Portugal is a fantastic and welcoming destination for foreign entrepreneurs. Not only it offers a stable and secure democracy but also highly skilled workers with excellent English proficiency levels.
And despite its growing popularity, Portugal remains affordable for foreign entrepreneurs – especially in comparison with other Western European destinations.
The high quality of life at a fair cost and access to a Europe without borders attracts more and more foreign talent, including:
With many business opportunities for locals and foreigners, Portugal is a favorite choice as the headquarter address of startups. Registering an online business takes a few minutes and the fees are affordable.
If you’re considering choosing Portugal as the European base of your business, make sure you check the country’s cost of living standards. Below are some of the costs associated with living in Portugal for your reference.
Portugal’s cost of living: Renting
The cost of renting in Portugal depends on the region, with the countryside offering more affordable prices. The type of accommodation also influences the final rent price.
On average, a 1-bedroom apartment in the city center can cost around 600 euros. Outside the city center, the average price can go as low as 450 euros. Unfurnished properties will be more affordable too.
Remember: landlords may ask for up to three rent months in advance as a security deposit.
Portugal’s cost of living: Utilities
Water, electricity, and gas bills generally amount to 65 euros for a 1-bedroom apartment. However, these costs can go up to 175 euros or more, depending on the size of the apartment and the number of people living in it.
Are your bills too high? Hot water and air conditioning might be the culprits. Generally, the Portuguese mild weather reduces these costs.
Remember: most Portuguese apartments don’t have central heating. Winters can be cold, and electric heaters might boost your electricity bill.
Portugal’s cost of living: Communications
There are several Internet and communication providers operating in the country. Prices vary, depending on the tariff requirement (free, tailor-made, or unlimited tariffs). A SIM card with 200 MB + 500 min/SMS costs around 12 euros per month.
Fixed Internet service can cost 25 euros per month and a mobile Internet service costs 15 euros per 15 days (unlimited traffic).
Interested in Internet, TV, and mobile phone? Packages with all services included start at52 euros per month.
Portugal’s cost of living: Taxes
Foreign entrepreneurs can expect four different types of taxes in Portugal:
- Income tax
- Consumption tax
- Wealth tax
- Car tax
Three types of taxes are levied on income:
- Personal income tax (IRS): levied on all private income, organized by annual income brackets. It can be adjusted from bracket to bracket.
- Corporate income tax (IRC): levied on the income of companies operating in Portugal, with the rate being mostly 21%, and in the case of SMEs, 17%.
- Municipal surcharge (Derrama): varies depending on the municipality where the company is based on.
Portugal’s cost of living: Transportation
To move around in Portugal, you can choose to:
- Use public transport. Metro tickets cost 1.50 euros per trip (or 6.50 euros per daily ticket / 40 euros for a monthly pass). Lisbon and Porto have the most developed public transport networks.
- Rent a car. It starts at 10 euros per day.
- Ride a taxi/Uber.
- Buy your own vehicle. Remember to consider the taxes and fees involved. You can buy a car for 12,000 euros. The price per liter of unleaded gasoline is around 1.52, and expect to pay a toll when going through highways. Driving long distances in Portugal can add 20 to 30 euros to your journey.
No bicycles? Well, be prepared to face steep hills, hundreds of steps, and cobblestones. Electric scooters are a more popular choice instead.
Portugal’s cost of living: Education
Schools in Portugal are financed by the State and children can attend a state school for free. However, classes are in Portuguese. Private nursery schools and kindergartens cost on average around 350 euros per month.
Most immigrant children attend private schools or international schools, which makes their children’s education more expensive (around 7,000€/year).
Portuguese universities are much more affordable compared to other countries, although courses in English might be limited. The annual tuition fee is around 700.
Portugal’s cost of living: Healthcare
The Portuguese national health system has a low cost for residents registered with the social security system. Consultation fees range from €5 to €20, depending on the specialty and whether it is an emergency or not.
All employers are required to register employees with social security and pay their monthly contributions.
Private annual health insurance can range from 100 to over 1,000 euros per month. You should check the conditions of the private health insurance policy before taking it out, as most insurances don’t provide 100% coverage.
If you are self-employed, you must provide health insurance proof to obtain your visa or residence permit.
Portugal’s cost of living: Food
Food in Portugal is quite affordable. Consider spending around 200 to 300 per month on groceries.
If you like to add some luxury to your monthly shopping, a good Portuguese wine will cost you 10 euros, and in supermarkets, beer costs as little as 1 euro.
Given Portugal’s prime location by the Atlantic, fresh fish prices are very reasonable. Shrimp and tuna cost around 8 euros per kg, but cheaper fish, such as sea bream, can be found for around 5 euros. Red meat costs between 7 and 10 euros, and chicken is much more affordable around 2.50 euros.
Some prices for your reference:
- Milk (1L) – 0.63 euros
- Bread (500 gr) – 1.10 euros
- Rice (1kg) – 0.92 euros
- Eggs (12) – 1.74 euros euros
- Apples (1kg) – 1.55 euros
- Bananas (1kg) – 1.10 euros
And if cooking is not for you, Portugal also has delicious options for restaurants. Keep reading to find out about leisure’s costs in the country.
Portugal’s cost of living: Leisure
Going out for lunch in a cheap restaurant in Portugal costs around 8 euros, including a glass of house wine. In an average restaurant, you will spend between 20 to 40 euros on a meal for two. A more extravagant place will cost around 25 to 35 euros per person.
Monthly fees at a gym can cost around 35 euros per month and a movie ticket costs 7 euros. A pack of Marlboro cigarettes costs 5 euros.
With its enviable climate, stunning landscapes, and affordable cost of living, it is no wonder why Portugal’s reputation is growing as a destination for foreign entrepreneurs.
While living in Western Europe can be very expensive, Portugal breaks the mold by offering a low cost of living and a great quality of life.