Portugal has established itself as a destination of choice for digital nomads, offering an advantageous tax framework and a high quality of life. Since the inclusion of the Digital Nomad Visa in the Foreigners’ Law in 2022, the country has followed the global trend of welcoming remote professionals, facilitating their installation and permanence in the national territory. Although this trend was already noticeable a little before the inclusion of this visa, we present the main advantages and requirements associated with the tax regime for digital nomads in Portugal, with particular emphasis on economic planning, which is crucial for the success of any digital nomad wishing to establish themselves in Portugal.
What is the Digital Nomad Visa?
The Digital Nomad Visa allows remote workers from outside the European Union to work in Portugal, without the need for a local employment contract. With this visa, the professional can establish residence in the country and move freely within the Schengen area, making it an attractive option for those who value mobility. Granting the digital nomad visa implies, however, compliance with certain requirements that guarantee the economic viability of the professional during their stay.
Visa Requirements
The main requirements for obtaining the Digital Nomad Visa are as follows:
- 1. Proof of Income: The candidate must demonstrate average monthly income in the last three months equivalent to at least four Portuguese minimum wages. In 2024, this amount amounts to 3,280 euros per month, which aims to ensure that the digital nomad has adequate means of subsistence.
- 2. Proof of Means of Subsistence: In addition to the monthly income, it is necessary to prove that the individual has sufficient resources to cover his/her expenses in Portugal, through bank accounts or other assets.
- 3. Employment or Service Provision Contracts : In the case of employees, the presentation of an employment contract is required. For self-employed professionals, the submission of service provision or partnership contracts is essential to prove economic activity.
Tax Regime for digital nomads in Portugal
Advantages of the Digital Nomad Visa
The visa provides significant advantages for professionals who wish to enjoy the Portuguese lifestyle:
- Residence and Mobility: The residence permit allows you to move freely throughout the European Union, which is an added value for professionals who wish to expand their horizons within the European market.
- Quality of Life and Competitive Cost of Living : Portugal offers one of the best climates in Europe and a relatively affordable cost of living, especially when compared to other Western European countries. High-speed internet access and a vast network of coworking spaces ensure ideal conditions for remote working.
- Infrastructure and Security: Portugal has a modern infrastructure, high security and a welcoming environment, factors that contribute to the quality of life of digital nomads and their families.
Tax Residency and Tax Planning
A key issue for digital nomads in Portugal is tax residency, as this is what determines where income should be taxed. Tax residency in Portugal is granted to any individual who spends more than 183 days per year in the country, which implies the need to declare income, regardless of whether it is obtained in Portuguese territory or abroad.
The Importance of Tax Residency
Tax residency does not depend on the possession of a fixed residence, but rather on habitual residence in the country. If the digital nomad has not submitted the Declaration of Permanent Departure in his/her country of origin and remains in Portugal for more than 183 days, he/she may be considered a tax resident in both countries, resulting in dual tax residency. This situation entails the obligation to declare income in both countries, which may give rise to cases of double taxation, which makes tax planning essential.
Non-Habitual Resident Regime (NHR)
The Non-Habitual Resident Regime (RNH) has been, until its announced abolition, one of the main reasons why many qualified professionals have chosen Portugal. This regime allowed the taxation of income obtained in Portugal at a flat rate of 20% for professions considered to have high added value, such as engineers, doctors or architects. In addition, income obtained abroad could be exempt from taxation in Portugal, depending on international double taxation agreements. However, it is important to highlight that this regime is about to be abolished, requiring extra attention from those who can still benefit from it.
Tax Planning and Compliance
The issue of double taxation, combined with the exchange of information between tax authorities in different countries, requires digital nomads to adopt a clear strategy that complies with the laws of both countries where they may be considered tax residents. Failure to comply with tax obligations, particularly with regard to the universal income declaration, can result in severe penalties, including heavy fines and, in extreme cases, the loss of residence permits. Therefore, specialist tax advice is crucial to avoid mistakes and maximize the advantages offered by the Portuguese regime.
The Digital Nomad Visa in Portugal represents an excellent opportunity for remote professionals who wish to combine work with a high quality of life, while benefiting from an attractive tax regime. However, the key to success lies in proper tax planning, which allows you to avoid double taxation and ensure compliance with legal obligations both in Portugal and in your country of origin. For those seeking a balance between work, freedom and security, Portugal presents itself as the ideal destination, both personally and professionally.
