Portugal has recently become a popular destination for thousands of people, particularly Americans, seeking to live in Europe, somewhere with sun and sand and low taxes. Telecommuting enabled this to become a reality. However, until now, there was no easy way for these temporary residents to work remotely in Portugal, as expatriates had to apply for a D7 visa, which was primarily aimed at retirees.
The Portuguese government has now launched a new visa for digital nomads to stay in the country for up to a year.
The new visa
As of October 30th 2022, those who work remotely can apply for a temporary stay permit or visa for up to one year that can be renewed for up to five years. The requirements are not many but varied: from presenting proof of tax residence, the employment contract or, if you are self-employed, another form of employment contract. And what is more important: the average monthly income during the last three months must be equivalent to at least four times the national minimum wage in Portugal, which is currently €705 per month.
So, 2820€/month.
Until now, getting the D7 permit was one way to acquire the visa to stay in Portugal, which requires applicants to earn just €7,200 a year or just 600€/month. But unlike the new digital nomad visa, the income must be the result of passive investment streams, such as real estate or shares in a company, rather than a monthly salary. The new visa also allows people to move freely throughout the Schengen Area.
Why? For years, Portugal has become a popular destination for remote workers for quite obvious reasons: low cost of living (although lately not so low!), sunny weather most of the year and mild temperatures, abundance of coworking spaces, air connection to most European countries and a good level of English.
In order to seize this opportunity, the local government launched different regulations to facilitate the legal arrival of foreigners from any country and condition to work, from people looking for a job in Portugal to professionals who work remotely abroad.
Digital nomadism is a trend that has been gaining strength since the beginning of the pandemic. In Europe, several countries have similar laws and visas, or law projects, such as Estonia, Croatia or Spain (still a project by the end of 2022). Digital nomads tend to choose a place of physical residence where bureaucracy is minimal and tax benefits are the best.
In Estonia, for example, the digital nomad must pay for his own health insurance but does not contribute or pay taxes (Spanish IRPF). Applicants must earn at least € 3,500 per month. In Croatia, €2,300 per month. In other countries like Iceland things change: €7,100 per month. Greece introduced a digital nomad law in 2021, offering residence for one to three years with a monthly rent of €3,500. Some countries require you to have cash in the bank (€5,500 in the case of the Czech Republic), in addition to income.
In Spain, the Government is also developing a new visa for digital nomads that will allow people to work remotely for foreign companies (and collect 80% of their income from them) and settle without the need for a regular work visa. As it has not yet been approved, details remain to be defined, but it is expected to be valid for one year and renewable up to five in some cases.
