The low cost of living lights up any financial conversation.
Meet with a group in the Financial Independence community, and Portugal will come up in the conversation.
No less than a half dozen people were talking about Portugal at the local coffee shop meet-up this weekend. Each time I meet people in this community, the topic comes up.
Everyone who spoke about Portugal had either visited or had plans to visit in the next few months. One person was planning to move to Lisbon in the next few months.
I’ve never been to mainland Portugal, although I did live in the Azores for three years. The tiny island I lived on was way out in the middle of the Atlantic, and while it was beautiful, it was not the same as the mainland.
What’s so appealing about Portugal?
Portugal Golden Visa Program
The Golden Visa program launched in 2012, but the pandemic in 2020 catapulted this path to residency and citizenship to the forefront. Suddenly people could work from anywhere, and Portugal offered a relatively low-cost program with an opportunity to achieve a return on investment.
Brexit severed the United Kingdom from the EU, and since that time, members of the nomadic community have been seeking Golden Visa programs to get access to travel in the EU Schengen zone.
Other countries with residency programs, including travel access to the EU Schengen zone, include Cyprus, Germany, Cyprus, Spain, and St Lucia.
China, Brazil, Turkey, and South Africa had the most applicants in 2021. The United States is playing catch up, and applications in 2022 are on pace to track China. Applications from the US now account for 20% of the annual market.
The popularity of the Portuguese program is on the rise despite significant changes restricting private residence investments in popular areas, including Porto, Lisbon, and Faro. The Portuguese government made these changes to promote investment in the interior and low-density regions, which also includes Madeira and the Azores.
Several investment options qualify for the Golden Visa program. The most popular include buying or rehabilitating residential real estate.
A purchase of €500K or a rehab project of €350K meets the investment requirement. These investment requirements are discounted by 20% (€400K and €280K) if the residential property is located in a designated low-density area.
The Golden Visa provides a five-year path to permanent residency and a path to citizenship, with minimal requirement of time in the country. Those accepted into the program must stay in Portugal for at least seven days each year.
Cost of Living
Almost everything, except gasoline and cars, costs less in Portugal than in the United States. My Life Elsewhere provides a comparison that claims the US is over 80% more expensive than Portugal.
Nomad List breaks down the cost of living in Lisbon, and an expat living long-term in the city can expect expenses of less than $1,800 per month.
There are low-cost areas in the United States, but for those moving from large metropolitan areas, Portugal significantly reduces living expenses.
Freedom to travel in the EU
Residents of Portugal can travel freely in the EU Schengen zone. This zone permits visa-free travel and includes 26 countries in the European Union.
This is a tremendous benefit, as non-EU citizens visiting the Schengen area can only stay for 90 days and then must be out of the region for 90 days before returning.
Permanent residents and applicants who receive the Golden Visa from Portugal are eligible for the Portugal National Health Service. An expat must contribute to Portugal’s social security program to qualify for the national healthcare program.
Private insurance is also available at much more affordable rates than in the US.
For those who are short-term visitors, travel insurance is the only option.
Human Rights and Safety
Many people worry about their safety in the US. Portugal ranks #16 on the US News & World Report safest countries list. The United States is much lower on the list, coming in at #38.
News headlines of repeated gun violence and deteriorating human rights in the US motivate some people to look elsewhere.
Portugal has a long history of human rights actions, including abolishing slavery in the 18th century, abortion rights, and same-sex marriage rights.
The safety and human rights issues may not be top of mind for everyone, but those that find these issues most important are drawn to Portugal.
I think the biggest reason people in the FI community like to talk about Portugal is the perceived investment opportunity, low cost of living, and low cost of medical services.
Recipients of the Golden Visa also benefit from visa-free travel within the EU Schengen zone. The benefit is most important to those who intend to live a nomadic lifestyle in Europe.
The safety and human rights record of Portugal is a driver for some. Sadly, some people have become disillusioned with life in America.
Many people start with a visit to Portugal, and everyone I’ve talked to seemed to enjoy their experience. Those seeking residency through the Golden Visa program will find a lot of effort required, and the process moves pretty slowly.
Portugal made little progress processing Visa requests in the first half of 2022. The government organization SEF went through a restructuring process that stopped progress on all requests.
Despite the restrictions limiting residential investment in the interior region and processing delays for visa requests, demand is high in 2022. This is especially true for applicants from the United States.
Expect to hear more conversations from your Financial Independence community friends about Portugal in the future.
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