'A cool destination to just start over': Burned-out millennials are flocking to Portugal
Alexandra Ryan-Yavaşca wanted to settle down in her childhood hometown of San Diego, California, to raise a family with her husband Utku.
But due to soaring housing costs, the 34-year-old can't afford to live there like her parents — a teacher and public relations professional — could on middle-class salaries. Her childhood home, purchased in 1996 for more than $300,000, is now worth more than $1.2 million.
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In the summer of 2021, the Yavaşcas moved to Lisbon, Portugal, citing the affordable cost-of-living and laid-back culture as key reasons.
"It's liberating to leave America," Alexandra says. "Where can you live in the center of the city in America and look at the ocean and eat fresh seafood and work in your freelance entrepreneur lifestyle?"
The Yavaşcas are part of a wave of expats and digital nomads settling in Portugal in search of a better life. The number of foreign citizens living in Portugal — more than 714,000 — is at an all-time high, making up about 7% of the population in 2021, according to the Portuguese Immigration and Borders Service.
The number of Americans residing in Portugal is at its highest level in more than a decade, according to agency data. There were about 7,000 Americans living in the country at the end of 2021, more than double three years earlier. The U.S. is the 24th most represented country among foreign residents in Portugal.
As the pandemic and remote work transform the way we live and work, people are moving and changing careers based on what fulfills them most.
"Previously, it seemed like Portugal was the destination to retire. And now it seems like it's a cool destination to just start over," says Mateusz Zurek, 35, who moved to Lisbon from Poland in early 2021 to co-found a restaurant with his American-Canadian business partner, Jahmarley Grant, 28. "The barrier to entry, to open a business is super low," Grant adds.
I've spoken to dozens of people who moved to Portugal in the last few years, to start a new venture or revamp their lifestyle. Many spoke about their move with a sense of renewal and hope, like they could finally live the life they envisioned, one that seemed unattainable where they came from.
What is it about this small European country, about as populous as the state of Georgia, that holds so much promise for so many people? In late 2021, I traveled to Portugal for the first time, to find out.
Portugal is cheaper than many Western countries
What many foreigners say draws them to Portugal is its low cost of living and high quality of life. If a basket of goods and services cost $1 in the U.S., it would cost 57 cents in Portugal, according to 2020 World Bank data.
The reason Portugal is cheaper than many Western countries is because the country "is poorer," says Portuguese economist Ricardo Reis, a professor of economics at the London School of Economics and Political Science. "A lot of the costs of the services that you buy are labor costs. Portugal's poorer. Wages are lower. Therefore the costs of most things that require a lot of labor are cheaper."
As an American tourist from Los Angeles, California, daily living in Portugal feels cheap. One evening, I enjoyed a three-course meal — including soup and salad, fresh fish, ice cream, and sangria — for about $17, in the small seaside town of Carvoeiro. A three-hour boat ride along the Algarve coast cost $30. An Uber ride across town in Lisbon at nearly 1 a.m. on a Friday night set me back about $19. In comparison, I cry inside anytime I need a late night Uber in Los Angeles or New York City, my previous home — typically costing me $50-$70.
I met a few Americans who have significantly upgraded their standards of living since settling in Portugal.
Samantha Hayden says she always lived in a "closet-sized space" in Singapore and New York City. After moving to Lisbon in the summer of 2021, the 32-year-old consultant now rents a three-story house, complete with two offices, a dining room and a garage, just outside the city center.
Shar Wynter spent three months in Lisbon in 2020, before officially relocating from Atlanta, Georgia in the summer of 2021. The 37-year-old's monthly expenses now range between $2,100-$2,500/month, compared with $4,000-$5,000/month in Atlanta. She spends $1,250/month on a renovated one-bedroom two-bathroom apartment in the city center, with a balcony and plenty of natural sunlight. In contrast, Wynter was paying $1,800/month for a studio apartment in Atlanta.
Foreign residents also have access to the country's free national healthcare.
'I came here for a lot of healing'
Portugal is often referred to as "the California of Europe." Except you get California temperatures and beaches without California prices. I visited in October and enjoyed sunny 80-degree weather for 10 days straight.
There's natural beauty, but also culture. Expats tell me they haven't struggled to assimilate. Much of the Portuguese population speaks English because they learn it in school from an early age and they're generally welcoming to foreigners.
Portugal is also safe. The country ranks as the fourth-most-peaceful nation in the world on the Global Peace Index, which assesses things like crime rate, violent demonstrations, political stability, and involvement in domestic and international conflict. The U.S. ranks #122.
Racial violence in the U.S. motivated Wynter and her friends to move to Portugal. "Black Americans will normally find that they're treated well here and won't have the same type of lethal racism that you see in the U.S.," Wynter says.
"I really came here for a lot of healing, honestly," says Diara Parker, a 32-year-old equity consultant who moved to Lisbon from Madison, Wisconsin in early 2021. "Healing from past traumas, healing from all of the things that make the U.S. the U.S. — that in a lot of ways keep us in these really rigid boxes. And for me, as a black woman doesn't really give me the space to thrive, and to be my full, authentic self."
I also spoke to many expats recovering from burnout, who told me they're finally able to find personal fulfillment beyond work.
"I used to almost fear requesting vacation. And here, my office is shut in August," Hayden says. "Especially in a lot of big cities in the States, there's a real focus on the grind, and kind of getting ahead and rising up the ladder. I think here, there's definitely a much more balanced approach. Family is huge. Spending time with friends is huge."
As a freelancer living in Lisbon, Ryan-Yavaşca says she doesn't have to work eight-hour days to get by. That frees her up to prioritize her family and well-being.
"We alternate sometimes who works, who takes care of our child. And we don't have to check in with anyone," she says. "Coming from America, this is impossible. I couldn't just take days off, say I'm closing my computer for the next four days to go on a meditation retreat."
Parker says she's finally learning to savor all the simple moments in life. "I never thought that I would enjoy hanging up my laundry outside … and to pull out the clothes and to smell the fresh air. To be able to focus on myself and thrive as a full human that's not just a worker bee is life-changing, really."
'I wouldn't have started this business in America'
Despite the laid-back culture, a lot of young workers aren't moving to Portugal to slack off. It's somewhere many expats feel capable of taking a risk and starting a new venture.
When you can afford to live somewhere comfortably without working around the clock, "I think it makes it a lot easier to have space to pursue your creative entrepreneurial desires and aspirations because you have time," Wynter says. In December 2021, she launched the Xpat App, a mobile app that connects black expats around the world.
During the pandemic, Margo Gabriel was laid off from her job in academia. Then the 35-year-old moved from Boston, Massachusetts, to Lisbon in 2020, where she can finally "pursue a lot of my creative projects that I've had on the back burner for literally years," she says. Gabriel is now a full-time freelance food and travel writer, whose clients are mostly based in the U.S.
In 2021, the Yavaşcas launched Sebze Lisboa, an Anatolian and vegetarian kitchen that caters events, fills to-go orders, and hosts pop-up dinners. "I wouldn't have started this business in America, because first of all, there's food regulations, business licenses, high fees to get things started," Alexandra says. "There's so much bureaucracy and red tape that you have to go through that I can't even imagine in two weeks, we could have a start-up business."
In contrast, "starting businesses is quite easy in Portugal," says economics professor Reis. "You can open a business in one hour with a relatively limited amount of paperwork."
Portugal is becoming increasingly known for its start-up scene, mostly concentrated in Lisbon. Funding to tech startups headquartered in the country grew to over €180 million in 2021, up from about €1.2 million in 2016, according to the 2021 Portugal Startup Outlook.
According to the report, a third of founders who established startups in Portugal between 2015 and 2020 were not Portuguese.
Many Portuguese locals 'are very frustrated'
As more people come to start anew and build their dreams, Portugal as a country is also undergoing a dramatic transformation. I saw lots of cranes and construction in Lisbon, bringing to life the infrastructure necessary to serve the city's new inhabitants and visitors.
In some ways, the city is getting a whole new lease on life. And in other ways, what makes Lisbon authentically Lisbon is being stripped away.
Tech sales executive Luisa Pilo has lived in Lisbon on and off for more than 30 years. She says she has seen the city transform dramatically in that time — from a "quiet city, small town … in need of a lot of love" to a much more "cosmopolitan" hub.
Pilo says the influx of new residents and tourists has resulted in a "better city, more mobility, better housing." She describes her life as "better, more colorful."
But not all this change is positive. Many locals and small businesses have been priced out of the city center due to rising rents. Furthermore, many apartments have been taken off the market and converted into short-term vacation rentals.
Living in Portugal isn't cheap for those earning local wages. The monthly minimum wage is about $800. The average annual wage in 2020 was about $28,000, according to OECD data.
"They are very frustrated. If you talk to a lot of Portuguese, especially before the pandemic when tourism was booming, people were fed up," Pilo says.
Overall, Reis says the growth in foreign residents and tourism has a positive impact on the country, because it stimulates the economy and helps create jobs. "You have people that come with high skills, that come with desires to create businesses, that come with buying locally produced goods," he says.
Lifting Portugal out of recession
Attracting foreigners was all part of a government plan to help lift Portugal out of recession in the 2010s. As recently as 2015, people were not moving to Portugal for a better quality of life and more opportunity. In fact, young workers were leaving the country.
"Between 2010 and 2012, Portugal went through a fairly deep recession associated with a sovereign debt crisis," Reis says. "What that implied was that the lack of job opportunities, as well as quite large increases in taxes to pay for those past debts — led to many young professionals especially to leave the country looking for jobs, a little bit all over the European Union in particular."
Unemployment peaked at about 18% in 2013, while GDP shrank three years in a row, between 2011 and 2013.
To help stimulate the economy, Portugal welcomed immigration in a couple different ways: the relative ease of obtaining a residence visa and tax benefits for new foreign residents.
Moving to Portugal is relatively easy
The most common visa, the D7, requires applicants to show monthly income of at least the Portuguese minimum wage, currently €705. Demand for the D7 has "increased exponentially in the last two to three years," says Mary Kuffel, an investment advisor at Get Golden Visa.
She notes the D7 is "very attainable" with proof of income, and getting one doesn't involve too much bureaucratic headache. The entire application and approval process typically takes around six to seven months, says Bernardo Corrêa de Sá, legal counsel for Get Golden Visa.
Another increasingly popular option is the Golden Visa, for those who invest €250,000 to €1.5 million in real estate, an investment fund, a charitable donation, or other options.
After five years of holding a residence visa, you can apply for permanent residency and then citizenship. The relative ease of obtaining a Portuguese visa makes it one of the most popular options for foreigners seeking a European passport, Kuffel says.
Corrêa de Sá says he has numerous U.S. clients seeking D7 and Golden visas in order to obtain EU citizenship. "They want a plan B … for political reasons, for safety reasons."
Portugal is incentivizing immigration by giving foreigners a tax break under what's called the non-habitual resident tax regime. New foreign residents are tax exempt on any taxable income they receive from abroad. That means, if I moved there, I would not pay taxes in Portugal on the income I earn from CNBC for the next 10 years, as long as I'm being taxed in the U.S.
These incentives seem to have worked. But very few people I spoke to mentioned them as reasons for moving. Their motivation was the promise of a better life.
Growing up, I mostly heard about people moving to the U.S. to chase the American dream. But now it seems like many Americans are chasing that dream elsewhere, like in Portugal.
The article "‘A Cool Destination to Just Start Over’: Burned-out Millennials are Flocking to Portugal″ was originally published on Grow (CNBC + Acorns).