Portugal or Spain? Compare which country is better for expats to live in

Last Updated on November 22, 2022 by Maryam Siddiqui

It’s always been a difficult decision to choose between Portugal and Spain. Moving to the south of Europe is a dream for many people. Let’s do an in-depth analysis of which country fits an expat’s ideal lifestyle better, 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. Read all about living in these countries and choose the best one for yourself! 

Portugal or Spain? Why expats choose them

Expats make a difficult decision to be away from their homeland. Leaving their comfort zone for the desired opportunities and luxuries they’re 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 a 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 on one end and challenging on the other end. But what is your dream destination, Portugal or Spain?

Differences between the countries

While both countries are similar in some regards, you’ll find many differences between the culture, everyday life, and even the meals they eat. From different ways of greeting people to what language they speak most commonly, you should be aware of the contrasting lifestyles. 

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

Let’s talk about some key factors that expats think of when considering living in either of these countries.

Cost of living in each country

The first thing to consider when relocating to a new country is undeniably 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 lower than that in Madrid or Barcelona. From food to residency, Portugal usually offers you many more affordable rates than Spain.

A single person’s monthly expenses are nearly €100 cheaper and can mean even more savings if you choose to live away from the city centers. That’s one major reason why expats tend to choose Portugal. 

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

Estimates are from Numbeo (as of November 2022). 

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

Some expats even prefer to live in smaller towns, not just because of cheaper rent, but also because of the privacy and peace. 

Labor market in Portugal and Spain

Here is one difference that can spark some second-guessing in the minds of expats. Although the locals and expats can live reasonably well on a budget in Portugal, the labor market isn’t as evolved as in Spain.

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. 

Despite Spain’s strengths, it still has a very high unemployment rate of 12.67%, which is more than double of Portugal and way above the advised normal average of 5%. 

Look at the table to get to know a few facts about work in Portugal and Spain.

In both Portugal and Spain, the areas of information technology and biotechnology are on the rise. The labor market in both countries is currently more competitive than before. Even so, working conditions are good, and telecommuting is increasingly widespread.

Portugal also offers an easier way out for digital nomads that want to enjoy living here. Through the new visa for digital nomads, expats no longer have to worry about setting up a business or proving passive income resources to work remotely in Portugal. 

Transport

Like we’ve mentioned earlier, both countries offer good quality and standard of living. This also means that there is easy access to healthcare and a comfortable transport system. 

Portugal’s public transport consists of the metro, trams, buses, and trains. Lisbon and Porto are the only two metropolitan cities that are facilitated with well-connected metros. In other parts of the country, it’s easy to travel by bus or tram. 

Moreover, the fuel prices are almost the same in both countries, €1.76 per gallon in Spain and €1.78 in Portugal. The national roads in Spain are of better quality than in Portugal, and almost no tolls are paid.

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

Climate

While setting up in other countries, you may consider climate among the major factors.  Also, health is highly dependent on the climate in which a person lives.

Spain’s weather conditions vary; 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 in Spain.

Take a look at the table to understand what the average temperature looks like throughout different seasons. 

Data from the Climate Data website.

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, their wallets pinched, and bags snatched, and 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 for a few years, Spain did face terrorist attacks and had a problem with 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.

With that being said, according to the Global Peace Index, Portugal is the 4^th safest and a peaceful country to live in. In that same ranking, Spain shows up at the 31^st position. So there is a significant difference, even if a commoner might not notice the difference in everyday life. 

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

Immigration Law

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

However, the Golden Visa rules vary slightly.

Permanent Residence in Portugal can be obtained within five years after the Golden Visa is granted, and 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.

So in case you’re looking for permanent residency, there’s quite a difference between Portugal and Spain.

Taxes

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

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

The Non-Habitual Tax Resident Regime is a major attraction for expats that want to focus on their savings for a few more years. It mainly targets individuals who fall into the category of passive income earners and highly qualified workers. 

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.

Culture 

Since some people like to know about cultural differences beforehand, we thought we’d let you know of the few major differences you’ll come across. 

In Spain, it’s common to greet each other with a handshake, while the Portuguese usually go in for a big hug. Of course, you can practice your own physical boundaries as you please, but the Portuguese are generally very friendly people. 

Another difference exists in the timing of meals; Spanish people might have a beer and a pincho de tortilla around 1 p.m. Whereas the Portuguese would be preparing to eat lunch at that time. Spanish would usually eat around 3 p.m. 

It’s also observed that Spain seems to be more culturally diverse. This is mainly due to the fact that Portugal gained popularity only fairly recently and Spain has been famous for more than just a few years now. And with Portugal’s popularity, people from all over the world have added to the country’s diversity, so you’ll fit right in no matter where you are. 

Bottom Line: Portugal or Spain?

To wrap up the comparative analysis of 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 is smaller in population, and the area offers more advantages to expats as compared to Spain. Affordable living, residency, easy access to social activities, and a pleasant year-round climate make Portugal preferable to Spain.

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

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

If you need more opinions, join our Facebook Group – All About Portugal For Expats and talk to people who made the same decision you’re about to. Once you’re ready to make this dream come true, contact Viv Europe and start your relocation process!