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Best Cities for Expats 2021 – No. 3 Lisbon is a bargain for highly skilled internationals, but increasingly expensive for locals

Lisbon

We know what you’re thinking … Lisbon is only No. 3? Well, a lot of cities have upped their games since we started our Top 5 Cities in Europe for Expats list back in 2017. And we’ve visited more cities in person, which can be enlightening and change opinions. Finally, Lisbon is in danger of becoming a victim of its own success … increasingly expensive, with an influx of expats driving the cost of living higher and turning the city into a hipster Mecca.

Let’s say it out loud: If you ask British expats, Portugal – along with Spain – would be at the top of the list. Now, American digital nomads are flocking in to Lisbon and Porto.

Lisbon, with its culinary scene, its digital design centers and its startup scene is arguably the most popular expat destination in Europe at the moment. Which is why Dispatches has three contributors in Lisbon.

Since our first list, a number of cities have priced themselves off our main list, including Antwerp, Eindhoven and Rotterdam. We fell out of love with Tallinn because it’s too small, too remote and too far north.

So, now we’re looking at Tier 2 cities that are close to the action. Because expat life should be an adventure, not a burden.

For 2021, cities are ranked by six metrics, each worth 100 points:

• overall cost of living benchmarked against London, the most expensive city in Europe outside of billionaires-only outliers such as Geneva and Monaco.

• availability of housing, affordability of rents and a reasonable quality of life

• density of talent and serious career opportunities with a prominent university driving innovation and creating tomorrow’s talent as in the Silicon Valley model

• the percentage of people who speak English, the language of business

• availability of international schools

• corruption: the fewer the problems, the higher the score

So, 600 would be a perfect score, which no city has ever achieved. (Terry Boyd also contributed to research for this post.)

The truth is, living in Lisbon can give you a great quality of life but not if you are earning a basic Portuguese salary. This will be a harsh reality to adapt to, especially if you’re coming from a country with “normal” wages and a collaborative work culture.

But for Dispatches’ highly skilled internationals, this is one of the most affordable cities in Europe, not to mention one of the most active and attractive.

So, how does Lisbon score? Five hundred and ten points out of 600 possible puts it in the No. 3 spot on our list.

Overall cost of living compared to London – 100 points

Lisbon is much more affordable than London when comparing rent, entertainment, real estate, eating out and groceries. Beer, for example, is half the price of London, according to crowd-sourced data platform Numbeo. Ditto for wine. Cars, shoes and clothes are about the same, with prices in Lisbon only slightly lower. However, salaries in Lisbon are about one third of what one would earn in London, according to Numbeo.

Numbeo’s crowd-sourced data indicates the cost of living in Lisbon is roughly half of the COL in London. So, that gets Lisbon a 100.

Quality of life/housing – 80 points

Quality of life in Lisbon is high if you earn a substantial salary, which is unlikely unless you are in an executive or managerial role. About 60 percent of the average salary goes to rent and the rest on groceries, transport and other basic needs. For instance, the average net salary in Lisbon is about 1,300 euros, but a one-bedroom apartment goes for 800 euros or so. Compare that to our benchmark city of London, where rents start at 1,270 pounds, or about 1,500 euros, for a one-bedroom outside the city center.

Groceries for a single person cost about 180 euros monthly. Add another 200 for utility bills and transport, and the average Portuguese worker doesn’t have much left.

Now, if you’re a highly skilled executive, engineer, manager or whatever who’s been working in London, Amsterdam or Stockholm, this place is crazy cheap. Yet it has world-class arts, fabulous food and access to travel destinations in Portugal and Spain. And if you’re a digital nomad, there are still sufficient local accommodations. Which is why Lisbon is so popular, though that popularity is increasingly a double-edged sword.

You can see more about the best neighborhoods in Lisbon here.

Talent and serious career opportunities – 90 points

There are a lot of job opportunities in Lisbon due to the many international companies here. There are also plenty of language-specific jobs like customer service for outsourcing companies such as Teleperformance. However, many expats struggle with the old-fashioned, hierarchical management in Portugal.

Almost every major tech company and consulting company has a presence in Lisbon. Siemens has a major tech hub in Lisbon with positions in cybersecurity, artificial intelligence and robotics. You can see all the openings here.

Volkswagen has their Digital Solutions Hub in Lisbon. You can see the career opps here.

Mercedes-Benz has its Digital Delivery Hub in Lisbon.

The startup scene is big in Lisbon, due to the various incubation programs and funding incentives. Unbabel, Uniplaces, Talkdesk, and Zaask are all Portuguese startups. The Gen Z generation in Portugal is talented, ambitious, open-minded and motivated. There are excellent universities that drive their students to become future leaders, such as Universidade Nova de Lisboa (for business and economics) and Instituto Superior Técnico
MHSE (for technology).

Last but not least, any city with Web Summit is destined to get blow-out pub at least once a year.

Prevalence of English – 70 points

Expats struggle with the lack of English spoken in Portugal, mostly because of the bureaucracy people go through (including Portuguese people). It seems like everything is in Portuguese – even the tax authorities’ website, which is used by everyone living in Portugal, including expats. Setting up a business in Portugal must be done in Portuguese.

That being said, most people do make an effort to speak English if they can see that you are struggling with Portuguese, although you will encounter some that absolutely refuse. Sadly, those are usually the people working at the immigration office, tax office and other bureaucratic places that prefer to communicate only in Portuguese.

Still, Portugal is ranked No. 7 on the EF English Proficiency Index of English skills out of 34 European countries, ahead of Germany and just behind Austria. Portugal’s ranking has risen every year since 2018.

International schools – 100 points

There are 24 international schools in Lisbon and the greater Lisbon area. Some are country- and language-specific, such as German schools or French schools, while others don’t focus on being a country-specific school but rather follow a holistic approach to learning, such as United Lisbon.

Corruption – 70 points

Portugal ranked 33 on the Transparency International List in 2020 with a score of 61 out of 100, right after Spain. That places Portugal mid-pack among the rankings of EU countries and comparable to Spain, so we’re giving it 70 points.

With 510 points, Lisbon is working its way up the list to No. 1.

Read more details here about why Lisbon is a winner with expats, especially those who want to join startup teams.

See all our Lisbon posts here in Dispatches’ archives.

See the intro to the Top 5 Cities for Expats list here, which includes details on the runner-up cities.

Read about No. 5 Valencia here.

Read about No. 4 Leuven here.

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