Would you like to run your business (or a new online business) in sunny Portugal? The Portuguese government has just made it easier than ever with the launch of their e-Residency platform.
The Portugal e-Residency program offers entrepreneurs from all over the world a virtual residency in Portugal, which allows them to take advantage of all that this charming country has to offer for business. In this article, we will give you a comprehensive guide to e-Residency in Portugal.
Remote work is no longer a distant dream, it’s here to stay. In the long run, e-residency may be a good option for you if you’ve been thinking about having a business in the EU or would like to use the EU banking system, this e-residency program is probably a good way to get started.
Portugal e-residency: What is it, and how does it work?
The e-residency program in Portugal is quite similar to Estonia’s e-residency scheme. It allows anyone who wishes to set up business in Portugal without being taxed there to do so. Portugal’s National Health Services and personal and corporate banking services will be open to e-Residents.
Non-resident citizens and companies can utilize the e-Residency platform to obtain a digital identity and residency in Portugal, which grants them access to online Portuguese public services and a tax identification number (NIF) and a social security number (NISS). In order to engage in professional or business activity, you’ll need these numbers to set up a company and create a bank account.
Public and commercial services are being developed in Portugal for people who plan to establish a fiscal business headquarters there. It goes without saying that all of Portugal’s government websites that provide vital resources for entrepreneurs will be made available in English. To facilitate the procedure, all material and legal papers will be available in both Portuguese and English.
During the initial phase of the program, Portugal hopes to attract more than 5,000 participants.
What Portugal e-residency is not
The Portuguese e-residency may be a good starting point to conduct your online business (or part of an existing business) in Portugal, but it is important to stress that e-residency is not:
- Actual Portuguese Citizenship or Residency
- Tax evasion: a method of avoiding taxes in your home country.
- A visa or a passport that you can use for international travel.
Who Would Benefit from a Portuguese E-Residency?
First and foremost, you must be a non-EU/EEA national. You can’t be a European citizen or a resident of the Schengen Area. This program should be particularly interesting to:
If you are a digital nomad, all you need is high-speed Internet access and a place to work comfortably. Digital nomads can set up their firm in Europe and work from anywhere in the world thanks to e-Residency.
Freelancing is fun, but it also comes with a slew of difficulties. Administrative issues are the major problem. All accounting and administrative procedures can be handled by e-Residency, a virtual firm in Europe.
Portugal is a startup powerhouse. The amount of tech startups relocating to Lisbon because of the Web Summit is astounding. It’s a great place to start a business in Europe because of its extensive networking opportunities. You’ll have an easier time getting work in Portugal if you’re an e-Resident of Portugal.
Advantages Of Obtaining E-Residency
There are several benefits to Portuguese e-Residency that will become clear once the program is fully operational. Estonia’s e-Residency is a model that they are following.
As a result, it is likely that the perks listed below will be the most valuable aspects of obtaining Portuguese e-Residency:
- There are many digital banks in Portugal, such as N26, that you can open an account with easily.
- As an e-Resident, you won’t be required to spend any time in Portugal, so you can enjoy the benefits of the status from anywhere in the globe.
- The European Union is still a highly sought-after location for business. Particularly so in Portugal. You’ll be able to start a business in Portugal with the help of this program.
- Use your e-resident ID card to sign, encrypt, and share documents over the internet while working from anywhere in the world. You’ll also be able to take advantage of all of the government’s critical services.
- As an Estonian e-resident, you are automatically included in an international network of like-minded individuals. This will also be the case in Portugal. You’ll get to know other like-minded professionals and entrepreneurs who are also working from home.
E-Residence in Portugal: How Do I Apply?
As of 2022, there has been no official introduction of the program. As a result, we don’t know how to apply.
As soon as it launches, we will provide a step-by-step breakdown of what documentation is required and how to submit the application.
The big difference between the Estonia e-residency and the one in Portugal, is that for the latter you will be able to do the complete application online (for Estonia you have to visit the country once).
Opening a Portuguese Bank Account
You’ll almost certainly need a bank account if you’re going to be an e-resident in Portugal. It’s far easier to open a bank account in Portugal than it is in much of Europe.
In Portugal, obtaining a tax identification number known as the Número de Identificação Fiscal (FIF) is required before opening a bank account (NIF). No bureaucracy fears here, it’s a simple process.
How to Start a Company in Portugal
If you’re an outsider looking to start a business in Portugal, having the e-resident status makes things a lot simpler. A few options are still available even before the full specifics of Portugal’s e-residency scheme have been made public.
The first steps are always the same, regardless of the method:
- A Portuguese residence card can be obtained using the following methods (e-residency will cover you on this)
- You will need a tax identification number (NIF) from the Portuguese tax authority.
- Obtain a Portuguese social security number from the Social Security Administration.
The legal structure of the business is the next step once you have an idea, a company name, and an address. Portugal is home to a variety of business models, including the following:
- Individual Limited Liability Establishment
- Sole Trader
- Single Member Limited Company
- Private Limited Company
- Public Limited Company
- Limited Liability Partnership
One of the first four possibilities above is likely the best option for freelancers.
To get your business off the ground, you can choose one of three options:
- Build a Website (Empresa Online)
- Get up and start business on the fly (Empresa de Hora)
- The old-fashioned way (Criação de Empresa), which is time-consuming and complex.
The Cost of Doing Business in Portugal
In Portugal’s income tax system, self-employment and business income are classified as Category B Income. Using a simplified tax system, they can be taxable.
Portugal has a VAT tax rate of 23 percent on commodities other than food, drink, and basics. There is a progressive tax rate for all forms of income tax, regardless of the amount of income.
According to Portuguese law, the tax year is from January 1 to December 31.
What Is the Purpose of This Program?
The program is being developed by Startup Portugal and the Portuguese government. Startup Portugal is a semi-public/private think tank tasked with developing and implementing government programs aimed at fostering the growth of Portugal’s entrepreneurial scene.
With the goal of making Portugal an international commercial and professional hub, the Portuguese government launched the e-Residency platform in order to attract non-resident talent and foreign enterprises.
The government of Portugal is constantly looking for ways to encourage and promote innovation and entrepreneurship. There are a variety of initiatives planned for 2022 that include Portugal’s e-Residency 2.0 Program, the introduction of StartUp Hub, the + CO3So Digital Program, and the One-Stop Shop.
Startup Portugal is a big success and it contributes a lot of value to the startup community in Portugal.
What Is the Final Say on Portuguese E-Residency?
Because the initiative has not yet been launched, it is too early to make any conclusions. We’re big fans of Portugal, so we’ll be sure to check it out and report back.
In the meanwhile you can check this video for some more information on the program: