Comparative analysis of Portugal and Spain. What is the best country to live in? Cost of life, taxes, visa application and more.

Last Updated on January 17, 2022 by Lea Melo

Moving to the south of Europe is a dream for people from all over the world. Let’s have a deep look at which country is better specifically for an expat to live in, Portugal or Spain.

Generally, both countries are similar to a great extent be it the climate, way of life, people, food, landscapes, and a lot more.

However, some major differences make both the neighboring countries rivals for quite a long time. And the differences which make one expat think about choosing a better one for his residence.

Portugal or Spain? Why expats choose them

Expatriates are away from their homeland, leave their comfort zone for the desired opportunities and luxuries they are somehow not getting in their homeland. Both Spain and Portugal are idealized in the mind of the world as Iberian paradises, of sun, food, and human warmth.

But with the relocation process, there are some concerns to consider. For example, quality and cost of life, tax benefits, visa application, and few others, on which one won’t compromise.

The world is full of possibilities. You can go anywhere and settle, coping with the cultural shocks. However, expat life may be exciting at one end and challenging on the other end. But what is your dream destination, Portugal or Spain?

Differences between the countries

Given below is the comparative analysis for those who are deciding to come and live in Western Europe. We are considering the two charming options, either Portugal or Spain.

Natural border between Portugal and Spain

Let’s talk about some key factors that may be in consideration if an expat is thinking of coming and living in either of the two countries.

Cost of living in each country

The first and major thing anyone will consider is the cost of living. Living in Spain isn’t out of reach, but the cost of living in Portugal is a fraction cheaper.

Lisbon and Porto are the most expensive cities in Portugal. However, the cost of living there is not higher than that in Madrid or Barcelona. From food to residency, Portugal usually offers you many more affordable rates than Spain.

Take a look at the comparative summary of costs of living in Portugal and Spain, according to the official Numbeo data.

ExpensesPortugalSpain
Family of four estimated monthly costs (without rent)1,870.80€2,153.29€
A Single person estimated monthly costs (without rent)533.23€609.82€
Apartment Rent (1 bedroom) in City Centre581.25€ 647.82€
Apartment (3 bedrooms) in City Centre997.94€1,010.92€

Also, if you are not going to live in big cities and are looking for calmer smaller towns, the rents in Portugal are even much lower than that of Spain.

Labor market in Portugal and Spain

But from the salary point of view, Portugal does not offer a great salary as compared to Spain. The job market in Portugal is known for being very competitive. On the other hand, Spain has a stronger economy and higher-paying jobs. Get to know a few facts about work in Portugal and Spain.

DataPortugalSpain
Minimum wage (monthly) in 2022705€965€
Average salary (monthly)1.314€2.000€
The unemployment rate in 20206,9%15,5%

Both in Portugal and in Spain, the areas of IT, information technology, and biotechnology are on the rise. The labor market in both countries is also more competitive after the coronavirus pandemic. Even so, working conditions are good and telecommuting is increasingly widespread.

Transport

Moreover, the fuel prices are relatively higher in Portugal than in Spain. The national roads in Spain are also of better quality than in Portugal, and almost no tolls are paid.

Although both countries offer better quality and standard of living and give easy access to the healthcare and comfortable transport system.

But, with the more confident and growing economy, Portugal offers many reasonable opportunities towards education, health, and transport system as that of Spain.

Climate

While setting up in other countries, climate may be considered among the major factors.  Also, health is highly dependent on the climate in which a person is living.

Expats living in Lisbon Portugal

Weather conditions in Spain are variable, in some regions it goes from extreme hot to extreme cold. While Portugal faces more uniform weather, with the summers experiencing high temperatures and cool sea breezes, and wet warm winters. Usually, the weather in Portugal pleases expats more often than that in Spain.

Security

Both countries are safe to live in as there is not a huge amount of violence. Although there are street crimes, people do get robbed, get their car stolen, wallet pinched, bag snatched, all of those things that happen in European countries do happen in both these countries as well.

But from a security point of view, both countries are safe to live in as there is no gun culture and no crimes related to alcoholism. Although from the few years Spain did face terrorist attacks, had a problem with the terrorist groups in the past, it is a peaceful place to live.

On the other hand, Portugal had never experienced any such terrorist attacks ever. But that risk did exist across the whole of Europe.

According to the Global Peace Index 2021, Portugal is the 4th safest and most and peaceful country to live in. In that same ranking, Spain shows up at the 31th position.

For a complete analysis of what it is like to live in Portugal, read also the updated Complete Guide to Live in Portugal.

Immigration Law

Being a member of the Schengen Zone, both countries have the same visa values and immigrants need to go through a similar process and rules to get a permanent resident permit.

However, the Golden Visa rules slightly vary.

Permanent Residence in Portugal can be obtained in five years after the Golden Visa is granted, and the citizenship can be applied for the year after that. While in Spain it’s a bit of time taking process as citizenship can be applied after at least 10 years of life in the country.

Taxes

Let’s talk about the biggest concern for an expat to choose between Portugal and Spain, that is without a doubt taxes.

Expats living in Barcelona Spain

Portugal offers great tax benefits for the expats by exempting them from paying tax for the first 10 years of residence and then paying tax on 20% flat on your Portuguese income. On the other hand, Spain does not offer any leverage over taxes.

Get a Complete Analysis of the Non-Habitual Resident Regime in Portugal in our full article.

Moreover, the constant change in tax rules affects the expats more than their local citizens.

Bottom Line: Portugal or Spain?

To wrap up the comparative analysis on Portugal and Spain, a lot of people tend to think that both countries are similar, but the deeper you dig it’s not the case.

Portugal being smaller in population and area offers more advantages to expats, as compared to Spain. Affordable living, residency, easy access to social activities, pleasant climate throughout the year makes Portugal more preferable than Spain.

However, each persons has their own experience and perspective on the two countries.

It is impossible to say that one is better than the other, or prettier or richer in culture. They’re just different, and it’s definitely worth getting to know them both.

If you need help relocating to Portugal, you can count on Viv Europe to guide you. Contact us and tell us how we can be of service. We will love helping make your Portugal project a reality.

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