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Living in Portugal: the cheapest country in the world to live

6 de January, 2023

Living in Portugal: the cheapest country in the world to live

Portugal tops the list of the cheapest countries in the world, and is especially suitable for American citizens who want to change their lives.
Reading: 12 min

Forbes Magazine has confirmed what we have long stated in our articles: Portugal tops the list of the 10 cheapest (and best!) countries in the world, and is especially suitable for American citizens who want to leave the country and change their lives. The Forbes statement is based on data from International Living, a respected publication among expats. Previously, the InterNations community had already placed the country at the top of the ranking at the European level. Recently, Condé Nast Traveller magazine completed the discourse.

The strength of the dollar (worth more than the euro) encourages decision making. To complete the picture is the ease of residing legally in the country. Besides a wide variety of visas (see below), Portugal also has its Golden Visa program. When buying a property worth from 280K Euros (after all, you will need a home) the investing family almost automatically receives a residence permit. Much simpler than in other destinations.

Despite its compact size, the country offers something for everyone. From vibrant cities like Lisbon and Porto with bustling nightlife, culture, history and culinary delights. To coastal paradises along the Atlantic Ocean, where camel-colored sand meets turquoise water embellished with jagged rock formations, caves and grottos. For simpler living, head inland, where medieval villages of stone houses sit beneath ruined castles and emerald hills of farmland dominate the stunning views beyond.”

(Terry Coles, editor of International Living)

Find out what International Living has to say about Portugal

Why do Americans want to move to Portugal?

Portugal is more than fashionable. It has attracted mostly retirees and digital nomads. But not only. More and more families choose to raise their children in a safe place with access to good universities. Anticipating old age, they also choose the country because of its free health care. You never know what will come next…

The desire to migrate is not just about finding a cheap alternative. The publication states that Portugal “is for people who are tired of the 9am to 5pm routine and want to find the cheapest places to live in the world, countries where the cost of living is considerably lower than in the United States – so cheap that you may not have to work.”

The Portuguese way of life is especially tempting for those looking to slow down, get away from the big traffic jams, the violence, the political extremisms, the stressful work routine. It is perfect for those who want to experience a more tranquil way of living life. All of this with safety and a great climate and gastronomy.

In addition, Portugal is at a safe distance from Ukraine, is well served by airports and has several direct flights to different American cities. To top it off, Portugal is the seventh best English-speaking country in the world.

“The geographical diversity of the Iberian country – with its stunning seaside enclaves and opulent castles, its tranquil countryside and its bustling big cities – appeals to anyone, regardless of age. But it seems especially optimistic for aspiring retirees in the United States , where health care costs are rising, inflation rates are climbing, and the lingering economic impact of the Covid-19 pandemic persists-all of which are eroding many people’s retirement eggs.”
(Chrishan Wright, Condé Nast Traveller)

How many Americans live in Portugal?

The numbers are not very precise or up-to-date. But you only have to walk through cities like Cascais to hear more and more English with an American accent being spoken on the streets.

According to reports from INE, the National Statistics Institute, about 7,000 Americans were living in Portugal in 2021. The data also points out that the number of Americans who applied for a residence permit in the country in 2021 was more than double that of 2020. And almost four times more than in 2018.

This is a community that is growing exponentially in the country. Official figures for 2022 have not yet been published, but the expectation is that this number will double again compared to the previous year.

Golden Visa reports also confirm the increase in US interest in Portugal. In 2019, 65 residence permits were granted. In 2021, 102. And in 2022, through November, there were 192, permits for principal applicants (aggregate family members are not included in this number).

In short, by 2022, the number of American Golden Visa Portugal investors has more than tripled compared to 2019. Coincidence? Never!

YearResidence Permits for Americans
201965
202075
2021102
2022192 (until November)

Source: Sef.pt

The United States is discovering Portugal. Until a few years ago, it was an unknown country and there wasn’t much notion of it being a European country. The reality has changed profoundly and now Portugal is on the map for North Americans. It is identified as a safe country, with good quality of life and also to live and work in. “Americans like what they see. Portugal has history and culture, privileged climate conditions, hospitality, and the Portuguese in general speak English. There are also many places that are still virgin, like the Alentejo Coast and the Douro

(Graça Didier, General Secretary of the American Chamber of Commerce in Portugal)

How many American tourists visit Portugal?

The increase in the number of North American tourists in Portugal is another fact to be highlighted. The growth trend predates the pandemic, as shown by the INE – National Institute of Statistics in Portugal. In 2019, the country received 1,202,247 guests from the United States, almost double that of 2017. In 2022, the first year of post-pandemic normalcy, that same number of visitors was reached before the end of September. Lisbon is the most popular city.

TheUnited States is already Portugal’s first non-European tourist market. And the third worldwide, only behind the United Kingdom and Spain.

Some of these Americans are here for a prospection visit. They tour different Portuguese cities with the intention of choosing the one that best fits the family’s profile. Some give up. Others come back to stay.

Where do Americans live in Portugal?

Lisbon and Porto, the largest cities in the country, are strongholds for most foreigners. In the specific case of Americans, destinations such as Cascais, Oeiras, the Azores, and the Costa Vicentina are also usually very popular, especially with Californians. These are places with beautiful beaches, good weather, surfing destinations, and paradisiacal sceneries. This is what Idealista, an important site for selling and renting in Portugal, states.

Of course Lisbon also stands out in the preferences. As the Expresso newspaper reported, North American citizens were the foreigners who bought the most properties in the Lisbon ARU in 2021. They were ahead of the French, Chinese and British. They spent €134 million on residential properties, which represented 15% of the total market.

Two years ago, Braga was at the top of the list of the best Portuguese cities for Americans to live in, according to the European Best Destination.

And the Algarve is still the destination of many foreigners who like the sun and heat. It is also a stronghold of golfers and luxury vacationers. Thanks to Faro airport, its access is fast and simple. Which makes it a popular destination for vacation property

How much does it cost to live in Portugal?

Portugal is an amazing country in many ways. Yet many Americans are unaware of all these qualities until they start researching. And the cost of living is usually ground zero in those searches. “Can I live well in Portugal with the money I’ve saved in the United States? Then let’s find out what it’s like to live in Portugal…”. And so begins the story of many of our clients at Atlantic Bridge.

The cost of living in Portugal is low compared to other countries in Europe. And even more, compared to the United States of America. This is because wages are not high in Portugal either, and most of the local population has a simple standard of living. The Portuguese minimum wage in 2023 is 760€.

Lisbon x San Francisco x New York: Comparison of Living Costs

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

A couple can live well (including house rent) on about $2,800 per month.

For those who live alone, about $2,000 per month is required.

If you live in your own property, you will need less, since rents make up the largest part of your budget.

How much will rent cost in Portugal in 2023?

Prices vary greatly according to the city chosen. Living in Lisbon, Porto and Faro is more expensive.

We have prepared a table with average property rental values per square meter in some of the favorite Portuguese cities for Americans.

CityAverage cost of rent
Lisbon18€ / m2
Porto14,7€ / m2
Faro9,4€ / m2
Braga7,4€ / m2
Cascais17,7€ / m2
Setúbal9,7€ / m2
Oeiras13,6€ / m2
Albufeira10,9€/ m2

Source: Idealista.pt

10 Good and Cheap Cities to Live Well in Portugal

How can an American live in Portugal?

There are many ways to legally reside in Portugal. If you plan to spend more than 3 months in the country, you will need a visa. To apply for any of them, you must have a clean record. That is, you must not have been convicted of a crime that in Portugal is punishable by a prison sentence of more than one year. You must also have travel insurance and prove that you can afford to stay in the country for 12 months.

We list below the most common visas, especially among Americans, and present what the most important requirements are for applying for each one.

D7 Visa – The Retirement Visa

The Passive Income Holder Visa is the most popular visa for Americans who wish to live in Portugal. It is not only for people who are retired. It is valid for anyone who has passive income. That is, income from rental properties, farms, company dividends or financial investments. These incomes must be duly proven in order to apply for a visa.

The minimum income required is low by American standards. For a single adult, it is necessary to show that he/she receives the equivalent to a Portuguese minimum wage: 760€. For the rest of the family it works like this: 2nd adult, 50% of the current minimum wage; children under 18 and dependent children of legal age, 30% of the minimum wage each.

It is worth noting that the more income you can prove, the more chances you have of getting your application approved. Overall, the D7 visa is very popular and has a simple process.

Check out our FAQ about the D7 Visa

Digital Nomad Visa

This visa, created in 2022, has everything to be the most sought after of all. In times of home office, working from abroad has been the dream of many people. Even better if it is in a cheaper country than the one where your salary comes from.

For the Digital Nomad Visa, the requirements are also simple. Subordinate or self-employed workers are eligible. One of the following documents must be presented:

Employment contract;
Promise of employment contract;
Declaration of employer proving the employment relationship;
Contract of partnership;
Contract for the provision of services;
Written proposal for a contract for the provision of services;
Document demonstrating services provided to one or more entities.

The minimum income required is 4 x current minimum wage. In 2023, the value is 3,040€. You must also make a deposit in Portugal to prove that you have means of subsistence. The amount to be deposited must be 12x the minimum wage in force: 9,120€ for the main applicant, 50% of this for the spouse, plus 30% for the children.

Study Visa

Another thing that Americans are realizing is that studying in Portugal can be an interesting alternative, both for themselves and for their children. University tuition is more affordable than in the United States, and there are many quality schools. Some of them have classes in English, as is the case of Porto Business School. Therefore, some choose to spend some time studying in the country as an initial experience.

To apply for a Study Visa, the candidate must have already been accepted at a higher education institution, for a course of more than 3 months (temporary visa) or 12 months (residence visa). For this visa it is also necessary to prove that you have the financial resources to stay in the country. The rule is the same: 12 x 100% of the minimum wage for the main applicant, 50% for the spouse, plus 30% for the children.

D2 visa – For entrepreneurs

The D2 Visa is intended for people who want to undertake and invest in Portugal. And also to autonomous professionals, who already have a contract or an offer to work in Portugal within a liberal profession, such as lawyers, architects, biologists, veterinarians, doctors, psychologists, etc.

For this type of visa you need to prove that you have the capital to make the necessary investment and to maintain your enterprise. It is worth elaborating a complete business plan, which shows the viability of the project, to facilitate the approval. Besides, having your business already formally constituted in Portugal is another favorable factor that increases the chances of visa approval.

In the case of liberal professionals, it is essential to have an employment contract or a written proposal for a contract to provide services within the scope of their liberal profession. Proof of your qualifications is another common requirement in most professional fields.

Here you also need to show that you have the financial resources to stay in the country, following the same rule as for the other visas.

D3 Visa – For highly skilled professionals

Aimed at highly qualified professionals: managers and specialists in intellectual and scientific activities.

To apply, you must have an employment contract with a Portuguese company for an indefinite term or for at least 1 year.

The remuneration stipulated in the contract must be at least 1.5 times the national average gross annual salary or three times the social support index (IAS)*. For employment in occupations considered to have a particular need for third-country national workers, 1.2 times the national average gross wage, or twice the value of the IAS is required. In 2023, the value of the IAS is EUR 480.43. Thus, the applicant must have a monthly salary of around €1,560.

Once again in this case you need to show that you have the financial resources to stay in the country, following the same rule as for the other visas.

Is the Golden Visa a Portuguese Green Card?

The Golden Visa is not a green card. It is a popular path among foreigners who wish to reside legally in the country.

Unlike the Green Card, the Golden Visa grants a temporary residence permit (RA). This authorization is obtained in exchange for qualified investments in Portugal. In other words, the Golden Visa is an investment program that grants your investors and family members permission to reside in the country. One of these eligible investments is the purchase of the house where you will live in the country.

After 5 years of legal residence in Portugal, the American may be able to obtain his permanent residence permit, or, if he is qualified and speaks Portuguese, he may finally become a Portuguese citizen.

Does the Golden Visa give you Portuguese citizenship?

Yes and no. Let’s go in parts.

The Golden Visa gives you a residence permit in Portugal, and after a period of 5 years of residence, the applicant can apply for citizenship, if he/she meets all the requirements. One of them is to know a little Portuguese.

The advantage is that the Golden Visa investor is not required to reside in Portugal for these 5 years. He only needs to prove a stay of about 7 days per year to stay in the program.

And what is the advantage of this? Well, let’s say you plan to live with your family in Portugal, but not right now. Let’s say you need to finish that doctorate, or wait until your children are ready to enter university. You can invest now and move to Europe when you become a citizen.

It is worth noting that the Portuguese passport holder can travel without a visa to 187 countries. And the Portuguese citizen can also live, work and study in any of the European Union member countries.

Learn how to invest in Golden Visa Portugal

There are many reasons why so many foreigners choose Portugal as a destination to start over in life, or simply to live new experiences for a period of time. If you are considering living in Portugal, talk to our consultants and find out what is the most appropriate path for you!

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Author:

Atlantic Bridge

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