Living in Portugal versus the USA

If you’re a high-net-worth individual (HNWI), chances are you regularly reevaluate which countries are best positioned to address your essential needs of wealth preservation, global mobility and lifestyle.

After all, those qualities are critical for HNWIs looking to relocate or diversify their citizenship.

Two countries that might fit that particular bill are Portugal and the United States of America, as both offer attractive but distinctive paths for entrepreneurs and investors seeking residency or citizenship.

But if you had to choose, which would you opt for – Portugal or the US of A?

This in-depth guide takes a deep dive into life in Portugal versus the United States. We’ll compare both countries side-by-side, looking into the cost of living, daily lifestyle and much more to help you find out which country is the best place for you.

Portugal versus the USA: General Overview

Portugal has hit the industry headlines numerous times in the last decade or so, ever since interest in this small European nation skyrocketed when it introduced its now-famous golden visa in 2012. 

And while the country removed its much-coveted path to citizenship through real estate investment in late 2023, the Portuguese golden visa still exists, with the donation amount required for eligibility as low as €250,000 in certain circumstances.

Certainly, there’s a lot to like about Portugal.

The cost of living is low in this country and the locals enjoy a laid-back lifestyle. Lisbon, the capital, is the second-oldest capital city in Europe, and the country’s whimsical architecture and friendly locals are hard to beat. 

But is it the right place for you?

On the other side of the Atlantic, the US is known for its high-income potential, diverse job market and endless comfort and convenience.

Its EB-5 Investor Visa program allows investors to obtain a Green Card by investing in American businesses.

But both the EB-5 visa and the US lifestyle come at a price.

The visa requires higher investments and has strict compliance rules, while life in the US can incur sky-high living costs, an intense work culture and political instability.

In some ways (such as Western comforts), the two countries have a lot in common or at least, they’re well-known to each other.

In Portugal, foreign nationals currently make up more than 10% of the population, with US citizens forming a significant part of that group. So, if you’re considering moving to Portugal from the US, it wouldn’t be too hard to ‘find your tribe’.

But which country is better to live in and why? And what should you even be looking at when comparing living in Portugal to the US?

At Nomad Capitalist, we specialise in creating custom strategies for immigration and asset protection. Understanding the pros and cons of each destination, specifically related to taxes, cost of living and citizenship benefits, is important.

So, this is our in-depth analysis of how these two countries stack up against each other.

Below, we’ve identified the key differences to help you decide which one fits your personal and financial goals best.

Cost of Living in Portugal vs the USA

Aside from second passport options, perhaps one of the first things most consider when weighing a move from Portugal to the US or vice versa is the cost of living.

Generally speaking, the cost of living in Portugal is significantly cheaper than in the US.

While the exact average varies greatly, depending on the cities you compare, the current cost of living in Portugal is about 36% lower than in the United States.

Even if you compare the cost of living in Lisbon to a city like Austin, Texas, which is arguably more affordable than major cities like New York, San Francisco or Los Angeles, Portugal remains the better option.

According to recent estimates:

• The overall cost of living in Lisbon is about 23% lower than in Austin (excluding rental expenses)
• Rent prices in Lisbon are about 34% lower than in Austin
• Restaurant prices in Lisbon are about 29% lower than in Austin
• Grocery prices in Lisbon are 30% lower than in Austin.

Portugal’s affordable cost pertains to real estate, rent prices, transportation costs, utility costs and monthly expenses.

Housing Costs

In terms of rent Portugal is about 73% lower than in the United States.

For example, renting a one-bedroom apartment in Lisbon costs, on average, nearly €1,400 (US$1,500) per month.

A similar apartment in New York City could set you back just over €3,700 (US$4,000) per month, which is a whopping 164% difference.

When it comes to buying, property prices in Portugal are also more affordable:

• A square metre in New York City can cost up to about €17,000
• A square metre in Lisbon averages about €6,000

Daily Expenses

In comparison to the US, the prices for groceries and dining out in Portugal are more than 40% lower.  

A three-course meal for two at a mid-range restaurant costs about €35 (US$39). The same meal in a similar setting in the US could cost around US$70 if you’re lucky.

Transportation fees in Portugal are lower, too. A standard monthly public transportation pass in Lisbon costs €30 (US$32), while in New York City, it’s US$132.

Taxes and Social Security in Portugal vs the USA

Until recently, Portugal’s Non-Habitual Resident (NHR) tax benefits have contributed to the affordable cost of living in Portugal. However, this program has unfortunately come to an end, at least in its current form.

Introduced in 2009, Portugal’s Non-Habitual Resident (NHR) tax regime offered significant tax benefits for foreign residents, making it particularly appealing to high-net-worth individuals.

While the program changed in January 2024 to what the government is calling ‘NHR 2.0’, the flat 20% tax rate on certain Portuguese-source incomes and tax exemptions on most foreign-source incomes for the first ten years still apply.

That is, however, only if you meet the requirements. You can learn more about this in our more detailed guide to the NHR ending.

If you do not qualify for Portugal’s NHR scheme (and, honestly, even if you do), you might find that taxes are higher than in the US or other countries.

Other low-tax countries in Europe offer more favourable tax rates and schemes, so if you make more than €2 million annually, you likely have better options.

While we ultimately suggest meeting with a tax and immigration specialist, here’s a quick breakdown of the differences between taxes and social security in Portugal versus the US.

Tax Rates

Personal income tax rates in Portugal range from 13.25% to 48%, depending on your income bracket. However, if you are fortunate enough to hold NHR status you’ll benefit from a flat 20% rate.

In contrast, the US employs a progressive tax system with rates ranging from 10% to 37%. But, the key point is that the tax obligation is based on citizenship (or permanent residency), not residence, meaning US citizens must file US taxes even if they are living abroad.

Additionally, US citizens and permanent residents are taxed on their worldwide income, regardless of where they live. 

While there is a tax treaty between Portugal and the United States, there remains a danger of double taxation unless mitigated by foreign tax credits or exclusions.

Corporate tax rates in mainland Portugal are 21%, the same as the current corporate tax rate in the United States. Reductions apply to startups and special businesses.

Social Security

In Portugal, employees contribute 11% of their gross salary, while employers contribute 23.75%.

Social Security and Medicare taxes in the US amount to 7.65% for employees and 7.65% for employers, totalling 15.3%. Self-employed individuals must pay the full 15.3% themselves, though half of this can be deducted when calculating taxable income.

The biggest difference here lies in the benefits received from these contributions.

In Portugal, the public healthcare system is comprehensive and largely funded through social security contributions, providing significant savings on medical expenses.

Individuals may still need to pay small co-pays for certain specialised services, but these are low compared to the US healthcare system. 

On the other hand, in the US social security benefits include retirement, disability and survivor benefits, but the public healthcare system is limited to specific groups like the elderly (Medicare) and low-income individuals (Medicaid). 

Even then, Medicare can involve costs like premiums, deductibles and co-pays.

Most US residents rely on costly private health insurance, which we examine below.

Quality of Life in Portugal versus the United States

Quality of life is a major consideration when choosing between Portugal and the US. 

Both countries offer unique advantages but differ significantly in healthcare, education and safety.

USA vs Portugal Healthcare Ranking

According to the 2024 Health Care Index by Numbeo Portugal places 21st globally in healthcare performance, while the US comes in at 38th. 

The reason behind Portugal’s superior ranking is largely due to its universal healthcare system, officially called the Serviço Nacional de Saúde (SNS). Supported by taxes, the SNS grants all citizens access to medical services at no cost or at a heavily reduced price, meaning you won’t have to scramble to pay sudden medical bills or struggle to find proper care.

On the other hand, the US system relies heavily on private health insurance, which often leads to high costs and potential difficulties in accessing care. 

Cheap coverage for a single person is currently about US$477 per month on average through the Affordable Care Act.

USA vs Portugal Education Options

Unlike in the US, public education in Portugal isn’t just high-quality – it’s free. 

Higher education in Portugal is also more affordable than in the US, with tuition fees for a bachelor’s degree at a private university averaging around €3,000 to €12,500 per year.

That’s a stark difference from the average cost of attending a public university in the United States, which comes in at just over US$27,000 per year for in-state students.

On the other hand, the US offers more varied educational opportunities, including world-renowned universities.

However, admission to those famous universities is exceptionally difficult to access, while the general cost of tertiary education can be prohibitively high, often leading to significant student debt.

Portugal Crime Rate vs. USA: Is Portugal Safe for Americans?

Portugal consistently ranks as one of the safest countries in the world, with low crime rates. 

According to the 2024 Global Peace Index, Portugal is the seventh-safest country in the world.

The United States charts at 132 on that list, just after countries like Libya, Ecuador and Brazil.

Daily Life in Portugal versus the USA

Ah… culture and lifestyle – this is one issue you can’t ignore.

Tax benefits, citizenship and the cost of living aside, it’s important that you like where you live. 

After all, what does saving a few thousand dollars each year mean if you’re miserable day after day, worried about your safety, incapable of adjusting to the climate or language or just plain bored?

Here’s how life in Portugal versus the US differs from a local’s perspective.

Daily Life in Portugal

Portugal’s culture is deeply rooted in its history and traditions: this is a country known for its warm hospitality, relaxed pace of life and a strong sense of community. 

Festivals are a big part of Portuguese life, with events like the lively Carnaval and the traditional St Anthony’s Day celebrations filling the streets (literally) with colour and music. 

For locals, daily life revolves less around work and more around friends and family.

Portuguese people have adopted a Western European mentality in relation to work and leisure, meaning that while locals work hard to earn their (meagre) wages, work doesn’t define them.

And speaking of leisure, rest assured there is plenty to do in Portugal. 

The country’s coastline mimics California’s, making it a popular spot for US retirees looking for similar landscapes but without the issues (and prices) typical of the US West Coast.

Sail, surf or sunbathe – you can do it all along Portugal’s wild Atlantic coast. 

While the country’s train system isn’t as well-connected as other neighbouring countries like Spain or Italy, Portugal is small enough to explore by car and boasts well-maintained roads that take you to picturesque vineyards up north or historic towns in the centre of the country. 

It would be remiss not to mention one of the greatest adventures of living in Portugal: the cuisine.

Fresh seafood is a highlight, with dishes like bacalhau (salted cod) and grilled sardines being staples.

Portuguese cuisine is also known for its pastries, particularly the famous pastéis de nata (custard tarts). 

Daily Life in the US

In contrast, the US is a melting pot of cultures that spans about 100 times the surface area of Portugal. 

The cultural differences among various regions are significant and distinct from those in Portugal.

Most people find they fit in somewhere in the United States, whether that means the bustling urban life of New York City or the more dreamy, laidback backroads of Georgia. 

Recreational activities in the US are as varied as its landscape: you can enjoy outdoor adventures like hiking in national parks such as Yellowstone or Yosemite, skiing in Colorado, or simply lounging on Florida’s white sand beaches. 

Entertainment options are virtually endless, with countless sports events, theme parks and cultural festivals to enjoy.

Again, it’s impossible to accurately compare Portugal and the US without mentioning food, as food in the US reflects its cultural diversity. 

Each region has its specialities, from Southern BBQ and Tex-Mex in the Southwest to fresh seafood in New England.

Where are the Best Places for Families to Live in Portugal?

Portugal offers many great family-friendly destinations for American expats. Here are three of the best options:

• Lisbon: The capital city offers excellent schools, quality healthcare and plenty of family-friendly activities. There’s a vibrant cultural scene here and many parks, but it’s more expensive than other regions.
  
• Porto: Portugal’s second-largest city is known for its safe, family-oriented neighbourhoods. It offers a lower cost of living compared to Lisbon and has great schools and public transport on offer.
  
• The Algarve: Famous for its beaches and sunny climate, the Algarve is ideal for families who want to soak up the sun and live outdoors. There are some good international schools here, too. The relaxed lifestyle makes it popular among expats.

For a complete guide on where to live, take a look at our complete article on the best places to live in Portugal.

How to Retire in Portugal from the USA

The best options to retire in Portugal from the USA would be through a D7 Visa or the updated golden visa program. 

The D7 Visa is ideal for retirees with passive income, such as pensions or rental income. To qualify, you’ll need to show sufficient funds (currently about €9,840 per year for one person) and maintain a local bank account. You’ll also need to stay in Portugal for part of each year and have health insurance.

The golden visa allows you to retire by investing in Portugal, with options like venture capital funds or donations to the arts, starting at €250,000. 

Both visas offer a path to residency, and after five years, you can apply for permanent residency or citizenship, which includes EU benefits like visa-free travel.

Portugal vs the United States: Which Is Better?

For high-net-worth entrepreneurs, the choice between Portugal and the United States hinges on strategic priorities.

If you qualify, Portugal offers significant tax advantages through its Non-Habitual Resident (NHR) regime, providing a potentially favourable environment for wealth preservation and financial planning. Although, as we’ve mentioned, this program is not what it used to be.

Conversely, the United States offers unparalleled business opportunities and a dynamic market ideal for ambitious entrepreneurs. Its diverse economy and high-income potential are compelling for those focused on scaling their ventures.

At Nomad Capitalist, we believe moving to the US is overrated, but ultimately, the decision depends on whether you prioritise tax efficiency and lifestyle or expansive business growth and innovation.

Living in Portugal versus the USA: FAQs

Consider Living in Portugal: Go Where You’re Treated Best

Whichever country you plump for, the decision needs to be followed up with meticulous planning and a clear vision for your future goals. 

At Nomad Capitalist, we enable you to make informed decisions beyond tax reduction. Our focus is on crafting an ideal lifestyle that allows you and your family to go where you’re treated best. 

We uniquely integrate tax, immigration, asset protection and investment strategies to ensure all elements work harmoniously to build your dream life. 

If you’re considering relocating to Portugal from the US, our expert team can guide you every step of the way, including providing you with alternative options to better optimise your investments and protect your assets. 

Apply to work with us today.