In just a few decades, the two largest countries on the Iberian Peninsula have undergone profound changes, transitioning from political isolation to democratization and economic openness in the mid-20th century, and further solidifying their positions as important players on the continent with their 1986 accession to the European Economic Community (EEC).

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‍These shifts laid the groundwork for an influx of foreign investment and created growing opportunities for professionals in finance, technology, and trade. More recently, initiatives such as Spain's Ley de Emprendedores and Portugal’s Golden Visa program have transformed these nations into magnets for a broader range of internationals seeking long-term residency. Today, digital nomads, tech entrepreneurs, and retirees are drawn to the unique blend of affordability, lifestyle, and opportunity offered here.

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As of 2025, Portugal’s thriving tech hubs in Lisbon and Porto and Spain’s dynamic startup scene in Madrid and Barcelona continue to offer relatively affordable living costs, excellent healthcare systems, and progressive initiatives like digital nomad visas and tax incentives, making the Iberian Peninsula an excellent choice for those seeking a well-balanced lifestyle with the sun-drenched charm of southwestern Europe.

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What are the most popular reasons for moving to Spain?

En masse, skilled immigration to Spain occurs in sectors such as tourism and hospitality, tech, finance, and healthcare. Internationals who have moved here or are considering it often cite the following reasons for choosing Spain as their destination:

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• Accessible residency opportunities. While acquiring Spanish citizenship takes at least 10 years, the country offers other options for foreigners who would like to settle here long-term, such as the Non-Lucrative visa for external retirees and passive income earners, Employment visa for hired professionals, Golden visa for investors, and Digital Nomad visa for remote workers.
• High quality of life. With its affordable cost of living compared to many Western nations, Spain combines a laid-back lifestyle with a rich cultural heritage, where relaxation, community, and an appreciation for life's pleasures are deeply valued. Together, these factors create a nurturing environment for those eager to escape the intense and unfulfilling pressures of their work lives elsewhere.
• Attractive educational and healthcare systems. Expats seeking long-term residency in Spain with their existing or potential families often highlight the versatility of public, semi-private, and private educational opportunities for children of all ages, including international schools that follow American, British, French, and German curricula. Additionally, some schools offer support for students with special educational needs (SEN) and boarding facilities. In turn, Spain's healthcare system delivers high-quality services at affordable rates in both the public and private sectors, which is especially important for retirees and digital nomads who may not have a permanent employer providing health insurance.

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What are the most popular reasons for moving to Portugal?

With similar climates and comparable living costs, Portugal offers a unique allure for expats compared to Spain, particularly when it comes to safety in large, tourist-heavy cities and its attractive residency options for professionals and entrepreneurs:

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• Favorable tax policies for foreign citizens. Portugal’s Non-Habitual Resident (NHR) tax regime offers significant tax advantages for new residents, particularly for retirees and professionals in high-demand fields. Individuals working in engineering, architecture, medical science, technology, and finance can benefit from a flat 20% tax rate on Portuguese-source income.
• ‍Safety in large cities. Expats who choose the Iberian Peninsula for its idyllic climate but prefer to reside in urban areas often find that major Portuguese cities offer more peace of mind compared to Spanish cities with similar populations, especially when it comes to incidences of theft targeting foreigners and property scams.‍
• Attractive options for short- and long-term residency. Portugal’s Digital Nomad Visa is better suited for mid-range earners and those with foreign-sourced income than its Spanish counterpart. When it comes to long-term residency, possible pathways include the Employment Visa for hired professionals, the Startup Visa for entrepreneurs, and the D7 Visa for individuals with passive foreign income. As for the Golden Visa program, in 2025 it no longer applies to real estate purchases, but holders can still obtain residence permits through investments in Portugal’s cultural heritage, local businesses, research activities, or investment fund shares. It is possible to apply for Portuguese citizenship 5 years after receiving a residence permit.

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What is life like for expats in Spain and Portugal?

The expat community in Spain mostly favors the country’s capital, Madrid, along with major cities such as Barcelona, Valencia, and Seville, or coastal destinations like Malaga. While English is widely spoken in cosmopolitan settings and tourist areas, proficiency in Spanish is essential for effective communication in daily life, especially in regions less reliant on the seasonal influx of vacationers. Expats who attempt to integrate into the local community come to appreciate regional diversity, a focus on quality rest and meaningful daily interactions, and the country’s many vibrant festivals, which become seasonal highlights for locals and foreigners alike.

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Portugal’s major hubs for expats include the capital city of Lisbon, as well as nearby Cascais, the country’s second-largest city, Porto, the coastal town of Albufeira, and Funchal, located on the relatively distant yet stunning island of Madeira. Ranked 21st in the 2024 list of best countries in the world to be a woman, Portugal continues to uphold progressive values while proudly celebrating its cultural heritage. The country is known for its emphasis on tranquility, cordiality, and its warm, welcoming attitude towards newcomers from around the globe. English is widely spoken in internationally populated cities, but knowledge of Portuguese is recommended to navigate daily life, especially in less urban areas.

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After all...

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Spain or Portugal? A checklist of factors to consider before making your final decision

Choosing between the two countries is a deeply personal decision, influenced by individual circumstances, priorities, and potential dealbreakers. However, as an experienced EOR and immigration support provider, we recommend comparing the following factors and aligning them with your residency goals.

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• For professionals seeking local employment or relocating for work-related purposes—compare netto (after-tax) salaries in Portugal and Spain. This can be calculated using our Payroll Estimator tool.
• For business owners and investors—consider tax rates and visa options that best suit your business activity and income level.
• For companies seeking the optimal destination for their high-value talent—research employer tax rates and mandatory benefits.

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Work-related relocation to Spain or Portugal gets faster, easier, and more cost-effective with Acvian. To employers, we offer an EOR solution: we hire and manage teams in Spain or Portugal on your behalf without the need to establish a legal entity. For employees and remote workers, our Umbrella Company solution works best: we handle your employment, allowing you to live and pay taxes locally while working for a foreign employer.

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Our team has an in-depth understanding of the local landscape, is happy to provide you with detailed information, and can recommend the optimal destination for your specific case. Book a meeting with our expert or submit a request form, and we’ll be in touch with you soon!