Work remotely and live in Portugal!
Portugal’s visas for digital nomads
Remote work has been popular since the pandemic started. Some countries, such as Portugal, determined remote work as a way to control disease contamination during the pandemic. Many companies had to adapt and create remote governance rules and regulations to make sure their businesses kept running. Currently, although many companies could have gone back to their former work model, remote or hybrid work persists. This is increasing the interest in global mobility!
New law and new visas in Portugal
Recently in Portugal, a new law came into force introducing two types of remote work visas that could be a good fit for digital nomads from countries such as the US, Israel, South Africa, and Brazil.
One of the visas is a temporary stay visa, and the other is for residency establishment. Both visas require the Applicant to prove that they (1) work under an employment agreement or as an independent worker for an entity established and registered outside Portugal; (2) have earned an average of 3.040,00 EUR per month for the last three months before submission of the visa application; and (3) have tax residence outside Portugal.
Framing under one or the other visa essentially depends on the period that the Applicant would like to stay in Portugal.
Temporary Visa
If the period of stay is less than one year, a temporary visa for digital nomads may be the most suitable option. This option does not necessarily mean that the Applicant would have tax obligations as a tax resident in Portugal.
Residency Visa
If the Applicant wishes to establish residency in Portugal for more than one year, the most suitable option would most likely be a residency visa for digital nomads. As one of the types of visas falling under the “residency visa” category, after five years of legal residency in Portugal, the holder of the residency permission is entitled to apply for Portuguese nationality.
Residency visas for digital nomads might bring consequences such as having tax residency in Portugal. Pursuant to Portuguese law, tax residents in Portugal must annually declare all their income. This means income from a Portuguese or foreign source would be subject to annual taxation in Portugal.
Nonetheless, Portugal created the Non-Habitual Residents (NHR) scheme to decrease new tax residents' annual tax liability in Portugal. This means that under the NHR scheme, income from foreign sources may be tax-exempt. A good understanding of the NHR and Portugal’s tax benefits on personal income is essential for you to use them well!
