Portugal Digital Nomad Visa: Ultimate Guide for 2024

The digital nomad lifestyle has become increasingly popular in recent years, with more and more people working remotely abroad.

As this trend has developed, Portugal has emerged as a top destination for digital nomads because of its beautiful landscapes, vibrant culture, trendy coworking spaces, and affordable cost of living.

In October 2022, the Portuguese government launched a new Digital Nomad Visa program, designed for foreigners who live and work in Portugal as remote workers, which has made the prospect of moving to Portugal even more appealing. With this visa, anyone with a remote job that provides sufficient income can conveniently live and work in Portugal for up to one year and then apply for a residency card in order to stay longer in the country.

In this article, we'll explain the Portugal Digital Nomad Visa, its eligibility criteria, the requirements, the cost, the benefits, and the tax implications. We'll also explore all that Portugal has to offer digital nomads in terms of lifestyle, amenities, remote working necessities and much more.

What is the Portuguese Digital Nomad Visa?

Portugal offers a dedicated visa for remote workers, known as the Portugal Digital Nomad Visa. This residency visa allows digital nomads to live and work in Portugal for an extended period without needing a traditional work permit.

To be eligible for the Portugal Digital Nomad Visa, applicants must meet specific criteria, including having a valid passport, proof of sufficient income, and evidence of valid travel insurance and health insurance coverage. Remote workers who have an average monthly income that is four times the Portuguese national minimum wage (around $3,350 per month) are eligible to apply for this residence visa.

D8 Visa categories

There are two types of D8 Digital Nomad Visa: a temporary stay visa (also known as a short stay visa) and a residence permit.

Temporary stay visa:

This category is designed for people who want to work remotely in Portugal temporarily — for up to a year. As such, it is ideal for anyone who is looking for a short-term period of remote work in Portugal, though it's possible to renew this visa up to four times (each for one year). It's important to note that with the Portugal temporary stay visa category, there is no family reunification allowance, so you can't include family members in your application.

Residency permit:

Meanwhile, the residency visa has an initial validity of four months; during this period, you should enter Portugal and apply for a two-year residency permit from the immigration and borders service, formerly known as SEF (Serviço de Estrangeiros e Fronteiras) and now known as AIMA (Agência para a Integração Migrações e Asilo). After that two-year period, you will then be able to renew the residency permit for 36 months (three years), taking you up to five years in Portugal.

After that five-year period, it's then possible to apply for permanent residence and eventually submit a Portuguese citizenship application, provided that you meet the eligibility requirements stipulated by Portuguese nationality law. In order to obtain Portuguese citizenship, you'll need to provide evidence that you have a clean criminal record and demonstrate proficiency in the Portuguese language at the A2 level of the Common European Framework of Reference for Languages (CEFR).

What are the benefits of the Portugal Digital Nomad Visa?

The key benefits of Portugal's Digital Nomad Visa are that it enables its holders to live and work in Portugal, allows family reunification (applicants can apply with qualifying family members), gives them access to public services, allows them to travel visa-free across Europe's Schengen Area, and provides a pathway to Portuguese citizenship.

Who is eligible for the Portuguese Digital Nomad Visa?

Nationality:

Applicants must be citizens of non-European Union (EU) and non-European Economic Area (EEA) countries. This includes individuals holding passports from countries outside the EU and EEA, regardless of where they currently reside. This visa is particularly popular among US citizens and US Green Card holders. An important point to note for US Green Card holders applying for the Portugal temporary stay visa is that their US permanent residency must have a validity that is valid for at least three months beyond the two years they're permitted to stay in Portugal.

Remote work:

Have a proven remote work arrangement, either as a freelancer/self-employed or an employee of a foreign company.
Be able to perform your work duties fully remotely without requiring a physical presence in Portugal.
Earn at least €3,280 per month (which is four times Portugal's national minimum wage) as of February 2024 from your remote work. This can be demonstrated through bank statements for freelancers/self-employed showing the minimum monthly income for the past three months or an employment contract and recent payslips for employees showing earnings of at least €3,280 per month.

Financial requirements:

Possess sufficient financial means to support yourself during your stay in Portugal.
Private health insurance: Covering the entire duration of your stay in Portugal.
Proof of accommodation: Lease agreement, property ownership documents, or a hotel reservation for the initial stay.

Clean criminal record:

Have a clean criminal record from your home country and any other countries you resided in for more than six months in the past five years. A certified translation of your criminal record certificate into Portuguese is required.

Additional considerations:

You must be at least 18 years old.
You must intend to reside in Portugal for an extended period.

What is the Portugal Digital Nomad Visa application process?

Collect documents: The first step in the Portugal Digital Nomad Visa application process is to make sure you have all the necessary documents for your application. As well as your application form, you'll also need a valid passport, passport photos, a cover letter, proof of income, and proof that you have no criminal record. Additional documents are required for those applying with family members: a birth certificate if applying with any dependent children and a marriage certificate if applying with a spouse.

Complete application form: Once you've ensured you've got all the documents together, you can then complete the application form with your personal details and provide a cover letter explaining your reasons for applying for temporary residence in Portugal, details of your accommodation plans in Portugal, and an explanation of how you will support yourself (and any dependent family members, if applicable) in Portugal.

Submit documents and biometric data: Then it's time to submit your documents and your application form. To do so, you can visit the Portuguese Consulate, local Portuguese Embassy, or a VFS Global office in your home country. There's no option to apply for the Portuguese Digital Nomad Visa online, as SEF (the Portuguese borders and immigration service) will need to take your fingerprints and your photo. You will also need to pay the Portugal Digital Nomad Visa fee during this visit. The application fee is around €90 per applicant and €40 for each accompanying child aged between six and twelve; children under six years old are exempt from the application fee.

Receive visa: Typically, once you've submitted your visa application, it will then be processed within 90 days. If your application is approved, you'll receive a confirmation email, and then you'll be able to collect the visa from the Portuguese Consulate or office at which you applied for it. Alternatively, you can request that your visa be delivered to you via secure post.

Once granted, this visa allows digital nomads to stay in Portugal for an initial period of one year, with the possibility of extending it for additional two-year periods.

What documents are required for the Portugal Digital Nomad Visa?

Valid passport
Visa application form
Two passport photos
Proof of accommodation
Private health insurance
Criminal record certificate
Proof of regular income
Latest tax return
Latest three bank statements
Work contract or letter of employment
Proof of health insurance

How much does the Portugal Digital Nomad Visa cost?

The cost of applying for a Digital Nomad Visa for Portugal is about €90, which can vary depending on your jurisdiction. Once you arrive in Portugal you will then have to pay an additional €320 to secure your residency permit. Bear in mind that there may be additional costs to applying, such as translating documents for your application. Other costs include your medical insurance payments as well as your accommodation in Portugal.

Can a Portugal Digital Nomad Visa lead to citizenship?

After five years of living in Portugal, Digital Nomad Visa holders can apply for permanent residency and even Portuguese citizenship by naturalization, provided that they fulfill all of the requirements. With citizenship, you will have the right to live, work, and study in any European Union (EU) member country.

Alternative Portugal Digital Nomad Visas

As well as the D8 Digital Nomad Visa, there are several other types of visas available to digital nomads interested in living and working in Portugal as an expat. The three main options are:

The Short-Term Work Visa is the ideal choice for digital nomads intending to work from Portugal on a temporary basis.
The D7 Passive Income Visa is best suited to those planning to stay for up to two years.
The D2 Business Visa and the Portugal Golden Visa program cater to individuals intending to make an investment in the Portuguese economy and desire a pathway to permanent residency.
The EU Blue Card is like a special visa that lets highly qualified people from outside the European Union live and work in Portugal.

Portugal Short-Term Work Visa

If you've secured a freelance project or temporary contract or are participating in international exchanges, the Portugal Short-Term Work Visa enables you to work in the country for up to 90 days within a 180-day period.

The visa, which requires a valid work contract, proof of financial means, and travel insurance, presents a cost-effective solution compared to residence permits, making it an attractive option for a temporary period of work.

Portugal D7 Passive Income Visa

The Portugal D7 Visa — also known as the Portugal Passive Income Visa or the Portugal Retirement Visa — grants legal Portuguese residency status to non-EU/EEA/Swiss citizens looking to relocate to Portugal.

The Portuguese government introduced the D7 Visa in 2007. The visa is designed for individuals who can demonstrate sufficient passive income — the minimum income requirement is €9,120 per year — to support themselves without engaging in employment within Portugal. Qualifying passive income includes sources such as pensions, dividends, rental income, interest, and income from an online business.

Portugal D2 Business Visa

The Portugal D2 Visa, which was created by the government to raise external financial resources to boost the Portuguese economy, is an enticing prospect for individuals with entrepreneurial aspirations who are planning to establish a new venture in Portugal or are eager to extend their business to the country. Often referred to as the Entrepreneur Visa, the Portugal D2 Visa is intended for non-European Union and non-European Economic Area citizens.

Compared to other visas, such as the Portugal Golden Visa or the D7 Passive Income Visa, the D2 doesn't require a significant investment or a regular passive income. Instead, it focuses on business investment and having a viable business idea, which you must be able to demonstrate with a credible and viable business plan. This visa is versatile and can be used for various types of businesses, ranging from small cafes to large real estate agencies.

Portugal EU Blue Card

The Portugal EU Blue Card is great for highly educated individuals with the right skills and experience and even for those who already have a similar card from another European country in the Schengen Area.

With this card, you can work in Portugal for a set period of time, especially in jobs where there aren't enough people or in growing fields. So, if you're a talented professional looking to live and work in Portugal, the EU Blue Card might be your best option.

What does Portugal offer for Digital Nomads?

Portugal is a hub for digital nomads, providing them with a high-quality lifestyle at a reasonable cost, opportunities to explore beautiful landscapes and beaches, and numerous other advantages to make their stay more enjoyable.

Some benefits digital nomads can enjoy while living in Portugal include the following:

Affordable cost of living

Portugal offers a relatively low cost of living compared to other Western European countries, allowing digital nomads to enjoy a comfortable lifestyle without breaking the bank. As an example, consumer prices in Portugal are around 27 percent lower than in Germany and 34 percent lower than in France. Meanwhile, if you're from the US, you'll certainly notice the difference, as grocery prices in Portugal are 49.2 percent lower than in the United States, eating out is 43.9 percent lower, and rent in Portugal is 53 percent lower – according to the latest figures from Numbeo.

High-speed internet

Portugal is known for its fast and reliable internet connections, which is crucial for digital nomads to stay connected and productive while they work remotely. According to Speedtest Global Index (November 2023), Portugal has a national average download speed of 163.50 Mbps, placing it 15th globally. This is significantly faster than the global average of 99.13 Mbps.

A thriving expat community

Portugal has a growing expat community, and the digital nomad community within the country is also developing (with many remote workers coming from the USA, the UK, and Brazil), providing digital nomads with a network of like-minded individuals and opportunities to socialize, make friends and network.

Trendy co-working spaces

With a range of affordable and well-equipped co-working spaces located in the major cities such as Lisbon and Porto, digital nomads can enjoy a supportive and collaborative environment while working remotely in Portugal such as Lacs. If you're a remote worker in Portugal, this can be a good way of meeting new friends and making new business connections.

Beautiful landscapes and cultural experiences

From the stunning beaches to the picturesque cities, Portugal offers a wealth of natural and cultural attractions for digital nomads to enjoy domestic travel and exploration during their downtime.

An attractive business environment

With a strong focus on innovation and entrepreneurship, the Portuguese government has implemented various measures to encourage foreign investment and support the growth of small businesses, and the nation has a thriving tech sector, with many startups emerging in recent years, making it an excellent destination for digital nomads who want to expand their ventures or start new projects.

A digital nomad village

The Portuguese island of Madeira has a digital nomad village, which was created by the Regional Government of Madeira and Startup Madeira. Located in the town of Ponta do Sol, the village, which has a population of about 8,000 welcomes up to 1,000 remote workers at a time. In this village, digital nomads have access to the Slack community and networking events.

What are the best places for digital nomads to live in Portugal?

Lisbon

Lisbon, the captivating capital, pulsates with energy with a thriving startup scene, a diverse community of remote workers, and many coworking spaces. History buffs will be enthralled by its ancient architecture, while foodies can savor delectable cuisine. However, the city's popularity translates to higher living costs compared to other regions.

Porto

Porto offers a more laid-back atmosphere and charming surroundings. Cobblestone streets weave through the Ribeira district, and colorful houses line the Douro River. The city is known for its affordability, delicious port wine, and growing digital nomad community. However, its beach scene is limited compared to coastal areas.

The Algarve

The Algarve, Portugal's southernmost region, attracts many beach lovers and outdoor enthusiasts. With its dramatic cliffs, pristine beaches, and charming towns, it's an idyllic escape. However, the peak season can get crowded, and the cost of living is generally higher than inland areas.

Madeira

Madeira, an autonomous archipelago, offers breathtaking volcanic landscapes, lush rainforests, and a more relaxed pace of life. Ponta do Sol, the designated "Digital Nomad Village," provides co-working spaces, community events, and stunning scenery. However, island life comes with limited connectivity options and potentially higher transportation costs.

Braga

Braga, an ancient city filled with historical landmarks, is a budget-friendly option for digital nomads. Its youthful university vibe creates a dynamic atmosphere, and the surrounding Braga Gerês National Park offers outdoor adventures. However, compared to larger cities, the selection of coworking spaces and nightlife options can be limited.

Finding a Place to Stay as a Digital Nomad in Portugal

If possible, it's best to have your accommodation organized before you arrive in Portugal. When it comes to finding a place to stay in Portugal as a digital nomad, there are several factors that you should consider: do you intend to live in shared accommodation? Do you want to live with other expats? Would you prefer to live alone? Of course, prices will vary substantially based on what you're looking for as well as on the locations and the neighborhoods you're looking in.

For shorter stays, particularly if you intend to travel around or stay near the beach, you can consider Airbnb properties, hotels and hostels. If you intend to stay for a longer period, it might be worth considering long term rental options. As well as Airbnb, you can also look on Facebook, which has many digital nomad groups, and Booking.com.

Financial Aspects of Living in Portugal

Cost of living in Portugal for Digital Nomads

Portugal has consistently attracted digital nomads with its allure of sun, surf, and a relatively affordable lifestyle. Compared to countries in Western Europe countries, the cost of living in Portugal offers more value for money, though individual expenses can vary greatly depending on your desired lifestyle and chosen location.

Accommodation: Housing costs are a major factor to consider. Lisbon, the capital, has the highest rents, with a one-bedroom apartment ranging from €800 to €1,300 monthly. Opting for smaller cities such as Porto, Braga, or Faro can significantly reduce rent costs, with comparable apartments found for €500 to €800. Keep in mind that short-term rentals often come with higher price tags.

Groceries and dining: With fresh produce, seafood, and local staples found at reasonable prices, grocery shopping in Portugal generally offers good value for money. Eating out can range from budget-friendly cafes serving delicious €10 lunches to upscale restaurants costing upwards of €30 per person. Opting for self-catering and exploring local markets will keep your food costs manageable.

Transportation: Public transport in major cities is well-developed and affordable, with monthly passes costing around €40. However, exploring beyond urban centers might require renting a car, which adds fuel and potential parking fees to your budget.

Utilities and internet: Basic utilities like electricity and water are relatively inexpensive, averaging €50-€100 monthly. High-speed internet is widely available and starts at around €30 per month. Remember, these are general estimates, and actual costs can fluctuate depending on your usage and chosen provider.

Bank Account Opening for Non-Residents in Portugal

As a digital nomad planning to stay in Portugal for an extended period, opening a local bank account becomes essential for managing your finances and receiving payments conveniently as a remote worker. While the process might seem daunting at first, it's generally straightforward with the right documentation and understanding of specific requirements.

Eligibility: Non-residents can open bank accounts in Portugal, though specific eligibility criteria vary depending on the chosen bank and your residency status. Typically, a valid passport, proof of address (either your home country or temporary accommodation in Portugal), and proof of income or employment are required.

Documentation: Gather necessary documents beforehand, including a completed application form, passport, proof of address, proof of income, and potentially a reference letter from your home bank. Some banks may request additional documents depending on your specific situation.

Choosing a bank: Research different banks to compare service fees, account types, and online banking functionalities. Popular options for non-residents include Millennium BCP, Santander Totta, and CGD. Consider factors like language assistance, international transfer capabilities, and branch availability near your chosen location.

Account types: Banks offer various accounts, including current accounts for everyday transactions and savings accounts for long-term goals. Non-resident accounts often come with limitations, so clarify fees, withdrawal limits, and international transfer restrictions before opening an account.

Tax implications: Be aware of potential tax implications for holding a Portuguese bank account as a non-resident. Consult a tax advisor for personalized guidance to ensure you comply with Portuguese tax regulations.

Taxes for Digital Nomads in Portugal

Portugal has a Double Taxation Agreement (DTA) in place with 79 countries, including the United States, Canada, Australia, and the United Kingdom. This means that digital nomads who are residents of Portugal and earn income from sources in their home country may be able to avoid being taxed twice on the same income.

Previously, digital nomads in Portugal had been able to apply for the NHR (Non-Habitual Residence) tax regime, which included various tax benefits over a 10-year period. However, the program has been phased out for new applicants. However, digital nomads with NHR status pay a set 20% tax rate on income made within Portugal, as opposed to the ordinary rate of up to 48%.

Registering as a tax resident to pay taxes

Once a residence permit has been obtained, digital nomads must register as tax residents in Portugal. Tax residency is typically for those who spend at least 183 days per year in the country. People in this situation must register with the Portuguese tax authorities. This can be done by visiting a local tax office and providing proof of residence, such as a rental contract, utility bill, or bank statement.

Obtaining a Portuguese tax number (NIF)

It is critical to obtain a Portuguese tax identification number, also known as a Número de Identificação Fiscal (NIF). This number is required for all residents and non-residents who have tax obligations in Portugal. For more information, see Getting A NIF Number in Portugal.

How do digital nomads pay self-employment taxes?

If you're a self-employed digital nomad, it's important to understand the self-employment tax system and how it applies to you. As a self-employed individual, you're responsible for paying taxes on your income, which includes social security taxes.

To get started, you'll need to register with the Portuguese tax authority and obtain a tax identification number, or NIF.

You'll also need to register with the Portuguese Social Security system and obtain a NISS (Número de Identificação na Segurança Social).

As a self-employed individual, you're required to report your income and pay income taxes on a quarterly basis. You'll need to file a tax return each year, which includes any tax deductions you may be eligible for.

It's important to keep accurate records of your income and expenses throughout the year to make the tax filing process easier.

Portugal's tax year

Portugal has a territorial tax system, which means that if you spend more than 183 days per year in Portugal, you'll be considered a tax resident and subject to taxation on your worldwide income. If you're not a tax resident, you'll only be taxed on income earned within Portugal.

In Portugal, the tax year runs from 1 January to 31 December. This means that if you're a taxpayer in Portugal, you'll need to file your annual tax return by 30 April of the following year. For example, if you earned income in 2023, you would need to file your tax return by 30 April 2024. It's important to note that if you're a self-employed individual, you'll also need to make quarterly tax payments throughout the year, based on your estimated income.

As well as self-employment tax income and taxes, you may also be subject to social security tax in Portugal. This tax is based on your income and is designed to provide social security benefits such as healthcare and retirement benefits.

If you're unsure about your tax residency status or have questions about self-employment taxes in Portugal, it's a good idea to consult with tax professionals. They can help you understand your obligations, file state taxes, and ensure that you report income and are filing taxes correctly and on time.

How we can help

To earn an income in Portugal, you need to have a NIF. We offer a service where you can get a NIF remotely from anywhere in the world through our website. You need a NIF to pay taxes and open a Portuguese bank account.

If you're considering working as a digital nomad in Portugal and you're a non-EU national, you're required by law to have a mandatory tax representative in order to get your NIF and manage your taxes. We can both satisfy this fiscal representative requirement and get your NIF for you; all you have to do is get in touch with us.

We can also help you open a Portuguese bank account with a leading Portuguese bank from anywhere in the world. A Portuguese bank account can allow you to pay state taxes with more ease. Additionally, we provide tax management services, and our professionals can provide consultations to help you minimize your tax bill.

Frequently Asked Questions about Digital Nomad Tax in Portugal

Who is eligible to apply for a Digital Nomad Visa in Portugal?

To be eligible for the Portugal Digital Nomad Visa, you must be at least 18 years old; have a valid passport with any necessary travel authorizations; have a consistent monthly income of at least €3,280 (four times the minimum wage), supported by proof of remote work or freelance work; and provide proof of a clean criminal record from your home country, accommodation in Portugal (such as rental agreement), sufficient funds, travel insurance, and health insurance.

What should Portugal Digital Nomad visa applicants include in their cover letters?

For every Portugal Digital Nomad Visa application, a formal cover letter is essential. This letter introduces yourself and clarifies your background, qualifications, and motivations for pursuing the visa.

Structure your letter professionally and formally, tailoring it to the visa's specific requirements. Use this opportunity to offer details beyond the application form, solidifying your case.

Do digital nomads pay tax in Portugal?

Yes, once a digital nomad obtains a residency permit, registering as a tax resident is crucial because spending more than 183 days within the country automatically makes you a tax resident.

Are digital nomads in Portugal obliged to pay taxes in the US?

Yes, American digital nomads must file a US Federal Tax Return if their income surpasses the minimum filing threshold, regardless of their location or remote work status. The US is among a handful of countries globally that implement a tax system based on citizenship.

What do I have to consider as an American digital nomad in Portugal?

If you're a US citizen living in Portugal as a digital nomad, it's important to understand the tax implications of your situation. The US government imposes taxes on its citizens based on their worldwide income, which means that you may be required to pay income taxes in both Portugal and the US. This can result in double taxation, which is why it's important to take steps to avoid it.

One of the ways to avoid double tax is to take advantage of tax treaties between the US and other countries, including Portugal. These treaties are designed to help taxpayers avoid being taxed twice on the same income. For example, under the US-Portugal tax treaty, US citizens living in Portugal can claim a foreign tax credit on their US tax returns for any taxes paid to the Portuguese government.

Another important consideration for US citizens living in Portugal is the Foreign Account Tax Compliance Act (FATCA). FATCA requires foreign financial institutions, including banks, to report information about their US account holders to the US government. This means that if you have a bank account in Portugal, you'll need to report it to the US government, even if you don't owe any taxes.

To ensure compliance and avoid any potential issues with the IRS, it's important to seek tax advice from professionals who specialize in international tax law. These professionals can help you understand your tax obligations, file your tax returns, and take advantage of any tax treaties that may apply to your situation. They can also help you report your income and foreign assets, and file taxes, as well as avoid penalties for non-compliance.

In summary, as a digital nomad in Portugal, it's important to pay taxes, file tax returns, and report your foreign bank accounts and assets to avoid any tax bills. To avoid double taxation and ensure tax compliance, it's a good idea to seek the advice of tax professionals who specialize in international tax law.