Working Remotely in Portugal for a Foreign Employer

The digital revolution has forever changed the nature of work and an increasing number of people now have the opportunity to work remotely. Remote working is more flexible in nature thereby offering a better work life balance and can result in more job satisfaction and less stress. With modern digital tools at their disposal, employees can handle assignments, monitor their development, and collaborate with their colleagues without being confined to the usual work hours or work place. With the revolution in remote work, many countries are now welcoming remote workers by offering special incentives such as digital nomads visa, tax cuts or other flexible residency options and Portugal is one of them.

Making your life in a country like Portugal is attractive thanks to the modern digital infrastructure, mild weather, low costs of living and welcoming environment for remote workers. It is in many ways the ideal destination for remote workers  looking for both productivity and enjoyment.

If you are planning to work remotely from Portugal for foreign employer, this article will provide you with information to help you get started.

Things to know as a Remote Worker in Portugal 

Before starting a career as a remote worker in Portugal, below are some key points to be aware of in order to ensure a smooth and enjoyable experience

The Legal Landscape

It is very important that you follow all rules and regulations when working remotely in Portugal. Navigating the legal landscape can be complicated, especially if you come from another country, but it is possible and can be made easier with the right assistance. Informing yourself on your legal obligations in order to live up to the requirements is necessary in order to start your journey as a remote worker in Portugal in the best possible way.

Visa and Residency Options

As an EU citizen you also will have no issues securing the right to work remotely and live in Portugal, as the EU has an agreement of free movement for EU citizens living within the union. All you need to do is to visit the local council to register your address if you wish to stay for longer than three months. 

For Non-EU citizens who are interested to work remotely and stay long term in Portugal, there is a D7 Visa option. This is a popular option for remote workers and digital nomads where they have to provide proof of passive or remote earnings.

Then there is the Golden Visa option for the high earners with vast financial resources available. They are required to invest in property or other assets and get residency and eventually citizenship.

Tax Obligations

Depending on your residency status, you will be required to pay taxes in Portugal even if your income comes from abroad. The tax rate in the country depends on a number of factors such as;

• Your income level. Taxes rate from 13.25% to 48% depending on how much you earn.
• If you are in a civil partnership or married, you will be taxed differently and can include part of your partner’s income on your filing.
• Your age. There are also tax deductions depending on your age which are useful to be aware of.
• Portugal has a Non-Habitual Residency (NHR) program in place that is beneficial for new residents but remote workers can also take advantage of this if they fulfill the requirements. Under this scheme your tax rate will be reduced for upto 10 years.

Cost of Living

In general, the cost of living in Portugal is lower. Lisbon and Porto can be a bit on the expensive side but overall the cost of living in Portugal is low compared to other Western European countries. Housing, food, and transportation are all reasonably priced, especially in smaller towns or rural areas. 

How an Employer of Records ( EOR ) Can Help

An EOR can be a valuable option for ensuring stability in your journey as a remote worker in Portugal, and this can be particularly useful when you are working for a foreign employer who has no physical presence in Portugal.

 An EoR can be of assistance in a couple of ways;

• Help with onboarding and contract management
  The EOR will manage the on-boarding and contract management tasks and will officially become your employer in Portugal.
• Payroll , Taxes and Benefits Management
  The EOR will take care of all the applicable taxes, social security, and any other contributions and will ensure that they are deducted according to Portuguese regulations. You will also get access to all benefits that you are entitled to such as paid vacations ,  health insurances , bonuses etc.
• Ongoing HR support
  You can always contact the EOR regarding any HR related advice such as clarification on benefits, contracts, or workplace policy.

The Bottom Line

Remote work in Portugal is a perfect blend of high quality of life , mild climate and relatively low cost of living. You will find a high-quality digital infrastructure, a growing community of remote workers and a vibrant atmosphere.

Partnering with an EOR like Swapp Agency will make the process even smoother, as you will have the peace of mind that all legal and administrative aspects are taken care of, allowing you to focus on the professional aspects of the job.