Living in Madeira: Portugal’s most exciting hidden gem

Living in Madeira for the long-term was high on my list of life goals, back in the midst of the pandemic.

And now 2023 has come around, I’ve been happily living on this paradise island for over two years.

Funchal, the Madeiran capital, was the perfect place to wait out the worst effects of the pandemic and the resulting lockdowns.

I also believe that Madeira has excellent long-term potential as a digital émigré destination.

It’s one of the safest spots in Portugal (practically no crime!), which itself is one of the world’s safest countries.

Before I arrived in Madeira, I had no idea to what to expect. But after just a few months, I’d decided to make it my main base while working towards getting Portuguese citizenship.

So you’re probably wondering, what makes living in Madeira so compelling?

I’m here to tell you exactly why Madeira is one of the best choices for your EU citizenship mission. 

Benefits of living in Madeira

Let’s take a look at some of the great things Madeira has to offer. 

1. Year-round sunshine

2020 became the year I opted out of winter.

Amidst a pandemic, with lockdowns in place all over Europe, I was grateful for the opportunity to escape.

Because Madeira is so far south (600 km off the Moroccan coast on the same latitude as Marrakesh), living in Madeira means warm weather and a temperate climate all year round.

Some parts of the island are cooler than others (we saw snow a few times on the tallest mountain tops), but top destinations Funchal and Ponta do Sol are usually warm.

For example, I was on one of Madeira’s beaches on New Year’s Day 2021, in water warm enough for swimming.

2. Pandemic-secure

Living in Madeira has certain advantages for avoiding the worst effects of a pandemic.

As it’s an island far out in the Atlantic, Madeira can easily control its borders. The main island only has one airport and there’s no other way of getting in.

Plus, Madeira is an autonomous region of Portugal, so it can set different rules to those on the mainland.

This was evident during the Covid winter of 2020 and early 2021. The Madeiran government implemented an evening curfew, but during the daytime life continued mostly as normal. The government also set up free Covid testing at the airport for all arrivals.

In contrast, mainland Portugal went into full lockdown. All restaurants, bars, and gyms were closed.

Madeira experienced a few worrying weeks where Covid cases spiked. But in general the situation remained under control throughout.

With such pleasant weather, it was easy to socialize in the open air where the virus was less of an issue.

If you’re worried about the effects of future pandemics, living in Madeira could be one way to mitigate this.

3. Low cost of living (although this is changing)

In 2020/21, I was pleasantly surprised at the cost of living in Madeira, especially in terms of accommodation.

But, while updating this article in September 2023, I have to report that things have changed.

Funchal is still the most expensive part of Madeira, but prices have skyrocketed since the pandemic ended.

Rent and property prices are now heading into the vicinity of Lisbon’s – but with far fewer properties available (it’s a tiny island, after all).

For example, you’d now expect to pay around €1,500 per month for a good quality T1 (one-bedroom) apartment in the center of Lisbon. 

In 2020/21 Funchal, I found a short-term rental apartment for €700 per month.

By now, I’d expect that price to have almost doubled. You might find better deals for long-term rentals (i.e. more than 12 months), but the situation has definitely changed in the last 1-2 years.

Eating out in Madeira is still affordable, especially if you stick to non-touristic places.

Many of the more touristy/international restaurants are also quite well-priced. My favorites in Funchal are Prima Caju, Threehouse Hotel, the Ritz, Art Corner, and MadCuba.

If you’re a fan of specialty coffee, you’ll find beans from a local Madeiran roastery (Greenhouse Coffee) served at Land Food & Coffee.

But you’ll have to work hard for it, as the cafe is up a very steep hill. Or you can take the cable car up the mountain. Land Food & Coffee is situated just underneath the end point of the cable car. 

Other speciality coffee places (as of 2023) include Art Corner (Old Town), Art Corner (Forum Madeira), and Three House Hotel.

In Prazeres (the far west of the island), you can find Gato Legal Coffee, another speciality coffee shop and local roastery that also does home delivery to Funchal.

4. Amazing natural beauty

Nature is always close by when living in Madeira. The interior of the island is covered in greenery, including thousands of banana plants.

It even has some unique and unusual species, like the pineapple-banana fruit, and other strange-looking plants whose names I don’t know.

Striking vistas are never far away, especially from the tops of cliffs and high-level hiking paths.

From the heart of Funchal, you can walk along the ocean front and spend time gazing out over the Atlantic and feeling the ocean breeze.

If you want a more rural, golden sand experience, the island of Porto Santo is 2.5 hours away by ferry.

Here, the population is around 6,000, including a small remote worker community. There’s a large golden sandy beach and plenty of good hiking. 

5. High levels of safety and tolerance

Madeira is extremely safe, with very low rates of all types of crime, including pickpocketing, burglary and violent crime.

I felt 100% safe walking on the streets of Funchal at all hours of the day and night (granted, I have a fairly high tolerance for this, having lived in London, New York, Mexico City, Brussels and Istanbul).

I noticed a few people living on the street, potentially drug addicts, but none of them seemed threatening whatsoever.

Madeira is also very accepting of LGBTQ travellers.  Restaurants and most service places are not discriminatory but nor are they hanging rainbow flags left and right. It’s just a relaxed acceptance.

Several of my LGBTQ friends say they feel comfortable holding hands with their partner in public. 

Portugal in general is an exceptionally safe country, but Madeira is a world apart.

6. Strong sense of community

Community is vital when you move to a new place. I was impressed with the community I found while living in Madeira.

Because of the island’s tourist focus, many locals speak excellent English.

There’s also compulsory English education from primary school level upwards.

It’s an easy place to make friends and people are open to interacting with newcomers.

Because it’s a small island, you’ll often bump into people you know, even when just having coffee at a street cafe in Funchal.

It’s a nice contrast to big city life, which tends towards the fast and impersonal.

In fact, my social life in Funchal has been far more active than it ever was in Lisbon. It soon reached the point where all the socialising was distracting me from doing my actual work! 

7. Remote worker friendly

Madeira’s strong sense of community is very much present in the remote worker/digital nomad population.

Initiatives such as Startup Madeira’s Digital Nomad Village have done a lot to promote cohesion between newcomers to the island and help people get acquainted.

I arrived in late November 2020 and was immediately added to a lively WhatsApp group and Slack channel.

Both groups are full of remote workers from all over the world, based in Madeira.

Many had originally planned short visits, but ended up living in Madeira for the long term, just like me. Madeira has that effect.

I instantly felt part of the community and have made a number of lasting friendships.

The Digital Nomad Village has helped put Madeira on the map. It generated a lot of PR and buzz around the island.

We can expect to see that trend continuing in 2023, as people seek out new destinations to establish their lives.

In 2023, Madeira is seeing its fair share of transitory digital nomads, as well as digital émigrés who are there for the long haul.

Here’s the final icing on the remote worker cake – Madeira has the fastest Internet in Portugal. 

8. Affordable property prices (not so much the case anymore!)

For the property investor, living in Madeira offers several compelling advantages (although at the time of updating this post in September 2023, prices have gone up significantly).

You can still find (relatively) affordable property around the island, although you’ll have to look harder than in 2021/22. Funchal is by far the most expensive destination, but with the biggest rental and resale potential.

Lots of new apartment complexes are in the process of construction.

In outlying areas of Funchal, such as Praia Formosa, you can find beachside apartments with amazing ocean views (update: I now live in one).

Camara de Lobos is an easy 15 min drive from Funchal, so it makes a good up and coming destination where you may still find the odd bargain!

Residential areas of Funchal such as Santa Luzia or Madalena can still be good value, while still keeping you within easy walking distance of central Funchal. Watch out for the hills though, they’re a killer!

But on Madeira, nothing is very far away (unless it’s up a steep hill). Surrounding towns like Santa Cruz, Caniço or Machico offer good value within around a 20 minute drive from Funchal.

The village of Ponta do Sol (home of the famous Digital Nomad Village) is only 30 minutes drive from Funchal.

Ponta do Sol is the sunniest place on the island. It also has excellent potential for buying and renovating properties. The north side of the island yet has even more affordable properties.

What’s more, upcoming changes to Portugal’s Golden Visa program are likely to favor Madeira. As of January 1, 2022, Portugal has removed Lisbon and Porto (and much of the Algarve) from the Golden Visa list.

That means potential investors have to look elsewhere for properties. They’ll be restricted to central Portugal, the Azores and Madeira.

While central Portugal definitely has some stunning towns, the weather is likely to be colder.

In some locations the international community may be limited (although that makes a great environment for learning Portuguese).

As for the Azores, they’re less developed than Madeira and further out (over two hours by air from Lisbon).

That leaves Madeira as the most compelling choice for Golden Visa property investment.

When Golden Visa investors descend on a region, they tend to push up property prices. This creates a strong incentive for ordinary investors to buy in Madeira during 2022.

But don’t forget to check out this article on the pitfalls of buying property in Madeira (and how to avoid them).

If you’re interested in getting residency in Madeira, it’s also worth considering the Golden Visa investment funds route.

It’s a much faster route to residency than the property route, with lower taxes and less hassle overall.

Once you have your residency permit, you can then live freely anywhere in Portugal, with no restrictions.

9. Residents’ discounts on air travel

At present, the only way to travel between Madeira and mainland Europe is by air.

For starters, that means it’s not the best destination if you’re afraid of flying. Funchal’s airport was once considered one of the world’s most dangerous.

It’s less scary these days, thanks to an extended runway, but strong winds can still cause hairy landings from time to time.

Anyway, let’s talk about those residents’ discounts. The government of Madeira subsidizes return tickets between Madeira and the mainland for residents of the island.

The objective is to ensure island residents aren’t cut off from the rest of Portugal due to high transport costs. The Azores also has a similar scheme.

In Madeira, a return ticket is capped at €86 (with a maximum spend of €400). The government will refund you the difference, as long as it’s not more than €400 for the ticket.

The refund process is a little cumbersome. You have to go in person to a CTT office in Madeira with your passport, and proof of travel.

Three airlines currently fly daily routes between Madeira and mainland Portugal: TAP Air Portugal, EasyJet and, most recently, Ryanair.

There’s no shortage of flights to choose from every day. With these affordable prices, you can go to the mainland as often as you want.

10. Special tax advantages

For those who wish to incorporate a company in Portugal, Madeira offers some interesting advantages over the mainland.

The Madeira International Business Centre is an initiative created in the late 80s, to rejuvenate the island’s economy by attracting foreign investment.

Companies incorporated in Madeira can benefit from a special 5% corporation tax rate, if they have overseas clients and make an investment in Madeira of €75,000 within the first two years.

Even without the investment, Madeira’s standard corporation tax is only 14.1%.

The company also needs to have a director living in Madeira (but they don’t need to be a Portuguese national). The €75,000 investment can include a property for the director to live in.

Please note, this is not tax advice. You should always speak to a qualified financial advisor before making any decisions involving tax.

11. Less bureaucracy than the mainland

New arrivals in Portugal often complain about difficulties with bureaucracy. I’ve had my share of struggles with this.

For example, in November in Lisbon, I sent my UK driving licence in for exchange. February arrived and still no word. I called the IMT (Portugal’s driving agency) office in Lisbon.

They informed me that the system ‘had changed’, so I needed to resubmit everything. Finally, I decided to try doing the exchange in person at Madeira’s version of the IMT. Everything was done within 20 minutes, photos and biometrics included. 

All bureaucracy can be unpredictable and I’m not saying that Madeira has a perfect system compared to the mainland.

But, in my experience, things tend to be easier in smaller places with fewer foreigners. This theory could also extend to citizenship applications. 

FAQs: Living in Madeira

Is living in Madeira a good idea?

In short: yes! Living in Madeira is an excellent idea.

Objectively speaking, Portugal the best country in the EU for getting dual citizenship.

And living in Madeira is simply the icing on the cake.

Who wouldn’t want to work towards EU citizenship on a paradise island with incredible beaches and natural beauty?

If you’re keen on moving to Madeira, here’s a comprehensive explanation of the various ways to get Portugal residency.

Madeira offers all the great benefits of Portugal for those who want to eventually become citizens, plus all the things I’ve talked about in this article.

If this has got you interested in the idea of living in Madeira, I recommend that you plan a visit as soon as possible.

You can also check out my new list of things to do in Madeira, to experience plenty of the island during your trip.