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Citizenship By Investment ProgramsGolden VisasSecond PassportsThe Great American Exodus: Americans Living in Portugal - Lincoln Global Partners

February 24, 2023by Kathryn Funk0

The wave of American citizens moving abroad is growing immensely. These days Americans aren’t just relocating for the experience of living in a new culture. They are seeking permanent relocation and pathways to secure second citizenship.

What’s causing this mass exodus?

Our clients most often cite ‘the situation in America right now’ as their reason for relocation.

Rising Crime, mass shootings, furious debates over gun laws, and the third amendment are often triggers. While other complaints are of increasing levels of racism, police brutality and states’ revoking women’s rights.

All in all, wherever one sits on the political and economic spectrum, for many the US has become an extremely polarizing and unstable environment to live in.

For others the move is purely for financial reasons. Americans throughout the country are being affected by the increased cost of living. As everything is on the rise from food, energy bills to housing and medicine. The inability to take out a mortgage loan, go to the doctor or the fear of never being comfortable enough to retire in the States. Taxesthe US is one of only two countries in the world with a citizenship based tax system (the other being Eritrea). Americans are taxed on their worldwide income whether they live in the country or not. Leaving some Americans seeking residency outside of the States to renounce their citizenship all-together. 

Ultimately, the endless list and growing sense of uncertainty are causing Americans to map out their exit plans. 

However, motivations to leave the states aren’t based only on the negatives. Many Americans are simply looking for a change of pace and a new type of lifestyle. Remote work expanded everyones geographical horizons. Regardless of the reason, one thing seems certain in these uncertain times — the American dream for many now resides outside U.S. borders.

So where are Americans heading? Well, Many Americans are moving to Portugal — Let us explain why.

Since 2016, interest in Portugal has been growing rapidly. Portugal has become the preferred destination in Europe for US citizens looking to relocate. 

Why are so many Americans moving to Portugal?

Americans Living in Portugal

Ease of Getting Portuguese Citizenship

Portugal has become a top-choice European country for Americans Expats, Nomads and Retirees in recent years for many reasons. Portugals fast and straightforward pathway to citizenship certainly plays a factor. After 5 years of residency those who speak a basic level of A2 Portuguese language can apply for citizenship. Providing Americans with the chance to acquire a top-tier second passport with visa-free access to 188 countries. Plus, Portugal as an EU country ensures the right for naturalized citizens to live, work, study and conduct business freely in all 27 European Member States. Opening up the doors to the entire European continent.

Dual citizenship provides an extra layer of security for individuals and family members. Global mobility is magnified, business and investment opportunities become abundant, and job and education opportunities expand. For Americans, having a Portuguese passport and EU citizenship is striking global mobility gold. Citizenship in two of the most powerful world economies — the European Union and the United States — is undeniably advantageous. 

An Abundance of Residency Programs

Portuguese is very welcoming in terms of immigration. A wealth of residency pathways attractive to Americans moving to Portugal. In fact, last year Americans made up the number 1 spot in volume of Portugal Golden Visa applicants, displacing China for the first time in history.

Other visa pathways include the D7 Visa (passive income or wealth visa), D2  Visa, and most recently the Digital Nomad visa. Overall, it’s not particularly difficult for Americans to obtain residency in Portugal through one of these routes and within just 5 years they can become Portuguese citizens. 

Here’s a quick overview of the most common visa pathways Americans tend to take to live in Portugal: 

  • Golden Visa: Invest between 280,000 to 500,000+ in real estate or €500,000 into Investment funds in exchange for residency in Portugal. Investors are required to spend just 7 days in the country per annum and can apply for citizenship after just 5 years of residency.

  • D7: A passive income visa aka wealth visa, perfect for Americans retiring, pensioners, or anyone with enough wealth to meet the economical requirements to live stably without being employed in Portugal.

  • D2: The visa for entrepreneurs or freelancers who have enough funds to open and operate a business in Portugal.

  • Digital Nomad Visa: The newest visa pathway to come into play, targeted at remote workers employed by foreign companies who can prove a minimum income. 

Portugal’s Affordable Cost of Living

For some it all boils down to cost. Portugal is significantly more wallet friendly than the United States and other European countries. Remember in the late 80’s when Americans could afford to migrate West to California? Fast forward to the 2020’s, Californian’s are exiting in the masses because they’ve been priced out of their beloved Golden State. Now, they’re moving to Portugal to embrace Europe’s Gold Coast and it’s relatively low cost of living.

Bloomberg wrote an article in 2022 titled, “Americans Who Can’t Afford Homes Are Moving to Europe Instead.” A title that says in all. In the past, there were the occasional Americans retiring in Europe, now Americans of all ages are flocking back across the Atlantic. Remote work enabled young professionals to go abroad— leaving behind the days of low starting salaries in over-priced cities just to make ends meet. High quality schools offering American curriculum has made it possible for families to head to Portugal. Enroll children in school where shooting drills aren’t the norm, and have the means to save for their college. Or don’t, because they’ll be eligible for EU universities as EU citizens and the cost is pennies compared to even the cheapest U.S. universities. 

The average monthly cost of living is less than $1,500 for a single person and around $3,000 for a family. Let’s face it, in America rent/mortgage exceeds those costs. Factor in the rising cost of groceries, transportation, medical bills, entertainment, clothes and more on top of housing. Many Americans reported 100k annually is the minimum they need to feel like they’re making it these days. Life in Portugal can be very comfortable on such a salary. 

Affordable Real Estate Investments

Let’s analyze the cost of housing for a moment to understand how the cost of living in Portugal compares to the States. An American can invest from €280,000 (just over €300,000) in real estate in a low-density area of Portugal through the Golden Visa Program. This investment comes with the property, legal residency, along with access to stellar Portuguese healthcare system and educational system, and eventually Portuguese citizenship. We could adequately compare a low-density area of Portugal to the low cost state of West Virginia where average home costs are $312,000 according to realtor.com. Costs about the same, right? But although West Virginia is a naturally gorgeous state, buying a home there will not offer foreign citizens a U.S. passport or even a residency visa, and it certainly will not give anyone access to a free healthcare system. And, while the rolling green hills are certainly a sight to see, it’s ranked as one of the poorest states in the nation with some of the lowest scoring educational systems and a major drug epidemic. A situation Portugal relieved itself of back in the early 2000’s. 

Likewise, investors can invest into commercial property such as hotel projects and office buildings in the bustling cities of Lisbon and Porto for €350,000 (just over $350,000). Granting the same aforementioned benefits through the Portugal Golden Visa Program. It’s no wonder Americans are taking their money and investing in real estate that additionally grants them a residence permit in an EU country.

Golf Property Algarve
Luxury real estate in Algarve region

Can Americans Still Move to Portugal on the Golden Visa?

The government recently announced their plans to close the Portugal Golden Visa entirely. While many would argue that the billions of dollars the golden visa brings into the economy each year couldn’t possibly be worth it, it looks like it is actually happening! 

The government stated these severe measures are an attempt to combat inflation paired with a housing shortage that is pricing Portuguese citizens out of their cities. Although, the vast majority of investors are currently choosing to invest in commercial property like hotel projects. Such projects bring in a huge amount of jobs to the country each year and increase tourism. Giving us some hope the commercial real estate option will remain.

In fact, in 2022 the Portuguese government changed the golden visa in a previous attempt to combat the housing crisis. Residential property investments in the major cities were no longer eligible golden visa investments. Currently, you cannot purchase residential property in Lisbon, Porto and the vast majority of the Algarve.

The government stated they may also introduce rules for existing golden visa residents. Possibly preventing residency permit renewal if they rent their property through short term rentals such as AirBNB.

At the moment scraping the Portugal golden visa is merely a proposal which must be voted in by parliament. Low and behold, there will still be plenty of ways to secure a long term Portuguese visa for those hoping to actually live in Portugal whether through a passive income visa, digital nomad visa or a reconstructed golden visa.

But, Act Fast!

For investors interested in acquiring citizenship in a European Country without the need to physically reside there, this really is the last option on the table and time is running out!

The Cypriot program was closed a fews year ago, while Bulgaria and Malta program costs rise above €1,000,000 with fees and long term costs.

Golden Visa programs in Greece, Spain and Malta remain great alternatives for those looking to acquire long term residency in Europe with no minimum stay requirements. However, only residents who actually live in these countries can get on a pathway to citizenship.

 

Quality of Life in Portugal

Americans in Portugal

It’s no wonder Americans are so drawn to this country on the Iberian Peninsula — loads of Portuguese wine, delectable cuisine, gorgeous scenery and exceptionally friendly culture. Portugal offers activities and enjoyment for every age, all the while feeling safe and being affordable.

Culture and Cuisine

300 days of sunshine per year adds to the happiness factor. And while, Portuguese is the official language, English is widely spoken so you can get by just about everywhere. The cuisine is something to be doted on. Fresh fish, regional vegetables from open air produce markets, port wine and delicious dishes heavy on the carbs. 

The people make the place — this is absolutely the case in Portugal. Portuguese people place heavy emphasis on relationships and this is felt by expats. Less emphasis on time, and Americans in Portugal come to appreciate life without the constant need be rushed and in a hurry. The people are super friendly, chatty and fun. Leading us to mention the flavorful nightlife filled with dancing, laughs, drinks, music, and beach bars. A good time is always in reach in Portugal.

Americans in Portugal

How Safe is Portugal?

When in comes to crime and safety levels, Portugal is undeniably safer than even the safest parts of the United States. Let’s again look at San Francisco for example compared to Lisbon. Lisbon is significantly safer with a numbeo crime index score of 29.63 versus San Fran’s 61.31 score. Those statistics alone should have you beating it to your local Portuguese consulate. In fact, Lisbon is said to be Europe’s safest city. Tourists and Portuguese citizen alike should always be cautious of pickpockets, but violent crimes are little worry.

Overall, American expats in Portugal are thriving. Affordable, safe, beautiful and filled with things to do. Life in Portugal is considered to be simpler and at a slower pace than the States. Likely why Americans are moving to Portugal in droves and headstrong on securing EU citizenship.

Where can you find Americans living in Portugal?

So what’s the best Portuguese address for Americans living in Portugal? American expats usually reside primarily in Portuguese cities.

Due to reasons of accessibility to transportation, ease of operations, opportunity for education and employment and better exposure to Portuguese culture. It all depends on what you’re looking. Whether its a spot on mainland Portugal like Lisbon or Porto, somewhere along the Algarve coast, or the digital nomad haven of Madeira, each area offers a different taste of expat life. Visit Portugal and explore options before pegging down which area to move to!

Porto is considered to be the tech city of the country situated on the desirable Silver Coast, which some refer to as the “real Portugal.” While Sintra is a Lisbon suburb attractive to expat families wishing to be in close proximity to the city center without the daily bustle. Then of course you have the digital nomad village on Madeira island with co-working spaces aplenty, long term leases and speedy internet. Braga is another favorite for Americans living in Portugal, many foreign residents can’t resist the ancient allure of this historical city. Others moving to Portugal opt for quaint fishing villages like Nazare and Cascais. 

Madeira, Portugal
Breathtaking Madeira island, Portugal

FAQ’s

Is Portugal welcoming to Americans?

The Portuguese people are incredibly great hosts — warm, welcoming and friendly. Their warmth extends to tourists and foreign residents alike.

How much money do you need to live comfortably in Portugal?

The affordable cost of living in Portugal is alluring foreigners to this Western Europe country. Rent in Portugal is pretty low cost compared to the states. A couple can live in Lisbon for just under $3000 a month and be relatively comfortable. While a single person could live in the Algarve region for around $1500/month. While prices have risen significantly due to inflation living in Portugal is still relatively low cost.

Can an American just move to Portugal?

You American passport allows you to enter Portugal and stay for up to 90 days visa free. To stay longer than this, you’ll need to secure a residence permit. The requirements varying depending on which Portuguese visa route you pursue, however they are fairly standard such as having a clean criminal record, obtaining private health insurance, and having income almost double the Portuguese minimum wage.

Lincoln Global Partners can help you figure out the best residence permit to fit your particular situation.

What’s the timeline of getting Portuguese Residency after a Golden Visa?

The Portuguese Golden Visa program has been a favorite for investors to become a Portuguese citizen through real estate investment. Typically the entire process takes approximately 12 months. However, the Portuguese government recently announced they plan to suspend the golden visa and there has been a sudden surge in applications. Those interested should move early to stay ahead of the curve.

Do you pay taxes as an American expat in Portugal?

Americans living in Portugal or anywhere abroad are still required by the IRS to file U.S. taxes and show their worldwide income. The taxes you pay in Portugal will depend of which type of residence permit you have. Americans who actually live in Portugal, such as those on a D7 visa, will need to become tax residents. However, this doesn’t necessarily mean you must pay tax. New residents in Portugal can apply for Non-Habitual Residence Status and enjoy a number of tax incentives. A global tax advisor will be able to guide you.

How many expats are living in Portugal?

In 2022, Portugal expats numbered around 661,000. That’s about 6.5% of the population. Over 7,000 Americans live in Portugal currently, and that number is quickly rising.

Do you need to speak Portuguese to live in Portugal?

The Portuguese language is the official language of Portugal. The Portuguese government conducts affairs in Portuguese. However, English is widely spoken and American expats who don’t know the Portuguese language can easily get by. Still, be encouraged to learn a few key phrases out of respect for Portuguese culture. Those that wish to apply for citizenship must be able to speak a basic A2 Level of Portuguese which is easily achievable in 5 years.

Ready to move to Portugal? Lincoln Global Partners can help

Interested in a free consultation with one of our residency & citizenship by investment advisors to understand how you can move to Portugal and secure dual citizenship? We can guide you on how to obtain the right residency visa to live in Portugal or another EU country.

 

Kathryn Funk

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