The country sits just behind neighbouring Spain, which is ranked 19th, while Portugal comes ahead of Italy, in 25th place, and the United States, which is 27th.
Sweden leads the quality-of-life ranking, followed by Denmark and Canada. Switzerland, Finland, Norway, the Netherlands, Australia, Germany and Belgium complete the top ten.
European countries feature strongly in the ranking, accounting for 20 of the top 30 positions.
The 2026 Best Countries Index was produced by the Wharton School at the University of Pennsylvania in partnership with WPP and its brand analytics platform BAV.
The study looked at 85 countries, which together represent 93% of global GDP and 78% of the world’s population.
The ranking is based on responses from 15,131 people across 33 countries, who were asked for their views on 85 countries. The survey looked at 73 different factors, grouped into ten main categories.
For quality of life, the ranking considers perceptions of factors such as safety, healthcare, education, economic opportunities, public services, and environmental quality.
This means the results are based on how people around the world perceive living conditions in each country, rather than being based solely on economic figures or other official statistics.
Portugal’s 21st place puts it ahead of several major economies in this category, including Italy and the United States.
At the bottom of the quality-of-life ranking is Ukraine, while Iran and Lebanon are also among the lowest-ranked countries.
The United States, in 27th place, ranks behind the other G7 countries for quality of life.
Portugal also appears in several other categories in the 2026 Best Countries Index. Overall, the country is ranked 26th in the world, while it takes 20th place for cultural influence and 42nd in the “Movers” category.
The wider index also looks at areas including entrepreneurship, heritage, power, adventure and openness for business.