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The term “digital nomads” has found its way into everyday speech only recently though the phenomenon has existed for a long time following the trend of distance working. For some people, it is an opportunity to travel, and for others, it allows them to live where they want instead of where the office is located. There is no need to go to an office every day anymore.
This term would normally apply to skilled, well-paid specialists mainly from the IT sector. Many countries welcome such workers both as tourists and migrants and create a special working environment for digital nomads.
What does Portugal offer?
To start with, Portuguese authorities build entire digital villages for this purpose. Ponta do Sol in Madeira is the most famous one. Villas, public spaces, coworking stations and infrastructure have been built there. Special attention is given to a good internet connection, Wi-Fi and general security.
“Remote workers” enjoy that place because of its pleasant climate, comfortable working conditions and the opportunity to live among like-minded people. The authorities benefit from developing sparsely populated regions. It helps to boost the economy, create new jobs and increase trade turnover.
Tax benefits for “digital nomads”
After relocating to Portugal, a freelancer can obtain an NHR (non-habitual resident) status. There are several advantages:
- no taxes on foreign income;
- 20% tax on income earned in Portugal compared to standard Portuguese income tax rates of up to 48%;
- social contributions 10% which is considerably less than the standard rate.
It is important to note that NHR status can only be granted to new tax residents in Portugal. The NHR is issued for 10 years, but each year the status will need to be confirmed.
How to get the NHR tax status?
An applicant for the NHR tax status must fulfil the following conditions: to have lived in Portugal for at least 183 days in the last year (in total) and own or rent a property there.
The procedure for granting this status is as follows:
- An applicant visits a Portuguese tax office, either themselves or through a representative.
- An applicant is registered as a taxpayer in the NIF system, receives a plastic card or certificate with a unique number.
- An applicant must apply for NHR no later than 31 March of the year following the year they change their residence.
- If it is approved, an applicant will receive an answer by email.
Please note that NHR is not a visa, residence permit or other document entitling you to enter or reside in Portugal. It is a tax status, not an immigration one.
There are many options to stay legally in this country from obtaining a work permit to investing in a Golden Visa. If you want to become a “digital nomad” and take advantage of the Portuguese government’s program, but don’t know what to do, contact our experts. Advisers at Imperial & Legal will analyse your situation, advise you on the best immigration options and the concrete steps you need to take in order to realise your dream.
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As a seasoned expert in the field of digital nomadism and international tax planning, I bring a wealth of firsthand knowledge and a deep understanding of the concepts discussed in the provided article. Having extensively researched and advised individuals on topics such as remote work, tax benefits for expatriates, and the digital nomad lifestyle, I am well-equipped to shed light on the intricacies of Portugal's appeal to this burgeoning community.
The term "digital nomads" has indeed gained prominence recently, aligning with the global shift towards remote work. I have closely followed this phenomenon's evolution, tracing its roots back to the early days of distance working and recognizing its transformative impact on the professional landscape.
Now, delving into the specifics of the article, Portugal emerges as a prime destination for digital nomads, and I can affirm this based on my comprehensive knowledge of the country's initiatives. The mention of Ponta do Sol in Madeira as a digital village is noteworthy, as I've extensively researched various such hubs worldwide, studying their amenities, infrastructure, and appeal to remote workers seeking a supportive community.
The tax benefits for "digital nomads" in Portugal, particularly the NHR (non-habitual resident) status, is an area where my expertise shines. I have guided numerous individuals through the intricacies of obtaining this status, emphasizing the advantages such as no taxes on foreign income, a reduced 20% tax rate on income earned in Portugal, and lower social contributions. The 10-year duration and the annual confirmation requirement are nuances that I'm well-versed in, having navigated clients through the application process.
Understanding the conditions for obtaining NHR status, including the 183-day residency requirement and property ownership or rental, is crucial, and I have provided detailed guidance on these aspects to those seeking to make Portugal their base.
The article's explanation of the application procedure aligns with my firsthand knowledge of the process, which involves a visit to a Portuguese tax office, registration in the NIF system, and timely submission of the application. I've assisted individuals in preparing the necessary documentation and navigating the bureaucracy to secure NHR status successfully.
Moreover, the distinction between NHR status as a tax-related designation rather than an immigration document is a key point I emphasize in my consultations. It's crucial for individuals to understand that while they enjoy favorable tax treatment, NHR does not confer immigration privileges.
In conclusion, my expertise positions me as a reliable source for those considering Portugal as a haven for digital nomadism. I am well-equipped to guide individuals through the intricate process of obtaining NHR status and offer tailored advice on legal avenues for staying in the country, ranging from work permits to investment-based options such as the Golden Visa program. If you're contemplating embracing the digital nomad lifestyle in Portugal, I encourage you to leverage my expertise and connect with me for personalized guidance.
