Moving to Portugal with a UK-based Company

Hi Rick, Welcome.

Portugal offers a visa specifically designed for remote workers and freelancers. This visa requires proof of stable income from a foreign source.

Digital nomad visa (D8 visa)

https://www.expat.com/forum/viewtopic.php?id=1006006

As you mentioned above, if you have passive income, you can choose D7 visa.

Some help about visa application:

Experience sharing about Visas to Portugal (D7 & others)

https://www.expat.com/forum/viewtopic.php?id=971460

Residence Rights in Portugal for UK citizens after BREXIT

https://www.expat.com/forum/viewtopic.php?id=908742

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Portugal has attractive tax options for newcomers, potentially offering a flat tax rate of 20% for the first ten years under the Non-Habitual Resident (NHR) program. Nowadays this is only for high value added activities (check it in the following link). Otherwise, you will be taxed as any other employee in Portugal.

The Portuguese Non-Habitual Residents Tax Regime (NHR)

https://www.expat.com/forum/viewtopic.php?id=911492

Regarding to your tax obligations:

If you live in Portugal for 6 months + 1 day, you become a tax resident in PT. So, if you are a remote worker, and a tax resident in Portugal, you have to declare all your income to the Portuguese tax authority (AT), whether it was earned in PT or the UK. This includes not only labour income, but also pensions, capital gains, property and capital income, among others.

In order to avoid double taxation, Portugal has a network of agreements with other countries, including the UK, which mean that a person is not taxed twice for the same tax.

Social security

The criterion is where the worker is physically based, and that's where he has to make Social Security deductions. So if you are a remote worker in PT, you will make SS deductions in PT.

Withholding tax on labour

If you work in Portugal for a company in the UK, for example, the withholding tax is the same as if you were working for a Portuguese company. In other words, it's your company that has to withhold tax and pay it to the AT.

Here are some more details:

https://www.sco.pt/pt/blog/item/118-obr … pagar.html

Regards

Thanks Johnny,

That's all super helpful.

I think realistically I will need tax advice and will probably pay someone to help me with the visa process. I am still struggling with the aspect that my company don't know what the move would mean for them. Can you recommend anyone or any companies that would be able to give them advice on what employing remote worker in Portugal would mean for them if they are a UK company with no legal entity in Portugal? They have asked me to put them in touch with someone that may be able to help.

Rick

This same problem has arisen with someone I know, a french citizen who currently works in France for a french company, he works remotely from his home in France while being an employee.

He wanted to move to Germany and continue working remotely for his company in France, but his employer did not agree because of all the legal implications for the employer.

If he stayed in Germany beyond a certain period, his employment contract would have to comply with German laws and he would be considered a resident and have to pay all taxes in Germany.

In the end he had 2 choices:

1) Stay in Germany only for short periods of time, under the total that would make him a resident taxpayer there, and keep his main residence in France.

2) End his current contract with the french company, move to Germany, register in Germany as self-employed and make a new contract with his french company as self-employed.

In Portugal you have a 3rd option: get a D8 visa (digital nomad visa) for 1 or 2 years, and keep the job with your employer if they agree.  But the D8 visa is time-limited and cannot be renewed and the time lived in Portugal with a D8 visa does not count for the 5 year permanent residency.

This link shows all the docs needed to apply for a Digital Nomad visa, including docs for either subordinate work as an employee or independent professional activity as self-employed: https://www.vfsglobal.com/one-pager/por … ads_er.pdf

@Mariza.says

Thanks Marisa, all very helpful.

Are you sure the D8 visa will help in my situation? Either way I would need a visa and you’re right, the d8 is the easiest. But as far as I know, it makes no difference to my employer which visa I am on. I believe that in order for me to remain in Portugal on a d8 visa, I will need to stay in the country for something like 2/3 of the year. I have read that if I am spending that much time in Portugal then I think there would be legal/tax implications for my employer. But not 100% sure, it’s a bit confusing!

rick

@rickbull673

I don't know if the D8 visa will help you, but it is a temporary visa intended for digital nomads working remotely for a limited period of time only, so under these temporary circunstances your company is not required to do anything different (appart from confirming that they allow you to work remotely with current employment contract), they don't have to register or pay NI in Portugal.

I believe that with a D8 visa you do not have to pay any taxes in Portugal either, but better check this.

BUT... D8 visas are not renewable, so you'd find yourself in the same position when it expires, but meanwhile... you'd have had time to think about the future, or you may have found a different way to work there.

See link above for all the docs required for the D8 / Digital Nomad.

@Mariza.says

Your post contains misinformation. The D8 visa can be temporary (up to 1 year) or residential (two years, with the possibility of renewal for +3 years). It has tax implications for those who apply for it, since if you stay in Portugal for 6 months +1 day, you become a tax resident. As for the tax implications for companies, these must be analysed under the bilateral agreements to avoid double taxation.

https://www.expat.com/forum/viewtopic.php?id=1006006