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Settling in Portugal: Where to Live as an Expat

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Settling in Portugal: Where to Live as an Expat

by | Monday, 17 July 2023 | Immigration, Real Estate

where to live in portugal as an expat

Where to live in Portugal as an expat is a question that many raise when considering relocating. Portugal is a country rich in history, culture, and natural beauty. With its warm climate, friendly locals, and affordable cost of living, Portugal is a popular destination for expats worldwide. In this comprehensive guide, I will go over everything you need to know about where to live as an expat in Portugal. This guide covers you from the top expat-friendly cities to the cost of living and renting vs. buying property.

Introduction to Portugal as an Expat Destination

Portugal is a small country located on the western coast of Europe. It is known for its beautiful beaches, historic cities, delicious food and wine. Portugal has a rich cultural heritage and is home to many UNESCO World Heritage sites. The official language of Portugal is Portuguese, but many locals speak English, especially in the tourist areas. Portugal is a safe country with a low crime rate, making it an ideal destination for expats.

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Factors to Consider When Choosing Where to Live in Portugal

When choosing where to live in Portugal as an expat, there are several factors to consider. These factors include:


Portugal has a Mediterranean climate, which means it has mild winters and hot summers. The south of Portugal is warmer than the north, and the coast is generally more generous than the interior.

Cost of Living

Portugal is an affordable place to live, especially compared to other European countries. However, the cost of living can vary depending on where you choose to live.


While many people in Portugal speak English, it is still essential to consider the language barrier when choosing where to live. If you do not speak Portuguese, you may want to consider living in a more touristy area where English is more widely spoken.


Portugal is a small country, and it is easy to get around by car, train, or bus. However, it is essential to consider how easy it is to travel to and from your chosen location.

Top Expat-Friendly Cities in Portugal

Several cities in Portugal are popular with expats. These cities offer a high quality of life, a low cost of living, and a welcoming community. Here are the top expat-friendly cities for those wondering where to live in Portugal as an expat.

Funchal: The Pros and Cons


Funchal, Madeira Island

Funchal is the capital city of Madeira, an island off the coast of Portugal. It is a popular destination for expats due to its warm climate, beautiful scenery, and relaxed way of life.


Funchal, the capital city of Madeira Island, is a great place to live due to its numerous advantages. First, the city is renowned for its excellent yearly weather, with temperatures between 18°C and 25°C. This mild climate ensures that residents can enjoy outdoor activities such as hiking, swimming and surfing, even during winter. Additionally, Funchal is located in a beautiful natural setting, surrounded by mountains and the Atlantic Ocean, which makes for breathtaking views and a peaceful atmosphere.

Second, Funchal is a safe city with low crime rates, making it an ideal place to raise a family. The city has excellent infrastructure, including excellent healthcare facilities, international schools, a public university, and public transportation, ensuring that residents can easily access essential services. Furthermore, Funchal is a cultural hub, with numerous museums, art galleries, and festivals throughout the year, providing residents with a rich cultural experience.

Lastly, Funchal has a vibrant economy, particularly in the tourism sector. The city attracts thousands of visitors annually, which has created opportunities for entrepreneurs and investors. The city also has a dynamic startup ecosystem, with incubators and accelerators, making it an ideal place for young professionals to launch their businesses in a corporate tax-friendly environment. Overall, Funchal offers an excellent quality of life, making it an attractive destination for those seeking a peaceful, safe, and culturally rich environment.


While Funchal and Madeira Island offer many benefits, there are also some drawbacks to living in the region. One of the most significant disadvantages is the cost of living, especially regarding housing.

Another potential downside to living on Madeira Island is its isolation. While the island has an airport with connections to major European cities, travel to other parts of the world can be more challenging and expensive. Additionally, the island’s remote location can make it more difficult to access certain goods (e.g. exotic foods) that may be more readily available in larger urban areas.

Porto: The Pros and Cons

Porto, Portugal

Porto is the second-largest city in Portugal and is known for its port wine, historic architecture, and vibrant nightlife.


Oporto, also known as Porto, is a beautiful city in northern Portugal. The city is famous for its rich history, beautiful architecture, and lively culture. There are many benefits to living in Oporto, making it a popular destination for locals and expats alike.

One of the most significant advantages of living in Oporto is the city’s excellent quality of life. The city boasts a mild climate, with warm summers and mild winters, making it a comfortable place to live all year round. Oporto is also known for its beautiful natural setting, with the Douro River winding through the city and the surrounding hills providing stunning views. The city has excellent infrastructure, modern facilities and amenities, including high-speed internet, modern healthcare, and a reliable public transportation system. Additionally, Oporto has plenty of job opportunities, particularly in the tech and startup sectors, making it an attractive destination for professionals.


While Oporto is an excellent place to live, it does have its drawbacks. Firstly, the city can be pretty expensive, particularly in terms of housing. The demand for apartments and houses in Oporto has increased in recent years, leading to a surge in property prices. This can make it difficult for those on lower incomes to find affordable accommodation in the city.

Secondly, Oporto can be pretty crowded and busy, particularly during peak tourist season. The city’s narrow streets and historic buildings can make navigating challenging, and traffic can be heavy in some areas. This can be frustrating for residents who find themselves stuck in traffic or struggling to find a quiet spot to relax.

Finally, Oporto’s climate can be pretty humid and rainy, particularly in winter. This can be challenging for those who prefer a warmer, drier climate, and it can also make outdoor activities less enjoyable. While Oporto has plenty of indoor attractions, those who enjoy spending time outside may find the weather a downside of living in the city.

Lisbon: The Pros and Cons

Incorporating in Portugal

Lisbon, Portugal

Lisbon is the capital city of Portugal and is known for its historic architecture, delicious food, and vibrant culture.


Lisbon is a city with a unique charm that attracts people from all over the world. One of the biggest pros of living in Lisbon is the city’s rich history and stunning architecture, which can be seen in its many monuments, museums, and buildings. From the famous Belem Tower to the Jeronimos Monastery, Lisbon offers many opportunities to explore its past.


One of the major drawbacks of living in Lisbon is the lack of security. In recent years, crime rates have increased, particularly in tourist areas. Pickpocketing, theft, and burglaries have become more common, and residents must be vigilant and take necessary precautions.

Another issue that residents face is the high cost of living. While Lisbon is relatively affordable when compared to other European cities, it can be expensive for locals. Housing, utilities, and groceries are rising, and making ends meet can be challenging for those on a tight budget. The city’s booming tourism industry has also increased prices for restaurants, bars, and other entertainment options.

Lastly, the city’s traffic can be a real headache for residents. The narrow streets and steep hills make navigating challenging, and daily traffic congestion occurs. Finding parking can also be a nightmare, and many locals opt for public transportation or cycling to avoid the hassle. While Lisbon is a beautiful city with many attractions, these factors can make day-to-day life more difficult for its residents.

Other Expat-Friendly Cities in Portugal Worth Considering

Other cities in Portugal that are popular with expats include:

  • Faro
  • Coimbra
  • Braga
  • Aveiro

Cost of Living in Portugal

The cost of living in Portugal is affordable, especially when compared to other European countries. The cost of living can vary depending on where you choose to live, but here is a general breakdown of the cost of living in Portugal:

  • Accommodation: €500-€1000 per month
  • Food: €200-€400 per month
  • Transportation: €50-€100 per month
  • Utilities: €100-€200 per month

Renting vs. Buying Property in Portugal

Regardless of the region, choosing to rent vs buy a house is a substantial financial choice. In Portugal, each option has a unique mix of benefits and cons. Purchasing real estate in Portugal, especially in popular locales like Lisbon, Porto, and the Algarve may be profitable. Over the years, the Portuguese real estate market has expanded steadily, drawing domestic and foreign investors. Although purchasing real estate might be expensive up front, the potential rewards, mainly through appreciation and long-term rental income, can make it worthwhile. As an additional incentive for foreign purchasers, Portugal provides a Golden Visa scheme that enables non-citizens of the European Union to acquire residency through real estate investment.

However, purchasing real estate might not always be the best course of action, particularly for people seeking flexibility or without the immediate financial resources to invest. Renting in Portugal allows for more flexibility, making it a good option for expats or people who want to remain for a limited time. The cost of rent varies by area, with significant centres and well-known tourist attractions typically costing more. However, compared to many Western European nations, rents are often relatively reasonable. Additionally, renting is often a quicker and easier procedure than buying, which may require complicated paperwork and possible language obstacles.

Due to its distinctive terrain and excellent environment, the scenario might be slightly different regarding Madeira Island, a well-liked vacation spot. The cost of real estate on the island may be greater than on the mainland, purchasing property a more significant financial commitment. However, there is a lot of opportunity for rental revenue, especially vacation rentals. Given the island’s allure to tourists, a bought property may eventually pay for itself.

But for those who wish to sample island living without committing long-term, renting on Madeira Island is a well-liked option. Since the island is a well-liked vacation spot, various rental opportunities are available, ranging from villas and flats to more conventional Madeiran residences. Like renting on the mainland, it can provide flexibility, which is especially useful if you don’t want to stay long or want to experience living in various areas of the island. Since the island is so tiny, renting might also allow you to get to know the area’s real estate market before deciding to buy a home.

Conclusion and Final Tips for Settling in Portugal as an Expat

Portugal is an excellent destination for expats looking for a high quality of life, a low cost of living, and a welcoming community. When choosing where to live in Portugal as an expat, it is crucial to consider factors such as climate, cost of living, language, and accessibility. The top expat-friendly cities in Portugal are Funchal, Porto, and Lisbon, but many other cities are worth considering. The cost of living in Portugal is affordable, and expats can choose to either rent or buy property. With these tips in mind, settling in Portugal as an expat should be a breeze.

If you’re considering where to live in Portugal as an expat, do your research and visit the cities that interest you before making a decision. With some preparation and some insider knowledge, you can make Portugal your new home.

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