Spain vs Portugal: Which country is better to move to? Trying to decide to if you want to move to Spain or Portugal? Want to know which country is better for taxes, which one has a cheaper cost of living and which offers more diverse culture and landscapes? Here’s everything you need to know.
Cádiz or Lisbon? Spain or Portugal? Here is a breakdown of some of the factors you may want to consider if you’re trying to decide which country in the Iberian peninsula you should move to.
Ultimately the decision of whether you move to Spain or Portugal may come down to personal preferences – the areas you like, the language you want to learn and the types of cuisine you want to enjoy, but there are several factors that can make living somewhere more difficult than others, such as taxes, visas and cost of living.
So which one of these two countries that form the Iberian Peninsula (along with tiny Andorra) offers the most to newcomers – Spain or Portugal? Here’s everything you need to know.
Table of Contents
Study in Spain or Portugal?
Portugal receives 3 times more Erasmus (i.e. European exchange) students than it sends away. This must mean that something is attracting students to Portugal. While, Portuguese higher education is on par with European standards. This means that if you find a course in English, you can expect to learn the same things as you would in Germany, for example, with the same level of demand, but with a less cooler campus. And even though Portuguese universities have tuition, it is only around 100$/month (1000€/year). With much lower living costs than you would find anywhere else in western Europe.
The higher education system in Spain dates back to the Middle Ages. Therefore, The oldest and most reputable universities offer courses and programmes to local and international students. While, Spanish institutions maintain the same level of quality as across the higher education institutions in Europe. Spain has both publicly and privately owned universities. Currently, Spain has 45 public universities and 31 private universities. Annual tuition fees in Public Spanish universities are generally between 2,000-3,500 Euros.
The disadvantage to studying in Spain is that the tuition fee in Spain is in a pay-per-credit format. That means that you might end up paying more if you withdraw and enroll for the second or third time in the same program. That does not happen in other EU countries. For example, Swedish Universities charge only once. For example, you have withdrawn from a registered course or failed in any particular subject. You can try to pass the exam three to the four-time.
Taxes Portugal vs Spain
The tax systems in both Spain and Portugal are complicated, so it will of course depend on your individual circumstances as to where you’d pay less tax. At first glance, it seems that whether you’re a low earner or a high earner, the tax brackets for 2022 are generally more favourable in Spain than in Portugal, where they are slightly higher.
In Portugal the general income tax rates for 2022 are:
28.5 percent for those earning €15,217 – €19,696
35 percent for those earning €19,676 – €25,076
37 percent for those earning €25,076 – €36,757
43.5 percent for those earning €36,758 – €48,033
While in Spain the tax rates for 2022 are:
24 percent for those earning €12,450–€20,200
30 percent for those earning €20,200–€35,200
37 percent for those earning €35,200–€60,000
45 percent for those earning €60,000–€300,000
However, if you plan on being self-employed, Spain may not be more beneficial to you. As a freelancer you will have to pay social security on top of your income tax in both Spain and Portugal.
Portuguese Social Security (Segurança Social) is generally 21.4 percent of your earnings and payments are made monthly. In Spain however, the minimum contribution is around 30.60 percent. Currently this is paid as a flat monthly fee of €294 per month, no matter what your earnings are.
There are further benefits in Portugal when you look at the country’s ‘non-habitual residents’ (NHR) scheme. This allows new residents to access special tax benefits for their first ten years in the country. It also offers a lower income tax rate of 20 percent if you’re employed in Portugal in a ‘high value’ activity and allows you to earn some foreign income tax-free.
Foreigners from any country can benefit from Portugal’s NHR scheme if they qualify as a tax resident in Portugal and have not been taxed as a Portuguese tax resident in the five previous years.
Spain doesn’t offer any similar type of scheme for foreign residents.
If you’re a non-EU citizen who wishes to move to either Spain or Portugal, one of the ways to be gain residency is through a sizeable investment.
Before 2022, you could qualify for residency in Portugal by investing €280,000 in one or more properties, one of the lowest investment thresholds in Europe. But the country’s golden visa rules were toughened on January 1st and now you have to buy a property worth €500,000 or invest €350,000 in a rehabilitation project, as well as other restrictions on “qualifying” areas where you can buy.
That puts Portugal on a par with Spain, where you have to you have to invest €500,000. Both countries offer other monetary investment residency options involving shares, bonds and donations.
It’s also worth noting that in Portugal you are eligible to apply for Portuguese citizenship in five years, while in Spain you also renew your residency status, but can only apply for citizenship after 10 years.
Digital nomad visa
While Spain only just announced it would be introducing a digital nomad visa in 2021 and has yet to finalize all the details, Portugal currently offers the D7 visa for digital nomads.
To be eligible you must prove you have an income of at least €8,424 a year, but they are more likely to grant you the visa if you earn more. You’ll also be required to have a minimum of €7,500 in a Portuguese bank account.
Spain does offer a non lucrative visa (NLV) scheme, but it is a lot costlier than Portugal’s D7 visa and as the name suggests you are not allowed to work on the NLV. For 2022 you need to prove you have an income of €27,792 for the year to be eligible for this visa.
Cost of living
The costs of living in Spain and Portugal vary considerably depending on where you choose to live in the country. Several cost of living comparison websites state that Portugal is slightly cheaper than Spain, but others state that it’s virtually the same.
While, the cost of living in Madrid is seven percent higher than in Lisbon. Meanwhile Barcelona is 10 percent higher than Lisbon.
Monthly rent for an 85 m2 (900 sqft) furnished flat in a standard area of Lisbon will cost an average of €970 per month, while in Barcelona a flat of the same size will cost an average of €1,040 per month.
Eating out and grocery shopping are both slightly higher in Spain than in Portugal. Up until recently, you would usually pay more for electricity, gas and petrol in Portugal than in Spain, but energy costs are sky-high in both countries currently due to record inflation.
In Spain, generally speaking the south and western parts of the country are cheaper than Madrid and northern regions, while in Portugal it’s generally the central and northern regions that are cheaper. The cost of living in both countries is a lot less if you stick to smaller towns and steer clear of the likes of Barcelona, Madrid and Lisbon.
Even though Lisbon has a good nightlife and hospitality scene, Madrid (pictured) has the highest rate of bars per capita in the world.
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.
Skills in Demand Spain vs Portugal
In Spain, competition for jobs is fierce and the majority of international workers tend to gravitate towards bigger cities, where jobs are more readily available. Popular destinations for expats include Madrid and Barcelona, the two largest cities in the country, and Valencia and Seville.
Shortage occupations in Spain occur in professions such as doctors, engineers, marketers, operating staff and business consultancy.
While, In Portugal Customer service jobs are available to people of all ages and backgrounds. Meanwhile, Sales is another career path that is in demand in Portugal. There are a lot of international companies based in Portugal, therefore there are several sales jobs positions available for non-Portuguese speakers. The rise of the IT industry is another thing to be aware of regarding the job market in Portugal. Technical support jobs in Portugal are in high demand, with salaries that are well above average.
The most popular occupations in Portugal in 2023 for foreigners are mainly related to seasonal work in agriculture, fisheries and forestry or the tourism sector. In addition, English teachers, programmers, Engineers, Doctors, Lawyers and health workers are in demand.
Big International Companies
Spain is also home to a number of large international companies. So, These include:
- Abengoa (telecommunications)
- Abertis (infrastructure)
- ACS Group (civil engineering)
- Almirall (pharmaceuticals)
- Banco Santander (banking)
- Ebro Foods (food processing)
- Ficosa (automobile production)
- Iberdrola (utilities)
- Inditex (apparel)
- Logista (logistics)
- Telefónica (telecommunications)
While, Portugal has also big companies like:
- Volkswagen Autoeuropa (automotive assembly plant)
- OGMA – Aeronautical Industry of Portugal
- Hovione (Contract Development and Manufacturing Organization)
- Farfetch (online luxury fashion retail platform)
- PSA Peugeot Citroën (automotive assembly plant)
Lifestyle and culture
Both the Spanish and the Portuguese are friendly, easy-going people, and while it really depends on the area you visit and the people you meet, the Portuguese can be quieter and more reserved than the Spanish.
The Portuguese are also known to be more melancholic than the fun-loving passionate Spanish and you’ll notice this in the music and the way festivals are celebrated. While Portugal does celebrate a few events such as Easter and Carnival, as well as local festivals, nothing in Portugal can come close to Spain’s fiery Las Fallas festival, Catalonia’s human towers, the crazy Canary carnival and southern Spain’s Semana Santa parades.
Culturally, Spain is also a lot more diverse than Portugal. While Portugal’s regions of course do have slight differences in their culture, it’s not as obvious as the differences between Spain’s 17 different regions. In Spain, five different languages are spoken and each region has its own cuisine, festivals, dances and traditions which differ greatly from one to the other.
Spain also has 49 UNESCO World Heritage Sites, while Portugal only has 17. While of course, Portugal’s two largest cities of Lisbon and Porto have plenty going on, many museums and cultural events, in Spain than are many more cultural centers than just Madrid and Barcelona. The likes of Valencia, Seville, Bilbao, San Sebastián, Málaga and Granada are also known for their great museums and cultural offerings too.
Nature and landscapes
Both Spain and Portugal are great for nature lovers, especially those who love hiking, cycling and water sports.
Spain’s landscapes are more diverse than Portugal’s however. While, Spain has a longer coastline, more mountain ranges and more national parks.
Spain boasts a total of 16 National Parks, while Portugal only has one national park. Spain also offers more opportunities for winter sport lovers, with more ski resorts – there is only one place to do this in Portugal, while Spain offers many places throughout the Pyrenees and north of the country, as well as one in the Sierra Nevada.
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.
Hopefully, article ” Spain vs Portugal: Which country is better to move to? ” has helped you to make better decision for your future!
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