Where Is the Best Place to Live in Portugal? Portugal has emerged as one of the most desirable countries in Europe for relocation, offering safety, affordability, and a high quality of life. But the answer isn’t always straightforward when considering the best place to live in Portugal. While Lisbon and Porto attract international attention, Madeira, Portugal’s autonomous island in the Atlantic, is quietly gaining ground as a preferred destination for retirees, remote professionals, and entrepreneurs. In this guide, we explore the strengths of Portugal’s top three living destinations (Lisbon, Porto, and Madeira) and why Madeira may be the ideal choice for long-term relocation.
Lifestyle and Daily Rhythm
Lisbon offers an energetic, cosmopolitan lifestyle. With historic neighbourhoods, Michelin-starred restaurants, and nonstop cultural events, it’s a dynamic city for professionals who thrive in a fast-paced environment. Porto, although urban, is more relaxed. It’s known for its authenticity, wine heritage, and growing arts scene. The pace is slower than in Lisbon, making it attractive for those who want city life without the hustle. Madeira, by contrast, is all about balance. The island offers a subtropical climate, low crime, and breathtaking nature, from forest-covered mountains to volcanic coastlines. Funchal, the capital, blends walkable urban convenience with a deeply peaceful atmosphere. It’s ideal for those seeking a healthier, slower pace without sacrificing infrastructure or opportunity.
Affordability and Cost of Living
While prices have risen in Lisbon and Porto, especially in the real estate market, Madeira remains more affordable in many areas, especially outside the Funchal city centre. Utilities, groceries, and local services often cost less than on the mainland. Although some imported goods may be slightly more expensive on the island, many residents find that the overall cost of living balances out — especially given the lower levels of consumption associated with outdoor, wellness-oriented lifestyles.
Climate Considerations
Lisbon and Porto both enjoy Mediterranean climates, but with significant differences. Lisbon is dry and hot in the summer. Porto is cooler, with significantly more rain in the winter months. Madeira offers something truly unique: a mild subtropical climate year-round. Temperatures typically range from 17°C in the winter to 26°C in the summer. This stability is a key reason why so many retirees and digital nomads are choosing to live here.
Business, Taxes, and Remote Work
Lisbon is Portugal’s startup hub, home to tech incubators and major international companies. Porto is catching up fast, offering lower operational costs and a creative ecosystem. But neither provides the tax advantages of Madeira.
Through the Madeira International Business Centre (MIBC), companies that meet specific conditions may benefit from:
- A 5% corporate income tax rate (until 2028)
- 0% withholding tax on dividends, interest, royalties (for non-resident shareholders)
- Exemption from local property taxes and stamp duty
- Full access to EU tax directives and Portugal’s treaty network
- For remote workers and entrepreneurs operating internationally, Madeira provides one of the most attractive fiscal environments in the EU.
Infrastructure and Connectivity
Despite being an island, Madeira is remarkably well-connected. Funchal International Airport offers direct flights to major European cities such as London, Paris, and Frankfurt. Road networks are modern and well-maintained. Digital connectivity is excellent, with widespread fibre internet and 5G coverage.
For professionals working remotely, Madeira combines international accessibility with digital reliability, all without the stress of mainland congestion.
Real Estate and Investment
Real estate in Lisbon is highly competitive, particularly in central areas. Porto remains more accessible but is experiencing rapid appreciation. Madeira presents an alternative, a growing market with strong potential for long-term value.Properties suitable for short-term rentals are in demand, and obtaining an Alojamento Local (AL) license can be more straightforward on the island compared to metropolitan restrictions on the mainland. Whether you’re buying a villa with sea views or a central apartment in Funchal, Madeira offers compelling investment value, especially for lifestyle buyers seeking residency, rental income, or long-term capital appreciation.
Healthcare and Education
Lisbon and Porto offer top-tier hospitals and a wider selection of international schools.
Madeira’s public healthcare system (SESARAM) is highly regarded, and private care options are expanding. For families, while international schooling is more limited, homeschooling and remote learning models are growing in popularity. Retirees and remote professionals typically find the medical infrastructure in Madeira more than sufficient.
Why Madeira Is Quietly Becoming Portugal’s Best Place to Live
While Lisbon and Porto continue to shine on the international stage, Madeira’s rise has been steady, strategic, and deeply rooted in the quality of life that makes it perfect to raise children. Madeira is increasingly the destination of choice for those seeking a calm, beautiful, and low-tax environment, without disconnecting from the world. Whether you’re a retiree seeking climate and calm, a digital nomad searching for nature and connectivity, or an investor pursuing long-term growth in a stable jurisdiction, Madeira offers a lifestyle difficult to replicate elsewhere in Portugal or Europe.
Ready to Explore Madeira?
Relocating to Portugal, especially Madeira, can offer extraordinary personal and financial advantages, but proper legal and tax structuring is essential.
We invite you to talk with our legal or tax advisors at Madeira Corporate Services.
Our team will help you:
Plan your move or residency
Structure your business for tax efficiency
Navigate property investment and compliance
Settle with clarity and confidence
The founding of Madeira Corporate Services dates back to 1996. MCS started as a corporate service provider in the Madeira International Business Center and rapidly became a leading management company… Read more
