Portugal Digital Nomad Visa

Portugal attracts freelancers and remote workers from all over the world not only by its proximity to nature, the beautiful climate, and beautiful cities but also by quite democratic prices in comparison with most European countries. For example, rents in Lisbon, on average, are 15-20% lower than in Berlin or Madrid, and the prices of products at a third lower than in Germany. 

Portugal and the digital nomad visa

Technically, the visa law for digital nomads in Portugal has already been adopted in 2022 but has not yet entered into force, and regulations have not been developed. Therefore, we will look at two types of visas that can replace them—The Temporary Stay Visa and the D7 visa (formerly known as the Retirement Visa), on which you can later obtain a residence permit.

The Temporary Stay Visa is issued for up to one year and allows multiple entries into Portugal. It is suitable for those who want to stay in the country for a long time but are not ready to apply for a residence permit. During your stay in Portugal with this visa, you can travel to other countries, as well as extend the visa for another two years. It is important to confirm that your monthly income is at least 1000 euros to obtain it. To apply for a visa, you need to fill out an application form, which can be submitted online. In addition, you need to provide the following documents:

• Completed questionnaire
• Your valid passport
• 2 photos (3×4 cm)
• Bank statement
• Contract for renting or buying a home in Portugal
• Certificate of criminal record
• Your application for a criminal record certificate from the Immigration and Border Guard Service (SEF)
• Confirmation of your health insurance
• A cover letter stating the reason for your request
• A document confirming that you are in a normal situation, which will not affect the length of your stay.

The D7 visa is more suitable for those digital nomads who want to obtain a residence permit in Portugal, work remotely, and/or have a passive income and can provide proof of legal income for the last 13 months. Previously, this visa was only available to recipients of passive income—that’s why it was called the “retirement visa.” Passive income includes:

• income from renting out real estate;
• interest accrued on securities or bank deposits;
• dividends on shares of legal entities;
• income from copyrights;
• retirement and insurance benefits.

Now the picture has changed, and D7 became the visa for “financially independent people.” That is, you can get it simply by being a remote worker.

An overview of all Digital nomad opportunities in Portugal

How do I get a D7 visa for digital nomads in Portugal

For this, you need to:

• Have a stable income outside of Portugal that you can prove. If you are moving alone, the status for 2022 requires an annual income of at least 12,000 euros (1,000 euros/month). Previously, this amount was 8460 euros (705 euros/month). If you take your spouse with you, their minimum income must be a minimum of €4,230 per year. If you have children under the age of 18, this is also increased by €2,538 for each child. Alternatively, if you work remotely for a company outside Portugal—as we have described above, provide a certificate of legal income for the last 13 months.
• Have health insurance for at least 12 months for a minimum of €30,000.
• Obtain a Portuguese Número de Identificação Fiscal (NIF), i.e., tax identification number.
• Open an account with a Portuguese bank and deposit 10,000 euros.
• Provide a certificate of no criminal record.
• Rent a house in Portugal for at least a year.
• Submit documents at the Portuguese Embassy in your country of residence and pay a consular fee of 90 euros.

To obtain this visa, you need the same set of documents as mentioned above and a completed D7 visa application form. 

D2 visa or business visa, will it work for digital nomads

An entrepreneurial visa in Portugal will suit those nomads who provide services as freelancers to Portuguese companies and companies from the USA, UK, and the western part of the EU. If you work remotely for a company from Eastern Europe, your case for a business visa is not suitable—according to the Portuguese government, your move on this visa simply does not make sense.

Important: The D2 visa requires the registration of a self-employed person in Portugal (and show an operation report of at least 2 months). If you continue to work with customers from Ukraine, you must reissue contracts with them on Portuguese documents.

Here it is essential to clarify the difference between digital nomads and freelancers. A regular digital nomad, as understood by Portugal, is a person who works remotely for one company under contract. A freelancer is a self-employed professional with several contracts to provide services to different companies or entrepreneurs. If you fall under the second definition, a D2 visa will work for you.

This visa also covers starting a company in Portugal

Briefly, here are other criteria you have to meet to get this visa:

1. You have your own company in Portugal or a share in such a company.
2. You want to open a company in Portugal and have already made a detailed business plan describing why it will be profitable in the Portuguese market.
3. You have a company in another country and want to open a branch in Portugal. You will need the most detailed financial statements for this company and a detailed argument as to why this branch should be in Portugal.

Of the documents you will need:

• D2 visa application form
• 2 photos 3×4 cm
• Original and copy of passport
• Bank statement to confirm you have money for your stay
• Proof of own or rented accommodation in Portugal
• Apostille certificate of no criminal record
• Permission to verify your criminal status in Portugal
• Health insurance 

As well as documents on the company:

1. Business Plan
2. Incorporation documents and financial statements 
3. Invoices and contracts 
4. Company registration documents
5. Company account statement
6. Proof of sufficient funds to establish a company in Portugal, if the company has not yet been founded
7. Proof of investment in the Portuguese economy, if any

Can freelancers working with Upwork apply for a D2 visa

Yes! The Upwork option is suitable for a D2 visa and even a D3 visa (for highly qualified professionals) if you have an apostilled higher education diploma and a monthly income of 1,500 euros or more. If you do not have the opportunity to have the diploma apostilled, you will have to gather additional documents confirming that you have worked in your specialty for at least 5 years (for example, contracts with customers and employers for that period, certificates of additional education or letters of recommendation from customers). 

A legitimate question arises: does the diploma have to be in the specialty in which you work? Let’s say it’s desirable but not 100% necessary. You can have a degree in marketing and work as a programmer, but at the time of submission of documents, you may be asked how it happened 🙂 But that doesn’t mean it’s impossible.

Taxation of Freelancers in Portugal

Of course, there are always people who think, “I’ll just get paid for services on an individual’s card, I won’t have to declare income, and I won’t have to pay taxes!” 

We hasten to disappoint you—not even Dr. Strange can find a reality in which such a thing would work 🙂 So let’s take a look at the tax situation for sole proprietors in Portugal: 

• Progressive income tax scale: 14.5%—48%. In the first 2 years, there are benefits to reducing the tax base and using coefficients. 
• Alternatively, it is possible to apply for non-habitual resident status to receive a 20% income tax rate for 10 years. You can apply by March 31 of each year (as long as you have not been a tax resident in Portugal for the last 5 years at the time of application).
• For the first year, there is a benefit from social taxes. Then you’ll have to pay 21.4% or from the maximum assessment base—5133 euros per month.

Example: For an income of 1,000 euros, the social tax will be 214 euros. When you pay in the electronic cabinet, it can be reduced by 25% or vice versa—increased by the same amount on account of the pension 🙂

To summarize, how does the visa D2 is different from the D7: the first is for freelancers and entrepreneurs, and the second one is for those who work remotely or receive passive income. In addition, the latter also allows you to get a residence permit in Portugal. Take this into account when deciding to relocate to Portugal! We will advise you in detail about all the nuances of obtaining a visa, registering a sole proprietorship in Portugal, and registering a company in Portugal. 

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