Moving to Portugal for remote work sounds like a dream, but costly legal and tax mistakes can turn it into a nightmare.
Many remote workers, expats, and freelancers fall into common traps that lead to fines, double taxation, or worse. The rules changed significantly in 2024 and 2025, and relying on outdated information is a major risk. This guide breaks down the top five most expensive errors we see people make and, more importantly, shows you exactly how to avoid them.
Here are the five most expensive mistakes we keep seeing remote workers make in Portugal.
1. Misunderstanding the 183-Day Rule
Many remote workers arrive in Portugal without fully understanding the 183-day rule, which is a cornerstone of tax residency. If you spend 183 days or more in Portugal within any 12-month period, even if those days are not consecutive, you are automatically considered a tax resident. This means you may owe tax on your global income, not just income earned in Portugal.
The common mistake is assuming that because you are not working for a Portuguese company or because you do not have a physical office, you are exempt. This is not true. Your physical presence is the primary factor. Many people do not realize they have crossed this threshold until they are deep into the tax year, leading to unexpected tax liabilities and potential penalties. There are no border stamps or automatic alerts to tell you when you become a tax resident, but the rule applies regardless.
How to avoid this mistake:
Track your days in Portugal carefully. Use a simple spreadsheet, a calendar app, or a dedicated travel tracker to monitor your presence. Understand your tax exposure from day one. If you anticipate becoming a tax resident, register early with the Portuguese tax authorities (Finanças) and seek advice on your global income obligations. This proactive step can prevent significant financial surprises later.
2. Thinking Your D7 or D8 Visa Means You Are Compliant
Holding a valid visa, such as a D7 (Passive Income Visa) or D8 (Digital Nomad Visa), is a crucial first step to living legally in Portugal. However, many remote workers mistakenly believe that having the visa automatically means they are fully tax and legally compliant. This is a dangerous assumption.
Your visa grants you the right to reside, but it does not automatically register you with all necessary Portuguese authorities. You must take additional steps to register with the Portuguese tax office (Autoridade Tributária e Aduaneira, often called Finanças) and submit proof of your tax registration to the immigration agency (AIMA, formerly SEF) within 30 days of your visa activation. This includes providing:
- Proof of your Portuguese tax identification number (NIF).
- Proof of your Portuguese address.
- Details of your Portuguese bank account.
- Proof of health insurance coverage.
Missing these critical steps can trigger fines, significant tax delays, and severe problems when it comes time to renew your visa or residency permit.
How to avoid this mistake:
Do not delay these post-arrival registrations. As soon as you have your NIF and a Portuguese address, begin the process. You can use our free Portugal Setup Checker to identify exactly what you need to do, or for complex situations, book a Clarity Call with a licensed Portuguese immigration lawyer to handle this fast and correctly.
3. Delaying Freelancer Registration (NISS)
For remote workers operating as freelancers or independent contractors in Portugal, delaying registration for social security (NISS, Número de Identificação da Segurança Social) is a common and costly error. Many assume they can wait until they have a steady income or until they have been in the country for a while. This delay can lead to significant financial penalties.
If you are working as a freelancer, you must register your activity with Finanças and then with Segurança Social (Social Security) promptly. Delaying this process can result in:
- Fines ranging from €150 to €300.
- Monthly penalties of €50 for continued non-compliance.
- Mandatory back payments on social security contributions, which can accumulate quickly.
Additionally, if your annual income as a freelancer exceeds €15,000 (in 2025), you are required to register for VAT (Value Added Tax) and start charging it on your invoices. Many freelancers miss this threshold, leading to further fines and back taxes.
How to avoid this mistake:
Do not wait to open activity (abrir atividade) as a freelancer. Understand the process for registering with Finanças and Segurança Social immediately upon starting your freelance work. Familiarize yourself with the VAT thresholds and requirements. Staying compliant from the beginning will save you from substantial fines and stress.
4. Paying Double Social Security
A significant financial drain for many remote workers in Portugal is unknowingly paying social security contributions in two different countries. If you work for a company based in the US, the UK, or another EU country while living in Portugal, you might find yourself contributing to both your home country’s social security system and Portugal’s.
This means extra deductions from your income, often with no reciprocal coverage or credit for contributions in either system. It is a common misconception that simply being a resident in Portugal means you must pay Portuguese social security, even if your employer is abroad.
Portugal has bilateral agreements, known as Totalization Agreements (with countries like the US) or EU regulations (for EU/EEA/Switzerland), designed to prevent double social security taxation. These agreements allow you to pay into only one system, typically the one where you are physically working. However, you must actively claim this exemption and obtain the necessary certificates (like an A1 certificate for EU/EEA or a Certificate of Coverage for the US). Most people are unaware of these agreements or how to claim them.
How to avoid this mistake:
If you work for a foreign company, check if your home country has a social security agreement with Portugal. Inform your employer about your residency in Portugal and inquire about obtaining the relevant certificate (e.g., A1 or Certificate of Coverage). This certificate proves you are covered by your home country’s social security and exempts you from Portuguese contributions. Navigating these agreements can be complex, and expert guidance can save you thousands of euros.
Not sure where you stand with your tax or social security obligations? Run a free Portugal Setup Check here to get a personalized risk assessment and checklist.
5. Assuming You Still Qualify for NHR
The Non-Habitual Resident (NHR) tax regime was a major draw for remote workers and expats moving to Portugal, offering significant tax benefits. However, the NHR regime officially closed at the end of 2023. Many remote workers still assume they are covered by NHR or believe there is a simple way to apply for it in 2024 or 2025. This is a critical and expensive misunderstanding.
You only qualify for a transitional NHR regime in 2024 or 2025 if you meet very specific, strict criteria, such as:
- Having started the visa application process or signed a rental agreement/property purchase before the end of 2023.
- Being a highly qualified professional in specific tech or startup sectors, earning over €100,000 annually.
- Being a pensioner with guaranteed income under specific conditions.
For the vast majority of new remote workers arriving in Portugal in 2024 or 2025, the NHR regime is no longer an option. Instead, you will fall under the general Portuguese tax regime or potentially the new “Incentive to Scientific Research and Innovation” tax regime, which has different rules and benefits.
How to avoid this mistake:
Stop relying on old blog posts or outdated advice. Do not make financial plans based on the NHR regime if you are a new arrival in 2024 or beyond. Confirm your tax status and applicable tax regime with a licensed Portuguese tax expert. Understanding your actual tax obligations from the start is essential for accurate financial planning.
Need clarity? Here is what to do next:
Option 1: Free Setup Check
Take a 2-minute quiz to check your visa, tax, and legal setup. Get a risk score and expert-backed next steps.
→ Start the Setup Check
Option 2: €49 Clarity Call
Get 1-on-1 advice from us. If your case needs legal or tax support, we’ll refer you to a vetted expert.
→ Book a Clarity Call
FAQ
Q: What is the 183-day rule in Portugal?
A: The 183-day rule states that if you spend 183 days or more, consecutive or not, in Portugal within any 12-month period, you are considered a tax resident and may owe tax on your global income.
Q: Does my D7 or D8 visa make me tax compliant in Portugal?
A: No, holding a visa does not automatically make you tax compliant. You must separately register with the Portuguese tax authorities (Finanças) and provide proof to the immigration agency (AIMA) within 30 days of your visa activation.
Q: What happens if I delay my NISS registration as a freelancer in Portugal?
A: Delaying NISS registration can lead to fines of €150–€300, monthly penalties of €50, and mandatory back payments on social security contributions. You may also face issues with VAT if your income exceeds €15,000 annually.
Q: How can I avoid paying social security in two countries while working remotely in Portugal?
A: If your home country has a social security agreement with Portugal (like the US or EU countries), you can apply for a certificate (e.g., A1 or Certificate of Coverage) that exempts you from Portuguese social security contributions, allowing you to pay into only one system.
Q: Can I still apply for the NHR tax regime in Portugal in 2025?
A: The NHR tax regime closed at the end of 2023 for most new arrivals. You can only qualify for a transitional NHR regime in 2024 or 2025 under very specific, strict criteria, such as having started the visa process before 2024 or being a highly qualified professional in specific sectors.
