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In 2023, it’s never been easier to become a digital nomad or a worker who leverages technology to travel worldwide. This is, in part, thanks to the rise of remote work, which is offering more and more people the opportunity to work from home or travel while living overseas.
Portugal, in particular, has become a hub for digital nomads. In fact, the country recently announced the launch of its very own digital nomad visa – making the opportunity to explore that much more accessible. With a great quality of life, exotic landscapes, and a perfect climate, we anticipate this visa to quickly become one of the most sought-after in Europe.
Considering a move abroad? Curious if Portugal is the right fit? This article covers all the essentials!
Let’s dive in.
Why move to Portugal?
Digital nomads have been flocking to Portugal for quite some time. The country offers expats a high quality of life and has a relatively low crime rate.
Portugal is known for its year-round, warm climate and beautiful landscapes – from beaches to crater lakes. In fact, Portugal was voted the “Best Tourist Destination in Europe” for the fifth time in a row at the 2022 World Travel Awards.
Portugal also offers a low cost of living – 33% lower than the US.2 Residents also have access to an excellent healthcare system.
What are the best places in Portugal for digital nomads?
So you’re a digital nomad and you’ve decided to move to Portugal.
An appropriate next question to consider… which city is best for you?
Here’s a quick list of the most common destinations for nomads:
📍 Lisbon
Portugal’s capital city, Lisbon, is a go-to. Also known as the City of Seven Hills (appropriately nicknamed because of its surrounding hills and breathtaking vistas), Lisbon is also scattered with exotic beaches on the outskirts of town.
It’s a popular spot for startups and is very business-friendly – especially in neighborhoods such as Avenidas Novas, Alvalade, and Bairro Alto.
📍 Porto
Porto is another popular city for digital nomads less than two hours south of Spain. The city is known for its Arrábida Bridge. This national monument crosses the Douro River, and quaint wine houses are tucked away on the banks.
Nomads are commonly drawn to the neighborhoods of Foz do Douro and Ribeira.
📍 Madeira Islands
This peaceful Portuguese archipelago is the ideal location for digital nomads looking for a more laid-back lifestyle. The archipelago consists of four key islands: Madeira, Desertas, Selvagens, and Porto.
The Madeira islands are surrounded by enchanting waters and offer a mild climate all year round. It’s also an excellent location for digital nomads who are into more adventurous hobbies, such as diving, snorkeling, surfing, and windsurfing.
Will digital nomads have to pay taxes in Portugal?
As a resident of Portugal, you will be subject to local tax reporting rules. And if you’re a US passport holder, you won’t just have to report your income to Portugal. You’ll also have to declare your worldwide income to the IRS, even if you don’t live in the US anymore.
That’s because the US applies citizenship-based taxation. Under this taxation system, US expats must file a US tax return, regardless of where they live, to declare their worldwide income.
And because of the Foreign Account Tax Compliance Act (FATCA), Portuguese banks are obligated to report the financial activities of their American clients to the States.
However, fear not — this doesn’t mean you’ll be paying taxes twice on the same income! The IRS has various tax provisions to reduce your US tax liability, often to zero.
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