Portugal has slipped in the ranking of countries that attract people living on passive income, dropping from first to fifth place in the Global Retirement Index 2026 published by consultancy Global Citizen Solutions. Uruguay, Mauritius, Spain and Costa Rica have all moved ahead.
Despite its name, the index covers a much broader group than retirees. It compares 46 residence permit programmes for people who live on income earned outside their host country, such as pensions, rental income, dividends and interest on savings. Portugal is represented by its D7 visa, which has attracted people of all ages, not just retirees.
There is no need to panic just yet. The differences between the leaders are almost negligible: Uruguay scores 99.9 points, while Portugal has 99.3. The gap between first and tenth place is just four points. A direct comparison with last year is not entirely fair, either, as the index then covered 44 programmes and used a different scoring scale.
A closer look at Portugal’s scores reveals a fairly clear picture. It continues to perform well on citizenship and freedom of movement, ranking fourth, and quality of life, where it comes sixth. Its weak spots are taxes (41st out of 46), bureaucracy (32nd) and the cost of living (35th).
Taxes are a major part of the story. In the past, new residents could benefit from the NHR scheme, a preferential tax regime for newcomers that, for example, allowed foreign pension income to be taxed at just 10%. Since 2024, no new applicants have been admitted to the scheme. Its successor, IFICI, does not cover pensions. New retirees therefore pay Portugal’s standard personal income tax (IRS), with progressive rates ranging from 12.5% to 48%.
Processing times are an even bigger problem. Applicants for a D7 residence permit currently wait 18–24 months, or a year and a half to two years, from submitting their paperwork to receiving their residence card. In Spain, a similar visa typically takes four to eight months. And then there is citizenship, where things have become even less appealing following an increase in the required residency period. This has had little impact on Portugal’s ranking, however, since most foreigners in Spain also have to wait 10 years to become citizens.
The D7’s main advantage remains intact. Applicants must demonstrate a monthly income of €920, compared with €2,400 for Spain’s equivalent visa — more than two and a half times as much. For someone living off rental income from a property back home or modest dividends, that difference can be decisive.
