Why Move to Portugal and Main Cities to Stay
Why Portugal became the Nr.1 Country for Expats in Europe and where to go when moving there
Introduction
Welcome, anon! In the last Globe’s Guide, we covered Brazil, a sunny, tropical country in Latin America. In this Globe’s Guide, we will cover another country with a lot of sunshine, but in Europe. Coincidentally, this is the country from which Brazil originated: Portugal.
Today we’ll cover:
Geography and Weather
Demographics and Life in Portugal
Portugal as a Business and Travel Hub
Cons of Portugal
Main Cities and Places to Stay
Let’s go!
Geography and Weather in Portugal
Mainland Portugal and the autonomous regions of Madeira and the Azores in dark green.
Portugal is an EU country at the very southwestern end of Europe that has seen a massive surge in interest from nomads and expatriates over recent years.
No matter what time of the year, the two main cities of Lisbon and Porto are always in the top ranks worldwide at Nomadlist, a popular aggregator for digital nomad hubs. Other locations such as Ericeira, Portimão, and Madeira also figure in the top 50.
This is, in no small part, due to the easy immigration process and two fiscal reasons:
First, the country's decision not to tax crypto capital gains, which is making it a sort of European crypto ‘safe haven’.
Second, but not less important, the Portuguese NHR regime, providing numerous tax advantages to expatriates. We will explore both of these in the coming weeks.
However, taxes aside, why are people moving to Portugal?
To start with, the weather is fantastic, perfect for those who want to avoid extremes. On the mainland, you have it just like in neighboring Spain: the more to the south you go, the warmer and more sunshine there is.
The average yearly temperature in the capital city of Lisbon is 17.5 °C, going down to an average of 11.6 °C in the coldest month of January and 23.5 in the hottest month of August. In the southernmost region of the Algarve, Faro has an average temperature of 18 °C, while Porto in the north has 15.1 °C. Never too hot, never too cold.
The autonomous Regions of Madeira and the Azores share a similar profile. There is an average temperature of 16.6 °C in both Madeira and São Miguel, the largest island of the Azores.
The same applies to sunshine. Portugal as a whole is a very sunny country. Lisbon has 2.806 sunshine hours per year, while Faro and Porto have 3.036 and 2.468, respectively.
To put it in perspective, southern Portugal has the same amount of sun as the sunny Mediterranean islands of Malta (3.034) or Cyprus (3.314).
Even Porto, however, shares a similar sunshine profile with many enjoyable cities, like Rio de Janeiro (2.187) or Salvador (2.443) in Brazil or Rome (2.473) and Naples (2.375) in Italy. The Azores too are very sunny (3.085 in São Miguel), whereas Madeira is already less than the mainland (2.095).
This great weather all around lets you really enjoy Portugal’s fantastic geography to the most. Besides the long coastline with amazing beaches for surfing, the country has an infinity of trails in its hills and valleys to hike, hidden lakes and rivers to swim in, as well as hundreds of historical castles, towers, churches, and museums to visit.
Demographics and Life in Portugal
Not only in climate and geography Portugal offers a great quality of life, but also in other aspects too.
Portugal is a member of the European Union, meaning that Portuguese residents have access to fintechs such as Revolut and Wise, crypto debit cards like from Crypto.com or Binance, payment processors like Paypal and Stripe, as well as Amazon delivery and many other niceties and services of European life.
Portugal is a modern country where you will find everything you need. It also has one of the most advanced personal freedom policies in the world. For example, activities such as prostitution and drug use are decriminalized and there are hardly any arbitrary restrictions on alcohol, homosexuality, etc.
Culturally and gastronomically, Portugal has lots to offer. Portuguese cuisine has many unique dishes, from pastries to codfish and the classic Francesinha (delicious calorie bomb, don’t recommend when cutting). And how could we forget the wines? World-class, with some delicious fortified variations in Port and Madeira wine.
This is complemented by the cuisines of Portugal’s many immigrant communities. With sizable immigration from Brazil, other European countries, India, Pakistan, Thailand, China, and Portuguese-speaking African countries, one can find top-quality restaurants from all around the world.
At least on paper, the majority of the population is Catholic (as can be noticed by the countless number of churches), with some minority communities of other religions. Besides the statues and churches, this Catholic influence can be seen in a number of local holidays and festivities.
Those concerned with safety can rest knowing that Portugal is an extremely safe country, ranked number 6 at the Global Peace Index and having one of the lowest homicide rates in the world.
It has also been named the “friendliest country towards foreign residents” and ranks 7th in the world in terms of English proficiency. This, coupled with the large nomad and expat communities in Lisbon, Porto, and Madeira, makes adjusting to life there an easy process.
Not only easy, but still quite cheap. Portugal has been getting more expensive due to the influx of nomads and expats, but it is still affordable to live in.
Median rents are at €730/mo for a one-bedroom apartment in the city center, which is 63% lower than the median rent in Europe.
This is more expensive in Lisbon, with an average of 1000€ for a one bedroom apartment in the city center
This is more affordable in Porto, at 720€ for a one-bedroom apartment in the city center.
Food and other expenses are also much cheaper than in Western European countries like the UK and Germany: Consumer prices in Lisbon are 25% cheaper than in Berlin and 40% cheaper than in London.
Portugal as a Travel and Business Hub
A not-that-important fact, but also worthy of mention: Portugal, like the UK, Iceland, and Ireland, is one of the only European countries in Western European Time (UTC).
This means that it is time-zone-wise the closest one can get to the Americas while being in Europe - especially relevant to European traders who watch the American markets. The Azores is even one time zone closer (-1) to the American continent.
Portugal also figures as a central location and flight hub for global entrepreneurs. Lisbon is a major international airport with connections to all over the world, being ideally located between Europe and North America.
It is unique in having direct connections (and shorter flights) to the Portuguese-speaking world.
From Lisbon, you can fly to multiple Brazilian cities and all of Portuguese-speaking Africa, including Angola, Mozambique, Cape Verde, São Tomé and Príncipe, and Guinea Bissau.
Porto is not too far behind, with connections to Europe, the US, Angola and the two major cities in Brazil, São Paulo and Rio de Janeiro.
The other airports of Faro, Funchal (Madeira) and Ponta Delgada (Azores) are already smaller but still widely connected to Europe and with direct flights to the US.
The existing flight, business, and diplomatic networks with other Portuguese-speaking countries make Portugal an ideal base for entrepreneurs and investors who want to be located in Europe but with a foot in the valuable emerging markets of Brazil and Africa.
Even as an emergency refuge, if there are wars, crises, or large-scale conflicts, Portugal and especially its islands, the isolated Azores or Madeira, not only offer warm weather throughout the entire year, but are also isolated, and have incredible nature and the ability to survive self-sufficiently.
Cons of Portugal
Of course, every country has its downsides, and it would be foolish of us not to mention them.
These are not things that should deter you from moving, but that you should definitely have in mind if you are considering Portugal as your place of residence.
First of all, Portugal is a bureaucratic country. The state is large, spends a lot and is highly in debt, with a 133% debt to GDP ratio.
Still, public services do not have the quality that they have in more developed European countries. Those concerned with their healthcare should consider if they want to rely on the Portuguese public health system.
For the average Portuguese citizen, the country looks nothing like a tax haven, with the top income tax rate bracket being 48%, not including social security contributions and surtaxes.
Coupled with the low salaries and high unemployment, it is not surprising that the country is experiencing massive emigration of its working-age population and a resulting brain drain.
While this does not affect those with WiFi Money under the special NHR tax regime which will be discussed in future posts, it is important to note that the tax benefits are only granted for 10 years.
Those who want to set up a base for their whole lives should consider if they would still want to stay in Portugal after the tax benefits are gone.
Lastly, a socialist government is currently in power. Although there is a tacit understanding that they should not completely abolish the crypto tax exemption or the NHR regime as that would kill the chicken that lays the golden eggs, you just never really know it with socialists.
There are currently debates on ending the crypto tax exemption, which should be voted on next year.
Here, the autonomous regions have an advantage again: Madeira and the Azores have their own, more pro-business governments.
Madeira, for example, recently announced at the Bitcoin Conference that it is following El Salvador in turning Bitcoin into legal tender on the island and that there will be no income taxes on the purchase and sale of Bitcoin.
During that conference, they also actively marketed the Madeira IBC as a place for doing business. So, while there may be socialists at the national level, the autonomous regions - especially Madeira - are still doing pro-innovation and pro-market moves.
Main Cities and Places to Stay
That covers the main attractives of Portugal (besides taxes) and some of the country’s drawbacks. From the introduction so far, you have probably figured out what the most important cities in the country are, but let us quickly go over the main destinations.
Lisbon is the political capital and largest city in the country, with a population of 2.8 million inhabitants in its metropolitan area.
While the city of Lisbon itself is a popular place for expats, the wider Lisbon region also has a number of smaller cities that are beautiful and cozier; popular for those looking for a quieter place with nice beaches, yet in proximity to a major urban area.
Some of the best examples of this category are the municipalities of Cascais, Sintra, Almada, Ericeira and Sesimbra. Here you have all you need for a good life, having a lower cost of life while being less than 1h away from the capital.
Porto is the second largest city of Portugal and the capital of the Porto district. With a population of 1.7 million inhabitants in its metropolitan area, Porto is a major industrial and financial center in Portugal and the wider Iberian peninsula.
Charming due to its beauty, Porto is smaller and less visited than Lisbon, while still retaining the advantages of living in a city. Just as in Lisbon, while the city of Porto does not have beaches, the neighboring smaller municipalities of Matosinhos and Vila Nova da Gaia have that to offer.
Like living in the smaller cities of the Lisbon region, you have a more chill, cheaper beach life, while having the conveniences of being close to a real city.
These are the only cities with a metropolitan population of over a million. Going over some smaller towns and places to visit in the mainland:
Braga, with close to 200 thousand inhabitants, is the third largest city and a historical and cultural destination in the north. It is a major stop on the Portuguese part of El Camino, being almost in Spain already.
Faro, with 60 thousand inhabitants, is the main city in the Algarve, a region which as a whole is a popular summer destination. The historical center is small and can be done in a day. You're here for the beach or as a connection to other Algarve cities. Take the ferry and enjoy bathing in the colder ocean or the warmer lagoon.
The whole Algarve region is great to visit. As mentioned above, the water is a bit warmer than in the rest of the country - not too much though, it is still cold compared to the Mediterranean or Caribbean. Main destinations besides Faro include Albufeira, Lagos and Portimão.
Coimbra, with close to 100 thousand inhabitants is renowned as a university town. The white city has an amazing historical center and a botanical garden worth visiting as well.
Aveiro is the Portuguese Venice. This is a romantic place, worth bringing someone with you. Take a boat ride through the canals and then go see the salt farms if you’re there. This place is too small to live in my opinion, but worth a day or two of visit.
The Portuguese mainland is absolutely beautiful and has far too many places to mention. However, when you have time, make sure to check out the following places as well:
Nazaré - Home of the largest waves
Évora - Historical city with a Roman temple
Peniche - Beach town
Óbidos - Lake & beach town
Hopping to the islands, Funchal, with 105 thousand inhabitants, is the capital of Madeira, an island with 250 thousand inhabitants and 801 km².
Madeira is an archipelago consisting of the islands of Madeira, Porto Santo the Desertas - Madeira being by far the largest, most populated, and economically important of the group. As one of Portugal's main tourist attractions due to the island’s exuberant nature and vineyards, Madeira has an active and organized digital nomad scene, being home to one of Europe’s first nomad villages.
The Azores are more complicated. The archipelago has a total area of 2.351 km² and a total population of around 236 thousand inhabitants. However, these are scattered across nine major islands split into three groups. As such, the region has three capitals:
Ponta Delgada in the island of São Miguel is the executive capital;
Angra do Heroísmo in the island of Terceira is the judicial capital; and
Horta in the island of Faial is the legislative capital.
The largest and most populous island is São Miguel, with 133 thousand inhabitants, and an area of 744 km². As mentioned previously, it is also home to the largest airport in the archipelago at Ponta Delgada. São Miguel is nicknamed “the Green island” for its exuberant nature.
The second most populous and third largest island is Terceira, with 53 thousand inhabitants and an area of 446 km².
The autonomous regions have islands of decent size and nice small cities, but are somewhat isolated. As such, they are more suited for those looking for a peaceful base and potentially a safe haven in case of wars.
Conclusion
This covers the largest and most notable destinations.
In the next post, we’ll get down to business and discuss Personal taxes in Portugal. After that, we’ll go through the main immigration options and how to obtain citizenship. For the last post, we’ll cover companies in the mainland and in the isles.
Stay toon’d!