, Algarve (region), Madeira Islands 

Similar countries: 

Spain

Challenges

  • Bureaucracy 
  • Learning the language is hard 
  • High unemployment compared to other EU countries

Advantages: 

  • Amazing weather 
  • High quality of life 
  • Close proximity to main European hubs 

Quick tips: 

  • Locals speak good English 
  • People are very friendly and open towards foreigners 
  • The Mediterranean and Portuguese style favours a slower pace of life and work that might take some getting used to 
  • Real estate prices are steadily rising as more people are considering moving here
Living Working Retiring Portugal
Living Working Retiring Portugal

Lifestyle 

Portugal is typically grouped with other southern Mediterranean countries that are described as open, friendly, laid back and sociable. Every region has its own local celebrations and traditions, and there are various customs that you can look forward to experiencing.  

One of the most attractive features of Portugal is how easy it is to reach other areas of southern and central Europe. At the same time, being right on the Atlantic coast means travelling to North and South America is equally hassle-free. But even if you plan to travel domestically the options are endless. 

When it comes to religion, Portugal has been a predominantly Christian country and the Catholic church still dominates, with more than 81 per cent of the population identifying as Roman Catholic. However, there is no state or official religion.

Living Working Retiring in Portugal
Lisbon, Portugal

Working 

Just like every other country in the European Union, relocating to Portugal will be vastly different if you are coming with an EU passport or from elsewhere. Non-EU passport holders will have to go through the process of obtaining a work permit in order to legally reside in the country. 

The unemployment rate in Portugal is slowly decreasing in the last five years, but it is still relatively high compared to other European countries. In 2019, the rate hovered around 6 per cent, registering only a slight 0.6 per cent decline from 2018. There are many international companies based in Portugal, and those with a background in tech, IT and online or digital marketing in general, will find it easier to break into the job market. If you plan on staying for a while, learning Portuguese will be of great benefit. Just like in other EU countries, obtaining a work permit as a foreigner requires a job contract or offer to be in place before you can legally reside in the country.

Taxes in Portugal: 

The tax system is never fun to navigate! Even more so in a different country or language. Portugal struggled after the Great Recession of 2010-2014 and plans to reverse the brain drain have targeted returning residents and Portuguese emigrants with significant tax breaks in order to stimulate economic growth. For foreigners, Portugal also introduced the non-habitual residence (NHR) scheme, that has proven very popular for attracting international talent and digital nomads. For those that meet the eligibility criteria, they can retain a flat 20 per cent tax rate for their first ten years of residing in the country. This is a massive difference from the 48 per cent that is currently the income tax bracket for the highest earners and comes with a range of additional benefits.

Cost of Living 

Cost of Living

Healthcare 

Overall, Portuguese healthcare ranks higher than neighbouring Spain, Italy, the United Kingdom and Ireland. The latest Euro Health Consumer Index available for 2018 has ranked Portugal on the 13th spot. Short term visitors from the European Union that hold a European Health Insurance Card (EHIC) are eligible for free public healthcare for up to 90 days. This is not the case for British nationals, since after Brexit the European Health Insurance card is no longer in effect.

Real Estate and Housing 

Finding an apartment or house to rent in Lisbon or another one of the most popular cities can be a bit of a struggle. Moreover, the average Portuguese salary is often insufficient in covering rent prices in cities like Lisbon. This is why locals have been forced outside the urban centres, which were instead repurposed for short term tourist accommodation options. At the same time, if your salary or retirement plan comes from a country with a higher buying power, then you might find you can enjoy a more luxurious style of living. 

Between 2010-2014, Portugal faced a rough financial crisis, and the global pandemic is set to stunt recovery. However, house prices are continuing to rise, especially in Madeira and Algarve as well as parts of the northern region. Finding a suitable house to rent might require a bit of extra work in the beginning. You can always enlist the help of a local real estate agency because everything moves fast and you have to be ready at a moments notice.

Browse a wide selection of available properties here

Living Working Retiring in Portugal
Algarve, Portugal

Retiring 

When it comes to the Brits, Portugal has always been a popular retirement option, a fact that the Portuguese government will continue to encourage even after Brexit has created its fair share of challenges. Specifically, Portugal has announced that all healthcare, pension credits and professional qualifications will continue to be accepted just like before so for now, it seems like Portugal is still one of the best options for Brits looking to retire in Europe. 

One of the best programmes available to non-EU residents looking to retire to Portugal is the Golden Visa Scheme. As a stable market with good long-term potential, it is a preferred choice for passport entry into the Schengen Area. Launched in 2012, the programme has allowed more than 20,000 individuals and their families to reside in Portugal legally. In addition, Portugal offers residency perks after a set amount of years, opening up opportunities for individuals for the rest of the EU countries as well. In 2021, the government is expected to set forward new guidelines, limiting the locations that are eligible for the programme, and increasing the minimum value of investments that is currently at  500,000€, especially in the popular region of Algarve.

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