Spain and Portugal are two neighboring countries with a similar standard of living, climate, culture, and mentality. When deciding to move to a warm, Mediterranean European country, many people compare the pros and cons of these two countries.
They introduced programs for obtaining a residence permit for digital nomads almost simultaneously. In general, their migration legislation is quite similar, including options for moving based on investments. The so-called golden visa is valid in both countries. If you’re trying to decide between Portugal and Spain, this article will help. We compared the main aspects of life in both countries and examined immigration opportunities.
Which country is richer: Spain or Portugal?
The standard of living is one of the main criteria potential migrants analyze. While it’s generally accepted that Spain and Portugal are economically similar, there are still some differences. In the first quarter of 2024, Spain’s GDP was EUR 380,710 million, while Portugal’s was EUR 69,492 million. Both countries saw the same growth in this indicator: 0.8% compared to the previous quarter. According to the International Monetary Fund’s latest ranking, Portugal ranked 47th and Spain ranked 15th in terms of GDP.
Another important indicator of a country’s wealth is its GDP per capita at purchasing power parity. In this category, the two countries took 44th and 40th place, respectively. Portugal has a decent European standard of living compared to many other countries in the world, but it is still relatively poor compared to its neighbor Spain, thus making it worthwhile to get a residence permit and move there.
Cost of living in Spain vs Portugal
If you’re considering moving to Portugal or Spain, take a look at where it’s better to live in terms of prices and expenses for basic necessities. In Spain, estimated expenses per person per month, excluding rent, are approximately EUR 700. For a family of four, an average of EUR 2,500 is required. This amount includes quality food, wardrobe renewal, recreation, leisure, and healthcare.
In Portugal, the cost of living is slightly lower. One person requires about EUR 670, and a family needs about EUR 2,300. Food prices are slightly higher in Spain, but the difference is only a few euros or cents per item.
The difference in cost of living is offset by differences in residents’ incomes. Considering that Spain is richer than Portugal, the salary level is appropriate. As of 2024, the average Spanish income is EUR 1,700. In Portugal, the average salary is EUR 1,050. The difference in residents’ incomes is more significant than the difference in prices. This confirms once again that Spain is a better place to live.
If you have a monthly income of at least EUR 2,400 outside Spain, you can move there under the program for financially independent persons. You will receive a one-year residence permit with the option to extend it, along with the opportunity to bring your family members.
Real estate market: Spain vs Portugal
The real estate markets in Spain and Portugal are similar in many ways. Depending on your preferences, you can choose from a variety of properties, such as an apartment in an old house in the city center, a functional new building, a compact house on the coast, or a luxurious villa in an elite resort region. Each country has its own most expensive and prestigious locations for purchasing real estate: Barcelona and Madrid in Spain and Lisbon and Cascais in Portugal.
However, there is a difference in pricing policies. In both countries, the cost depends on the property’s type and location. Higher prices are available in resort areas. For example, the cost per square meter of an average apartment in the capital is from EUR 3,300 to 5,700 in Spain and from EUR 3,200 to 6,100 in Portugal. In general, Spanish properties are somewhat cheaper.
Taxes in Spain and Portugal compared
Both countries have similar tax systems, and the rates are progressive based on profit amount. Due to the large number of figures, it’s easier to provide information for each country separately so you can compare the two.
Portugal’s income tax rates are presented in the following table:
| Annual income amount, € | Rate B | Rate A |
|---|---|---|
| Up to 7 703 | 13,25 % | 13,25 % |
| 7 703–11 623 | 14,852 % | 18 % |
| 11 623–16 472 | 17,251 % | 23 % |
| 16 472–21 321 | 19,24 % | 26 % |
| 21 321–27 146 | 22,139 % | 32,75 % |
| 27 146–39 791 | 26,862 % | 37 % |
| 39 791–51 997 | 30,768 % | 43,5 % |
| 51 997–81 199 | 35,886 % | 45 % |
| From 81 199 | – | 48 % |
The rule is simple: Rate B applies to the amount listed first in the first column (the lower limit). Rate A applies to the remaining range. For example, if you earn EUR 40,000 per year, your income tax will be calculated like this:
- 30,768 % of 39 791 EUR = 12 242,9 EUR;
- 43,5 % of 209 EUR (40 000-39 791) = 91 EUR.
The total tax amount is EUR 12,333.90.
As for business tax rates in Portugal, the options are:
- 21% in mainland Portugal;
- 20% in the autonomous region of Madeira;
- 8% in the Azores.
A reduced rate of 17% applies to the first EUR 25,000 of income for small and medium-sized companies, while the normal rate applies to the rest.
In Spain, the income tax rates for individuals are:
- 19% — up to EUR 12,450;
- 24% — EUR 12,450–20,199;
- 30% — EUR 20,200–35,199;
- 37% — EUR 35,200–59,999;
- 45% EUR 60,000–299,999;
- 47% for over 300,000 EUR.
The fixed rate for businesses in Spain is 25%. However, new companies on the market with a positive base in their first tax period and subsequent ones can take advantage of a reduced rate of 15%. It is difficult to say for sure where taxes are higher because rates in both countries are similar. A more specific comparison is necessary depending on planned activities and projected income.
Residency programs in Spain and Portugal
When planning to immigrate to one of these countries with a residence permit, it is important to choose the program that best suits your needs, capabilities, and goals. For example, you can apply for a golden visa in Portugal or Spain, but this requires significant investments — EUR 250,000 or 500,000, respectively. Below, we will compare several of the most popular ways to move to these countries.
Residency for business
Ambitious entrepreneurs from different countries may consider Portugal or Spain for immigration. Both countries have programs that allow you to obtain a residence permit for a startup without requiring fixed investments; however, you must submit a promising business plan. In Portugal, you must demonstrate how you will reach an annual turnover of EUR 325,000. The permit is initially issued for two years and can be extended for three. To obtain a startup visa in Spain, you only need to present an innovative idea that will be approved by the relevant authority. A Spanish residence permit is issued immediately for three years.
Residency by financial independence
To obtain a D7 visa in Portugal, financially independent persons must prove a stable monthly income of at least EUR 820 for the main applicant, 50% of that amount for a partner, and 30% for each child. You must demonstrate income for 12 months. To obtain a residence permit in Spain for financially independent individuals, you must have an income of at least EUR 2,400. For each dependent included in the application, you must earn an additional EUR 600. Although the FIP cannot work, they have the right to make investments and receive passive income, such as from renting real estate or receiving dividends.
Residency as a digital nomad
Both countries have programs for remote IT workers. In Portugal, applicants must earn at least EUR 3,280 per month. First, a four-month visa is issued, and then a two-year residence permit can be obtained. The requirements for a nomad visa in Spain are more favorable because the required income is lower (EUR 2,268). Initially, a one-year visa is issued, followed by a three-year residence permit.
Quality of life: living in Spain vs Portugal
When deciding between Portugal and Spain, consider the following aspects:
- Climate
Both countries have a warm, Mediterranean climate with plenty of sunny days — 280 in Spain and 300 in Portugal. Those who dislike cold winters, rainy autumns, and generally gloomy weather all year long should consider moving here. There is little difference in climate between the two countries. Spain is drier and hotter, but the winters are quite cold in the central part. Portugal has higher humidity and snow in the north, but the summers are not too hot.
- Food
Residents of both countries have access to fresh fruits and vegetables and inexpensive, high-quality seafood almost year-round. The countries have established restrictions on the use of herbicides, so the products grown within their borders are safe. As for cuisine, Spain’s is more vibrant and authentic with a large number of local specialties. Portugal’s cuisine is not as varied.
- Medicine
The Spanish healthcare system is considered one of the best in Europe and the world; therefore, it surpasses Portugal’s system. The country regularly ranks high in various thematic ratings, such as innovation in medicine, quality of service, science and technology, and financial stability of the industry. Portugal’s medical system also meets European standards and is considered affordable, but Spain still demonstrates advanced positions in the global landscape.
- Mentality
In this regard, it is difficult to determine the difference between the two countries. Representatives of both nations are open, emotional, and hospitable. They are people who always smile, give compliments, and surprise others with their positive and easygoing attitude toward life. Both the Spanish and the Portuguese are extremely friendly towards foreigners. They try to help when needed and never show superiority, so adaptation is quite easy.
Spain or Portugal — which country is better for expats?
According to one of the most reliable quality of life ratings from the UN, Spain ranks 27th, while Portugal ranks 42nd. The rating considers life expectancy, quality of education, and GDP per capita. Portugal has a slightly more comfortable climate and a lower cost of living. However, in Spain, salaries are higher, healthcare is better, and real estate is cheaper.
Despite Portugal’s advantages in accessibility and immigration policies, Spain remains a more attractive choice for families with children thanks to its high level of education, developed infrastructure, and variety of development and leisure opportunities. Spain wins in terms of economic development and the benefits of its migration programs. As we can see, Spain surpasses Portugal in most categories.
Our specialists are ready to provide professional assistance in choosing an immigration and registering for a residence permit in Spain.
