Background
The new visa for digital nomads became available on October 30th 2022, allowing any remote worker or self-employed individual to pursue their profession through Portugal, enjoying all of the quality of life that Portugal has to offer.
Overview
With the last amendment of the relevant law, the Portuguese Government implemented the digital nomad visa, specifically allowing foreign professionals to provide their services remotely, either as a subordinate worker or as an independent worker from Portugal, and to apply for residency in Portugal.
Step 1: Hire a Legal Adviser
As the digital nomad visa is very recent, it requires an expert, such as Dixcart, with sufficient experience and knowledge of Portuguese immigration law, to take you smoothly through the process. Things to consider when hiring a legal adviser are experience in the market, specifically in this area, and the track history of the firm.
Once a legal adviser is appointed, they will assist you with the documents that you need to collect to apply for the visa and schedule the relevant appointment at the Portuguese Consulate, for the area where you reside, helping you through every step of the process.
Step 2: Portuguese Tax number and Opening a Portuguese Bank Account
To apply for the visa, you will need to prove that you have sufficient means of subsistence in Portugal for the period of your stay (a minimum of one year). This means that a Portuguese bank account, and consequently a Portuguese tax number, are required.
A deposit of the minimum monthly Portuguese salary of €760, multiplied by twelve (the minimum stay period) is mandatory, to present to the Portuguese Immigration Authorities.
Step 3: Collect Documentation
You will need to assemble a number of documents for the appointment at the Portuguese Consulate:
General documentation required to request a visa:
- Proof of legal residency in the country from where you are applying
- Travel insurance covering necessary medical expenses, valid for 12 months
- Criminal record
- Proof of accommodation in Portugal for, at least, 12 months
- Proof of means of subsistence in Portugal
Specific documentation for the digital nomad visa
- Working for an employer – one of the following documents:
- Work contract; or,
- Promise of work contract; or,
- Declaration by employer confirming the labour link.
- Independent professional activity – one of the following documents:
- Contract of company incorporation; or,
- Contract of service provision; or,
- Written proposal of services provision contract; or,
- Document attesting the services provided to one or more entities.
- Proof of average monthly income for the last three months with a minimum value equivalent to four times the Portuguese minimum wage: €3,040.
- A document confirming tax residence.
Step 3: Legal Formalities
Make an appointment at the Portuguese Consulate, where a meeting must take place to deliver the documentation and for biometrics for the visa to be taken.
Step 4: Final Steps
After analysis of the application is complete, the digital nomad visa is issued for a period of four months and allows two legal entries in Portugal. When in Portugal, an appointment needs to be made with the Portuguese Immigration Authorities to complete the process. Once the digital nomad visa for residency is issued, it will be valid for two years and there is an option to then renew it.
Advantages
Work remotely and legally from Portugal Mainland or either of the Islands of Madeira or the Azores, and enjoying the amazing weather and food.
In Madeira, the “Digital Nomads Madeira” has already been created, which is a village for digital nomads, where they can enjoy workspaces, places of activity and community, with updated technology.
In addition, following on from this residency visa and subsequent residency permit, you can apply for citizenship or permanent residency after five years, and you can also apply for the non-habitual tax regime that gives a number of income tax advantages.
Additional Information
If you require any additional information regarding the Digital Nomad visa, the processes involved and the advantages it offers, please contact the Dixcart office in Portugal: advice.portugal@dixcart.com
We will be delighted to help you.
Popularity of Portuguese Property
Property in Portugal has recorded double digit percentage growth in various sectors, listed by numerous real estate service companies, in recent years, and the expectation is that this will continue – with an increased demand and reduced supply than previously seen.
It is an interesting misconception that property prices are driven predominantly by the Golden Visa program – in actual fact, the Portuguese Golden Visa accounts for an insignificant portion of property purchases, when considered in comparison to total property purchases in Portugal.
What are the Factors Affecting Property Prices in Portugal?
Various factors in Portugal are influencing the increase in property prices, including:
- Portugal is the new acclaimed California, the new European Silicon Valley;
- Portugal is ranked one of the best places to live and work in the world;
- It is an attraction magnet for digital nomads;
- Portugal offers a 10-year tax holiday for the affluent;
- Property has offered favourable investment opportunities over recent years and that is no different now.
Taxation of Property in Portugal
The importance of understanding the related tax consequences of holding property in Portugal is vital.
Dixcart have generated an Article that provides a comprehensive guide to the various taxes that need to be considered:
Property Taxes in Portugal – The Importance of Getting it Right (dixcart-domiciles.com)
Types of Tax to Consider
Please see below the types of taxes and the other matters that you should carefully consider:
- When is Stamp Duty Applicable?
- Stamp Duty on the Purchase of a Property
- Property Transfer Tax
- Annual Municipal Property Tax (IMI)
- What Tax Consequences are Applicable Upon the Sale of a Property?
- What are the Tax Consequences for My Rental Income?
- What Inheritance Tax Implications Exist for Property (or is it Stamp Duty that Applies)?
- What is the Preferred Structure to Hold Property in Portugal?
Dixcart is generating two additional guides regarding holding property in Portugal and the relevant taxes: the first relates specifically to the taxes in connection to property purchases and sales, while the second will cover the tax obligations in relation to rental income generated through property held in Portugal.
Other Considerations
Other important matters to take into account for non-resident individuals are; the specifics of the relevant double taxation treaty between Portugal and the country that the individual is resident in, as well as the local laws and regulations applicable in the country of tax residence.
A typical example of this for a UK resident, is the fact that UK tax residents also pay tax on the gain from the Portuguese property in the UK, however, under the double taxation treaty, any tax paid in Portugal may be credited against the tax due in the UK.
Why is it Important to Engage with Dixcart?
It is not just the Portuguese tax considerations on properties, but also the impact from where you may be tax resident and/or domiciled, that need to be considered. Although property is typically taxed at source, double taxation treaties and double tax relief need to be considered, as indicated above.
A typical example is the fact that UK residents will also pay tax in the UK and this will be calculated based on UK property tax rules, which may be different to those in Portugal. They are likely to be able to offset the Portuguese tax actually paid against the UK liability to avoid double taxation, but if the UK tax is higher, further tax will be due in the UK. Dixcart will be able to assist in this regard and to help make sure you are aware of your obligations and filing requirements.
How Else Can Dixcart Assist?
Dixcart Portugal have a team of experienced professionals who can assist with various aspects regarding your property; efficient tax planning, legal support (for the sale or purchase of a property), accounting and tax support and the incorporation and maintenance of companies.
Further to this, if you would like a deemed tax calculation to be performed, or any additional information, please reach out to our offices in Portugal for this information: advice.portugal@dixcart.com
