At a time when remote work is rapidly reshaping the global workforce, Portugal has emerged as one of the most attractive locations for digital nomads. Since the introduction of its digital nomad visa program in October of last year, the nation has granted visas to over 2,600 remote workers, predominantly from the United States, Brazil, and the United Kingdom.
This newfound allure of Portugal among digital nomads is attributed to several factors, as highlighted by lawyer Ricardo Nascimento. The country’s mild climate, affordable living costs, and rich culture create an appealing place for remote workers to set up their base. Portugal’s position as the sixth most favorable destination on the Global Remote Work Index along with its abundance of beaches further cements its status in the remote work community.
However, recent policy changes may significantly impact this trend. The recently resigned Portuguese Prime Minister, António Costa, announced the termination of the Non-habitual Residence (NHR) tax regime for new entrants from 2024. This regime, introduced in 2009, aimed to attract skilled professionals and wealth to Portugal by offering reduced tax rates on income for a decade. Costa argues that this scheme, while successful in its time, now contributes to inflated housing prices and a disparity in the living conditions of locals and expatriates.
Costa’s decision reflects a broader concern about the social implications of such policies. As Manuel Poças reports in an article for Portugal.com, “The NHR is arguably ceasing to make sense because it can be perceived as sending the wrong message. Many believe that the inequality between the special regime and the traditional regime is doing more harm than good to Portuguese society.”
Meanwhile, the nation faces an ongoing challenge of retaining its homegrown talent. A significant portion of Portugal’s college graduates, estimated at 40% by Business Roundtable Portugal, emigrate annually in search of better opportunities. This brain drain is compounded by the increasing difficulty in hiring and retaining local workers, as noted by Banco Comercial Chairman Nuno Amado. Ironically, while the government’s policies have successfully attracted foreign residents, they may have inadvertently made local recruitment more challenging.
Overall, Portugal’s digital nomad visa has opened new horizons for remote workers globally. However, the changing tax landscape and the challenge of balancing the needs of local and foreign residents continue to shape the country’s approach to this modern workforce. While it has been a successful first year for the Portugal digital nomad visa program, time will tell how long the program will remain.
For those interested in the digital nomad visa, Portugal offers two types: a residency visa for an initial four months, extendable to two years, and a 12-month temporary stay visa. Eligibility criteria include being a non-EU/EEA citizen, earning a minimum monthly salary of over €3,040, having a remote work contract, and arranging accommodation in Portugal. While in their home countries, applicants must submit various documents, including proof of income, health insurance, and a criminal record certificate, via the Portuguese Ministry of Foreign Affairs Website and attend an appointment at a Portuguese consulate. The application fees are €75 for a temporary stay visa and €90 for a long-term visa. If you apply for a long-term visa after being approved for a digital nomad visa, you will also have an appointment in Portugal. At this meeting, you will need to submit the same documents you submitted to the consulate in your home country and pay a fee of €170. After this application is processed, you will receive the mail by post.