A sunny country with low cost of living, beautiful sunsets and Atlantic views. Portugal is probably the leader among European countries in terms of the number of digital professionals and freelancers. Lisbon, the capital of Portugal, was chosen by CEOworld Magazine as one of the top 5 best cities for freelancers in 2020 and was rated the 15th in the NomadList as the most popular city for remote work. It hosts one of the world’s largest startup events, Web Summit, which is attended by more than 80,000 people.
Digital nomads are attracted by the 300 days of sunshine a year, mild climate, fresh seafood, the ocean. And, importantly, Portugal has very low requirements for granting residence permits.
If you are not planning to stay in Portugal for a long period, you can use just a tourist visa. Unlike other Schengen countries Portugal allows you to extend your stay on a tourist visa for up to 9 months without leaving the country. This is a completely legal procedure. This option allows you to live in the country before moving and assess all the pros and cons.
How to extend your tourist visa while in Portugal
Due to the loyal visa extension system many expats legally reside in Portugal for long periods of time without obtaining a residence permit.
You can sign up for an extension either by phone or on the SEF website by entering your visa number. The website is convenient because you can select different offices for renewal and see which options are available.
One renewal costs just under 100 €. The maximum extension is for three months in advance. You can do it three times in a row and thus spend up to nine months in the country.
Documents required for extension of a tourist visa in Portugal
- Plane ticket reservation (to prove that you are going to leave the country after all);
- Proof of funds with a minimum of €40 ($48) per day per person – e.g. bank statement or cash;
- Proof of accommodation for the next 3 months – a hotel reservation or rental agreement;
- 2 color Portugal visa photos.
Portugal Residence permit for passive income earners
If in addition to working remotely you have some passive income, you can get a residence permit in Portugal on that basis alone. This program is aimed at foreigners who can live in Portugal without having to work for hire.
Initially the program was created for retirees from different countries, whose pension allows them to live comfortably in Portugal. Subsequently its features were adapted to all financially well-off foreigners.
Sources of passive income eligible for a residence permit in Portugal
In order to obtain a residence permit under the program of financial independence in Portugal it is sufficient to provide proof of receiving a monthly income of 700 euros ($845) per applicant. For each relative moving with the applicant you will need to add from half (for adults) to a third of this amount (for children). The best option is when the foreigner has sources of income such as:
- income from renting out real estate;
- income from shares and dividends;
- retirement benefits.
Other requirements:
- Availability of permanent housing. You can buy or rent an apartment or house with an agreement for at least one year;
- The absence of a criminal record.
The process of obtaining a residence permit in Portugal
The first step is to obtain a national or resident visa type D. Depending on the basis for obtaining a residence permit the national visa can be in the category from D1 to D7.
Depending on the category of national visa, a package of documents should be submitted to the Consular Service at the place of residence of the applicant.
The basic package of documents includes:
- Passport, valid for at least 1.5 years, with at least two blank pages;
- 2 Portuguese visa photos;
- Medical Insurance;
- Certificate of no criminal record in the territory of the home country;
- Proof of funds.
All documents must be translated into Portuguese or English and notarized. The national visa processing time is 60 days.
After obtaining a national visa the applicant should enter Portugal and apply for a residence permit at the Portuguese Immigration Service (SEF).
You can also apply directly to the migration service of Portugal while in the country on a tourist Schengen visa. However, in this case you must justify the reason for entering the country on a tourist visa for the purpose of permanent residence. In addition, the process of reviewing documents in this case can be significantly delayed, and you risk violating the terms of stay in the country. We do not recommend using this method of immigration.
Initially the residence permit for financially independent persons is issued for a period of 1 year, with subsequent extension in the territory of Portugal. After 5 years of residence in the status of residence permit, the foreigner can apply for a permanent residence permit in Portugal, and after another year to apply for citizenship.
Rights and obligations of residence permit holders in Portugal
- Residence Permit for Passive Income earners requires you to stay in the country for at least 183 days per year.
- When you move to Portugal, you become a tax resident. For new residents, there is a preferential non-habitual resident (NHR) tax regime for the first 10 years. Most income received from abroad is tax-free, while income received within Portugal is taxed at a reduced rate. The zero rates used to apply to foreign pensions, but from 2020 they are taxed at 10%.
- With health insurance, you have access to all types of medical care in the national health care system.
- Children can attend school and have access to further levels of education.
- You can work for yourself without restrictions: open an LLC or IE, receive passive income. The first residence permit can be issued with the wording “without the right to work”, but when extending the status the ban on employment does not apply, as a rule.
- After 5 years of permanent residence, you can apply for permanent residency and citizenship. In this case, it is required to pass a language test.
