The notion of moving to a foreign country, working there remotely, enjoying the beach, and meeting new people is heavily romanticized and as everyone that has done it knows, it doesn’t paint the whole picture. While Portugal is a romantic and special place, it still exists in the cold, hard world and you need to worry about things like taxes, laws, and bureaucracy if you plan on living there. After the financial crisis Portugal introduced the NHR program, which makes it easier and cheaper for people to move to the country. So, in order to get you ready for reality here are some practical tips regarding the laws in Portugal for digital nomads:
Taxes on foreign income, crypto and dividends in Portugal
Many remote workers make their money from a different country than the one they are residing in. While the COVID pandemic has made remote work the norm for millions of people, receiving money from one country while living in another is a complicated matter and many states do not have a quick and easy solution to it. Luckily, foreign-sourced income is exempt from any taxation in Portugal, under the NHR program, and you do not have to worry about taxes too much. This means that if you have a regular job, in Amsterdam for example, but work remotely in Portugal you do not need to worry about Portuguese income taxes. This opens up a lot of possibilities for people working in high cost of living areas of Europe to arbitrage their high salary in a much cheaper Southern European country and save more money while living better.
What is more, this extends to other forms of income, such as crypto earnings, dividends from stocks, or real estate income. If you have an apartment that you are renting out in Berlin, the Portuguese government is fine with not taking a portion of that from you. As you can imagine, this can be a very lucrative situation, depending on your source of funds. However, if you decide to work for yourself or as a freelancer, a flat 20% tax will be applied to your income. While this is much lower than the tax burden in other places in Europe, countries like Bulgaria have an even lower income tax of just 10% flat. Like with most tax questions, you will need to sit down with a pen and paper, look at where your money is coming from and figure out what works best for you, but I think that Portugal sounds about as good as it can get in that regard. It may not be the country with the lowest taxes, but the system is simplified and you will have to deal with less paperwork and headaches.
Immigration to Portugal
Before you even start worrying about taxes, you need to consider how and if, you can legally reside in Portugal. If you are a citizen of the European Union, the answer is very simple. You can just go there, and as long as you can support yourself without any welfare from the Portuguese government, you are free to stay. However, the situation is slightly more complicated for other digital nomads, but only slightly. Citizenship from most countries will allow you to go to Portugal for 3 months without a visa, but anything longer than that will require one. The good news is that a visa is easy to get, especially for Americans, as the country is more than happy to accommodate wealthier ex-pats, that’s the whole point of the NHR program and all of the tax benefits. I won’t go into too much detail, as those things change and every country has its own embassy website and requirements, but getting to stay in Portugal for a few years should not be a problem for most of you. In many cases, you can go there for a couple of months first, decide if you like it, and then start worrying about visas.
If you enjoy your stay and want to make things permanent, you can also look at getting a Portuguese passport. The requirements are easier than in many other EU countries and citizenship in Portugal will make your travels around Europe much more convenient, but it will take a while to achieve. You will need to live in the country for 5 years, after which you can get a permanent residence in Portugal, after that you will need another year to get the passport. Going through the process of acquiring citizenship is long and cumbersome, but well worth the benefits, especially if you fall in love with Europe, as many do.
My general tips for moving to Portugal
Now that we got some of the dryer procedural benefits of moving to Portugal as a digital nomad, I can share some of my personal thoughts and experiences of the country. It is affordable, compared to Northern Europe, but still a bit more expensive than Eastern Europe and Asia. Rent prices are going through the roof in the last few years, partially driven by the many digital nomads, especially in the larger cities, so the notion of Portugal as a cheap destination might be gone in a few years. However, life, drinks, and everything else is very reasonably priced and you will be able to go out and eat in restaurants regularly, even on a budget. You should be able to find a beer for 2-3 euros, even in Lisbon, unless you go to one of the hipster craft beer places and food can be affordable too.
On top of the affordability, Portugal has a large and ever-growing digital nomad community, which is only bound to get bigger with the rise in remote work opportunities. There are many co-working spaces and laptop-friendly cafes in Porto and Lisbon, so you should be able to find a decent place to work from, as well as some friends and things to do. The truth is that Lisbon is one of the most popular, if not THE most popular digital nomad bases in Europe, which makes it a great place to start your journey from. On top of that, the country is well connected with the rest of the continent, with many cheap flights available. All in all, Portugal offers great benefits for ex-pats, so it should definitely be on your list!