Portugal and Spain, the two main countries on Europe’s Iberian Peninsula, offer attractive options for long-term residents such as business owners, digital nomads, and expatriates. Both countries feature progressive income tax systems but differ notably—Portugal’s tax rates range from about 13.25% to 48%, with a special IFICI regime taxing innovation income at a flat 20% and no wealth tax, while Spain’s rates vary regionally between 19% and 47%, including a wealth tax and the Beckham Law offering a 24% flat rate for certain foreign employees.
Visa options differ as well: Spain launched a dedicated Digital Nomad Visa in 2023, while Portugal provides alternatives like the D7 and D8 visas. Portugal also offers faster citizenship after five years compared to Spain’s usual ten. Cost of living and real estate are generally more affordable in Portugal’s cities like Lisbon and Porto than in Madrid and Barcelona.
Lifestyle contrasts include Portugal’s relaxed, friendly urban environments with growing tech hubs, versus Spain’s vibrant cosmopolitan cities rich in cultural activities. Both countries have strong healthcare systems, though Spain’s may be more developed in major urban centers. Ultimately, Portugal appeals for tax simplicity, faster citizenship, and affordability, while Spain offers diverse visa pathways and a lively social scene, allowing prospective residents to choose based on their professional goals and lifestyle preferences.
