e-Residency of Portugal: The Definitive Guide

Originally published at: e-Residency Portugal: The Definitive Guide | GoVisaFree

Remote work is no longer the future, it’s the present.

If you always dreamed of doing business in Europe but did not know where to start as a freelancer, an entrepreneur, or a digital nomad, perhaps e-residency is right for you.

The Portuguese government actively seeks measures to support and attract innovation and tech entrepreneurship.  In 2020, they announced a number of initiatives, these include Portugal’s e-Residency 2.0 Program, the launch of StartUp Hub, the + CO3So Digital Program, and the One-Stop-Shop for entrepreneurs.

Let’s not get diverted, though, our focus is on the e-Residency program, Portugal’s digital identity initiative.

What is e-residency Portugal?

The e-residency program of Portugal is similar to what the e-residency in Estonia offers.  It will allow anyone who wants to establish a company in Portugal to do so without being a tax resident in the country. e-Residents will be allowed to access personal and business banking services, as well as National Health Services in Portugal.

The Portuguese government is working on creating public and private services to offer to those who intend to have a fiscal business headquarters in Portugal. Needless to say, all necessary Government websites in Portugal with crucial information and services on entrepreneurship will be translated to English.  The informational and legal documentation necessary for the process will be bilingual in Portuguese and English.

In its first phase, Portugal intends to attract more than five thousand applicants to the program.

What e-residency is Not?

Well, although not all e-residency programs are created equal, the chances are the Portuguese e-residency will not be:

  • Actual Residency or Citizenship in Portugal
  • Tax Avoidance: a way to get rid of taxes in your country of domicile
  • Travel Document: a passport or a visa

Who Is Portuguese E-Residency Right For?

Well, first off, you need to be a nun-EU/EEA citizen. You should be from outside of the Schengen Area and not hold a European citizen card.

Starting a European business is a big convenience. It’s particularly interesting to;

  • Digital Nomads

As digital nomads, all we need is fast wifi and a comfortable space to work in. e-Residency allows us, digital nomads, to set up our business in Europe and work from wherever we desire. 

  • Freelancers

Freelancing is cool but has a set of challenges. The biggest challenge is administrative affairs. e-Residency offers a virtual business in Europe to perform all accounting and administrative tasks.

  • Entrepreneurs

Portugal is an absolute startup hub. Lisbon is host to the Web Summit and the number of tech startups moving to the city is incredible. It is an ideal entrepreneurship hub in Europe with immense networking possibilities. Being a Portuguese e-Resident will give you a foot in the door.

Benefits Of E-Residency

We will know the exact benefits of Portuguese e-Residency once the program is officially launched.  However, we do know that they are modeling after Estonia’s e-Residency. So, this hints to us that the below perks will certainly stand out as the main advantages of Portuguese e-Residency.

You may also choose to open an account with a digital bank that is available in Portugal, e.g. N26.  Here’s our guide on N26 Bank in Portugal and our review of the N26 Bank in general.

Pros

  • Location Independence: As being an e-Resident will not have any stay requirement in Portugal, you can enjoy the status from anywhere in the world.
  • EU Company: Europe is still a very desirable destination for businesses. Portugal, in particular, even more so. The program will give you the chance to set up a business in Portugal.
  • Grow Your Business Remotely: You’ll be able to use your Portugal e-resident ID card to sign, encrypt, and transfer documents online. You will also have access to the essential government services.
  • Become a Part of the Global Community: In Estonia, the e-resident status immediately puts you in a community of like minded people. It will certainly be the case in Portugal as well. You will have the chance to mingle with a network of like-minded location independent professionals and entrepreneurs.

How To Apply for E-Residence in Portugal?

As of 2021, the program did not launch yet. So, we do not have details on how to apply.

As soon as we do, we will post in detail what documents need to be gathered, and how to submit the application, as well as the rest of the process.

Opening a Bank Account in Portugal

As an e-resident in Portugal, you will most likely need to open a bank account. Unlike most countries in Europe, it is rather straightforward to open a bank account there.

The prerequisite to opening a bank account in Portugal is obtaining a tax identification number called Número de Identificação Fiscal (NIF).  Don’t worry, that’s very easy to do.

Here’s our guide to getting a NIF in Portugal and to opening a bank account in Portugal.

Setting Up a Business in Portugal

As a foreigner, who is interested in setting up a business in Portugal, the e-resident status will give you lots of ease.  However, before the details of the Portuguese e-residency program is out, you still have a couple of methods available to start a business there.

Regardless of the method, the first steps are always:

  • Get a Portuguese residency card (e-residency will cover you on this)
  • Get a tax number (NIF that we referred to above) from the Portuguese Tax Office
  • Get a social security number from the Portuguese Social Security

Assuming that you already have a business idea, a company name, and an address, you then need to decide on the legal structure of the business.  There are a few business types available in Portugal:

  • Sole Trader
  • Single Member Limited Company
  • Individual Limited Liability Establishment
  • Private Limited Company
  • Public Limited Company
  • Partnership
  • Limited Liability Partnership
  • Cooperative

If you are a freelancer, you will probably be interested in one of the first four options above.

You have three available methods to set up the company:

  • Setting up Online (Empresa Online)
  • Setting up On-the-Spot (Empresa de Hora)
  • The traditional Way (Criacao de Empresa), this one is rather old-school and a bit cumbersome.

Taxes In Portugal

Self-employment income and business income are classed as Category B Income in Portugal’s income tax system. These can be taxed under a simplified regime.

The VAT tax rate is 23% on goods other than basic necessities, food, and drink in Portugal. For all income tax there is a progressive rate.

The tax year in Portugal runs from January 1st to December 31st.

Who Is Behind the Program?

Startup Portugal is working on the program in collaboration with the Portuguese Government.  Startup Portugal is a semi-public and semi-private think tank in charge of creating and running government initiatives on thriving the entrepreneurship community in Portugal.

Well, we’re big fans of Startup Portugal, think they’re doing a great job and adding a lot of value to the startup scene in Portugal

The Verdict: Is Portuguese E-Residency Worth It?

It’s really too soon to tell, as the program is not up and running yet.

As Portugal-lovers, we will be sure to check it out for ourselves and write up our verdict in full detail.

In the meantime, check out our comprehensive review of the e-Residency Program in Estonia.