1. Introduction

Portugal is now one of the preferred destinations of many high-net-worth individuals. This is because Portugal offers unique living conditions, a welcoming environment, an investment golden visa programme and offers investment opportunities in a wide variety of sectors.

Portugal is a country located in the southwestern Europe, enjoying a prime location, good climate and an immense natural beauty from sandy beaches and cliffs along the Atlantic Coast to mountains in the country’s inland. Portugal is a member state of the European Union, an economic and political block grouping 27 European countries.

With a lower cost of living than most of Western Europe and a good quality of life, Portugal is well suited for families, modern investors, businesspeople and retirees.

Portugal enjoys a high level of security compared to most countries worldwide, including those in Western Europe. According to the Global Peace Index, Portugal ranks 7th globally and 5th in Europe. This index assesses "global peace" based on three main criteria: societal safety and security, the extent of domestic and international conflict, and the degree of militarisation.

This briefing describes the various legal and practical aspects of living in Portugal for foreign nationals considering moving to Portugal, such as residency visa, personal income taxes, buying or renting a home, employment conditions, health and education.

Other key information concerning the most relevant aspects about doing business or working in Portugal is available at www.macedovitorino.com/en/Why-Portugal. The «Why Portugal» webpage contains a description of the main aspects that concern businesses and individuals investing in Portugal, including:

• how to set up a business;
• forms of investment incentives and government grants available and how to apply;
• getting a Portuguese residence permit or a golden visa;
• hiring employees, employers' obligations and rules concerning the dismissal of employees;
• Portugal's main taxes, including among others personal and corporate income taxes, VAT and property taxes;
• intellectual property protection, software, patents, trademarks and technology;
• real estate, acquisition and lease of property and financing and tax related issues; and
• dispute resolution, the judicial system and of the main steps and costs of lawsuits.

2. Moving to Portugal

 2.1. WHEN IS A VISA NOT REQUIRED?

Citizens of non-European Union countries that are part of the Schengen Area—Iceland, Liechtenstein, Norway, and Switzerland—as well as nationals from certain third countries, including the United States, Singapore, and the Hong Kong and Macao Special Administrative Regions, do not require a visa for short stays in Portugal. British citizens may also visit Portugal for holidays or short visits of up to three months without a visa, provided they hold a valid passport covering the entire duration of their stay. Nationals from these countries are only required to present an identity card or passport issued by their country of origin upon entry.

EU citizens intending to reside in Portugal for more than three months must apply for a registration certificate at the local municipality within 30 days after completing their initial three months of stay. After holding a registration certificate and residing in Portugal for over five consecutive years, individuals are required to apply for a permanent residence certificate, which is issued by AIMA (Agência para a Integração, Migrações e Asilo, I.P.).

2.2. WHEN IS A VISA REQUIRED?

To enter Portugal, non-EU citizens must obtain a valid travel visa and a recognised travel document and must not be subject to any alerts from AIMA.

Citizens of third countries who wish to reside in Portugal must apply for a residence visa at the Portuguese consular services in their country of residence. This long-term visa allows the holder to stay in Portugal for up to four months, during which time they may apply for a temporary residence permit issued by AIMA.

There are several subtypes of residence visas, including:

• visas for subordinate professional activity;
• visas for independent professional activity or for entrepreneurial migrants;
• visas for teaching, highly qualified, or cultural activities;
• visas for research, study, exchange programs for higher education or secondary school students, internships, and volunteering; and
• visas for family reunification.

Foreign nationals who are unable to provide for their own sustenance are not allowed to enter the country, whether for a temporary stay or as a transit to another country where their admission is assured.

2.3. GOLDEN VISA

2.3.1 GOLDEN VISA REQUIREMENTS

The Residence Permit for Investment Activity (ARI), commonly called "golden visa", is designed for investors from non-EU countries seeking residence in Portugal. "Golden visa" grant holders the right to free movement within Portugal and other Schengen countries.

This program allows residence permits for individuals who make significant investments in Portugal and meet specific criteria. In addition to the general requirements for residence permits, obtaining a golden visa requires a mandatory investment in one of the following areas:

• creating at least ten job positions, with the investment evaluated every two years to assess its impact on job creation;
• transferring €500,000 to public or private scientific research institutions within the national scientific and technological system. This investment is also evaluated every two years to measure its impact on scientific and cultural activities;
• transferring €250,000 to support artistic productions or the preservation of national cultural heritage;
• transferring €500,000 for the acquisition of shares in non-real estate collective investment funds; or
• transferring €500,000 to create a new company or contribute to an existing one, plus creating at least five permanent jobs or maintaining at least ten jobs (with a minimum of five permanent positions for at least three years). This investment is evaluated every two years to assess its impact on foreign direct investment and job creation.

Real estate investments are no longer eligible for the golden visa program. However, this change does not affect the renewal of residence permits for investments made before the new law took effect on 7 October 2023. Applications submitted before that date, and still pending a decision, are also not impacted.

Under the revised golden visa programme, no investment activity may be directly or indirectly related to real estate.

Non-EU citizens may have their residence permit applications refused, or existing permits cancelled, if they are subject to EU sanctions.

The residence permit must be renewed every two years, provided the applicant continues to meet the investment requirements.

The investment may be made in the applicant’s own name or through a single-member limited company registered in Portugal, provided the applicant is the sole owner.

2.3.2. HOW TO OBTAIN A GOLDEN VISA?

In addition to one of the investments already listed, to obtain a «Golden Visa», the applicants must also:

• be physically present in Portugal, have or rent a residence in the country and have sufficient means to support themselves;
• be registered with the Portuguese Social Security Authority if the activity in question is subject to registration in Portugal;
• not have been convicted of criminal offences, punished with imprisonment for a year or more or with entry ban in Portugal;
• not have been flagged in the Schengen Information System and in the Portuguese authorities' information system to bar their entry into the country;
• hold a valid Schengen visa (if not exempt by any visa waiver); and
• apply for the legalization of the stay in Portugal within 90 days after the first entry.

The application for ARI («golden visa») must be submitted online (http://ari.sef.pt) for prior validation by AIMA Once the application has been validated, the applicant is then allowed to make the appointment to go to AIMA facility, since the submission of documents related to the investment and the collection of biometric data is mandatory to be done in person.

The administrative cost of a residence permit application is approximately €6,939.87 and €2,906.61 for each renewal. If all requirements are met at the outset and the services require no further due diligence, the authorization is normally granted within 120 days of submitting the form and its documents.

Following the changes to the income tax laws, the holder of a "golden" visa will no longer benefit from special taxes applicable to non-habitual residents but may benefit from lower taxes since investment in funds does not involve heavy taxes and duties like the investment in real estate.

In addition, holders of "golden" visas are entitled to apply to extend the residency visa to family members, who are eligible to obtain permanent residence for themselves and their families after five years of holding a temporary residence permit in Portugal, with a stay requirement of only seven days per year.

2.4. START-UP VISA PROGRAM

As a follow-up to the original golden visa programme, IAPMEI, the Portuguese Investment Agency (IAPMEI – Agência para a Competitividade e Inovação) set up the "Start-Up Visa" programme which aims to promote the creation of new businesses and innovative projects.

The program is intended for entrepreneurs who wish to develop entrepreneurial or innovative projects in Portugal, even if they haven’t already set up a company or if they have business projects in their countries of origin and that wish to carry on their activity in Portugal. Candidates must fulfil the following requirements:

• not to have a permanent residence in a country of the Schengen Area;
• to have fulfilled their obligations before the Portuguese Tax Administration and Social Security (if applicable);
• not to have a criminal record;
• to be of age;
• to possess the financial resources equivalent to 12 times the Social Support Indexation (IAS).

For the presentation of the application, the candidate must complete an online form with his identification and the other entrepreneurs involved and also the description of the project, accompanied by the following documents:

• letter of motivation;
• copy of the passport;
• criminal record from their origin country;
• statement from the bank that proves the existence of own financial means of sustenance and the possibility of transferring these funds to a bank operating in Portugal; and
• curriculum vitae.

Applicants should submit their application to one or more incubators on the certified incubators list. In the second phase, the entrepreneur must complete the application information and submit it to IAPMEI through an online platform. Eligible entrepreneurs under the program will conclude an incubation contract with the certified incubator.

 3. TAXATION

3.1. GENERAL INFORMATION

Portugal's nominal tax rates align closely with those of other EU countries, but the country stands out by offering some tax incentives. These include attractive benefits for foreigners, such as the Non-Habitual Resident Tax Regime and the free remittance of funds, which demonstrate Portugal's commitment to attracting international talent.

Regarding income earned abroad, Portugal has entered into over 60 double tax avoidance treaties with countries including Malta, Macao, the United States of America, Poland, Russia, and Hong Kong, among others.

Additionally, Portugal has signed more than 50 bilateral agreements for the promotion and reciprocal protection of investments, alongside over 15 tax information exchange agreements.

3.2. REGISTRATION AS A PORTUGUESE TAXPAYER

To register as taxpayer in Portugal it is necessary to fill in a registration form (ficha de inscrição) in local tax office. The tax registration should be before any activity is carried out in Portugal. The annual income tax return must be completed and delivered to the Portuguese Tax Authority.

The Portuguese tax system is managed by the Portuguese Tax Authority (Direcção-Geral dos Impostos). The tax year follows the calendar year, ending on 31 December.

Self-employed workers must declare the beginning of their activity to the Portuguese Tax Authority.

The annual personal income tax return (Modelo 3) must be filed between 1 April and 30 June of the following year, exclusively via the official online portal.

If a person does not comply with their tax obligations to complete the annual income tax return will be subject to a penalty, which amount ranges from €150 to €3.750.

3.3. PERSONAL INCOME TAX

The personal income tax (Imposto sobre o Rendimento das Pessoas Singulares. IRS) is levied on the yearly amount of incomes received by resident in Portugal, after the appropriate deductions and allowances. It includes salaries, capital gains and real estate income, including income obtained abroad.

It is possible to make a number of limited income deductions in Portugal, such as:

• a general deduction for each taxpayer and each of their dependants;
• health expenses;
• education and training expenses;
• elderly person's day/night care burdens;
• burdens related to real estate and renewable energies;
• burdens related to life and health insurance policies;
• international double taxation;
• some special tax exemptions and/or reductions; and
• some specific deductions depending on the kind of income obtained.

Foreign-sourced income, including pensions, dividends, interest, and capital gains, continues to be exempt from Portuguese taxation provided it is subject to taxation in the source country under a applicable double taxation agreement or based on OECD model tax convention principles. This remains a significant benefit for individuals with international income streams, reinforcing Portugal’s appeal as a tax-efficient destination.

3.4. CAPITAL GAINS TAX

Capital gains derived from the transfer of real estate or shares, or other investments, are also considered as income and taxed as personal income tax.

In case of non-residents, the capital gains, in general, are subject to a flat tax rate of 28%, except some capital gains on the disposal of shares which are exempt in certain cases.

Regarding the sale real estate, income derived from the transfer of property is only taxed on half of their value and the applicable tax rate depends upon the resident's aggregate income. However, if a person sells their permanent residence and reinvests the capital gain obtained in the acquisition of another permanent residence in Portugal within 36 months following the sale, the capital gain is not taxed. For this exemption to apply, there are some requirements that must be fulfilled.

To register as a taxpayer in Portugal, filling out a registration form at the local tax office is necessary, which should be done before any activity is carried out in Portugal. Self-employed workers must declare the beginning of their activity to the Portuguese Tax Authority.

A late return of the annual income tax is subject to a fine ranging from €150 to €3,750.

3.5. NON-HABITUAL RESIDENTS TAX REGIME

Portugal offers non-residents a more favourable tax regime over certain Portuguese and foreign source income without the need to make any investments a special tax regime for non-habitual residents (Residentes Não Habituais - NHR) approved in 2009 and significantly changed in 2024.

Under the 2024 NHR rules, income derived from employment or self-employment in Portugal, within a now more restricted list of "high value-added" activities, is taxed at a flat rate of 20%, compared to the standard progressive rates, which can reach up to 48%.

To qualify for the NHR regime as of 2024, the applicants must:

• work in a profession included in a narrow list of "high value-added" activities, which prioritizes roles critical to economic development (e.g., certain scientific, technological, or academic positions). Applicants must provide documentation proving their professional qualifications and activities align with these categories;
• establish tax residency in Portugal, either residing in Portugal for at least 183 days per year, or maintaining a primary residence in Portugal, defined as a habitual place of residence with the intention of permanent or long-term stay, as recognized under Portuguese tax law; and
• not have been a tax resident in Portugal during the preceding five years before the application.

Once tax residency is established, the individual must formally apply for NHR status through the Portuguese Tax Authority. The application must be submitted by 31 March of the year following the year in which tax residency is acquired. For example, if residency is established in 2025, the application must be filed by 31 March 2026.

The NHR status grants tax benefits for a period of 10 consecutive years, provided the individual maintains tax residency in Portugal throughout this period. Failure to meet residency requirements in any given year may result in the suspension or loss of benefits for that year.

Existing NHR beneficiaries under the 2009 NHR rules who registered before 1 January 2024 will continue to benefit from the reduced income tax rate until the end of the 10-year period initially granted.

4. Buying and renting a home

4.1. MARKET OVERVIEW

According to the National Institute of Statistics (Instituto Nacional de Estatística, INE), Portugal’s statistical authority, the House Price Index recorded a rise of 7.8% in 2024.

The average housing price in Portugal in April of 2024 was estimated to be €2,733 per square metre.

The price per square meter in the metropolitan area of Oporto was, in October of 2024, at €2,789, while prices in the Lisbon area were set even higher, at €4,152.

Lisbon remains one of Western Europe’s more affordable capitals for housing, despite a steady rise in property values.

The average price in central Lisbon ranges between €6,000 and €7,000 per square meter, with prime locations reaching €10,000 sqm. While this figure reflects a premium segment of the market, it is still notably lower than comparable properties in cities like Paris, London, or Amsterdam, making Lisbon an appealing location for real estate investors.

Nationwide, Portugal’s housing market has shown robust growth, fuelled by increased foreign investment and a thriving tourism sector.

Rental opportunities are abundant, with listings available on specialized real estate platforms, in local publications (some in English), and through agencies offering both short and long term leases across the country.

4.2. BUYING A HOME

4.2.1. FORMALITIES

To purchase a home, it is advisable to verify both the legal status and the actual condition of the property. This requires reviewing the documents that identify the property and confirming the legitimacy of the seller.

4.2.2. LAND REGISTRY CERTIFICATE (CERTIDÃO DO REGISTO PREDIAL)

The land registry certificate can be requested either in hard copy or in digital format online. It provides information on the composition of the property, the legitimacy of the seller, and any encumbrances that may affect the property, such as mortgages or collateral.

4.2.3. TITLE CERTIFICATE (CADERNETA PREDIAL)

The property title certificate may be requested from any tax office (repartição de finanças) and contains information about the property's tax situation.

4.2.4. USAGE LICENCE (LICENÇA DE UTILIZAÇÃO)

It certifies the authorised use of the property and may be requested in the City Hall of the district where the property is located.

4.2.5. PROPERTY TECHNICAL DATASHEET (FICHA TÉCNICA DE HABITAÇÃO)

This document contains information about technical and functional features of a property and may be requested in the City Hall of the district where the property is located.

4.2.6. THE PROMISSORY AGREEMENT

The property acquisition procedure usually starts with the execution of a promissory agreement of sale and purchase.

This agreement is not mandatory despite being intended to ensure the conclusion of a Deed of Sale and Purchase.

When the parties sign the promissory agreement, it is customary for the promissory purchaser to pay a down payment to the promissory seller.

For the Promissory Agreement to be effective against third parties, it is necessary to make a provisional registration of the acquisition in the Land Registry Office.

The provisional registration is valid for six months, which may be renewed for an equal period and until one year after the date set by the parties for the execution of the deed of sale and purchase.

The provisional registration has a cost of €250.

4.2.7. THE DEED OF SALE AND PURCHASE

A deed of sale and purchase is the last step of the procedure of acquisition of property. The deed must be executed before a notary and is subject to an expense ranging approximately from €117.65 to €800, depending on the transaction value and the complexity of the operation, for example whether financing is involved or a mortgage is established.

In case a promissory agreement of sale and purchase with real effectiveness has been concluded, the provisional registration becomes definitive at the moment of submission for registration of the deed of sale and purchase.

The conversion of the registry entails a cost of €100.

If no real effectiveness was granted to the promissory agreement of sale and purchase, then the agreement is concluded at the deed. In this case, the amount due is €175.

Alternatively, it is possible to carry out all these formalities through the service "Casa Pronta", at a help desk or through the site www.casapronta.pt.

4.3. PROPERTY TAXES

Buying a property in Portugal requires registration with the Portuguese Tax Authority to obtain a taxpayer identification number. This process involves several taxes and related costs. Typically, the buyer’s costs include Property Transfer Tax (IMT), Stamp Duty, Property and Land Registry Fees, Municipal Property Tax, and legal and notary fees.

4.3.1. TRANSFER TAXES

The transfer of property rights over real estate is subject to Municipal Property Transfer Tax (Imposto Municipal sobre as Transmissões Onerosas de Imóveis – IMT). IMT is levied on the purchase price or property´s taxable value, computed on the higher value.

The IMT rates applicable to residential urban properties are structured on a progressive scale as detailed below:

• up to €104,261: exempt (0%);
• over €104,261 and up to €142,618: 2%, with a deductible amount of €2,085.22.
• over €142,618 and up to €194,458: 5%, with a deductible amount of €6,363.76.
• over €194,458 and up to €324,058: 7%, with a deductible amount of €10,252.92.
• over €324,058 and up to €648,022: 8%, with a deductible amount of €13,493.50.
• over €648,022 and up to €1,128,287: flat rate of 6%; and
• above €1,128,287: flat rate of 7.5%.

If the buyer is a resident in a state, territory, or region considered a tax haven, a fixed rate of 10% applies.

IMT rates include exemptions for young buyers aged 35 or under on their first purchase of a residential urban property up to €316,272. To qualify, buyers must: (i) not be considered dependents for tax purposes in the year they buy—even if they still live with their parents—and (ii) not have owned any residential property at the time of purchase or in the previous three years.

4.3.2. STAMP DUTY

Stamp duty´s taxable base is the same, as for IMT, i.e. is charged on the higher of (i) the tax value of the property or (ii) the purchase price. As general rule, for the acquisition of ownership or other rights on real estate, the rate is 0.8%.

An exemption from Stamp Duty applies to the first acquisition of property intended exclusively for permanent own residence by individuals up to 35 years of age, provided that the same eligibility conditions established for the IMT exemption are met.

4.3.3. MUNICIPAL PROPERTY TAX

Municipal Property Tax (Imposto Municipal sobre Imóveis or IMI) is levied on an annual basis on the value of urban property located in Portugal. For urban properties, the rate is between 0.3% and 0.45% and for properties owned by entities resident in a state, territory or region considered as tax haven, the rate is 7.5%.

High-value residential properties (properties with a total tax value exceeding 600 thousand euros) are subject to the Additional Municipal Property Tax (AIMI). AIMI is levied on the total tax value of residential properties held as of January 1st each year.

For individuals, the first €600,000 of the tax value is partially exempt, with the following rates applied:

• 0.7% on the taxable value (VPT) between €600,001 and €1,000,000;
• 1% on the VPT between €1,000,001 and €2,000,000; and
• 1.5% on the VPT exceeding €2,000,000.

In the case of married couples opting for joint taxation, the exemption threshold increases to €1,200,000.

For companies, the standard rate is 0.4% on the total taxable value of real estate subject to AIMI.

4.4. RENTING A HOME

4.4.1. THE HOUSING MARKET

Portugal’s housing prices continue to rise strongly during improved economic conditions.

Rental properties are advertised on many websites specialising in real estate. In addition, ads can be found in local newspapers or magazines, some in English. Real estate agencies all over the country also offer short and long-term rentals.

Local Lodging, promoted through platforms like Airbnb, has become an increasingly popular trend in Portugal.

Before 2024, Local Lodging operators were subject to an extraordinary contribution (a special tax) that imposed a significant financial burden on hosts. Additionally, municipalities had limited power to control where and how Local Lodging could grow.

In 2024, the legal framework for Local Lodging was revised to address these issues. The extraordinary contribution (special tax) was revoked, and municipalities were given greater decision-making power to better manage Local Lodging locally.

Municipalities can now designate containment areas where new Local Lodging registrations are restricted and set specific conditions and limits for new registrations. Although national restrictions on transferring Local Lodging registrations were lifted, some municipalities may still impose transfer limits on certain registrations.

Furthermore, approval from the condominium owners’ assembly (assembleia de condomíniorityio) is only required for installing hostels within individual units, simplifying regulations for most Local Lodging operations.

4.4.2. LEASE AGREEMENT

Whether long or short-term, a written lease agreement is required in order to rent a property in Portugal.
The parties may stipulate a fixed term for contracts, which will be automatically renewed if none of the parties opposes the renewal of the lease. In the absence of a fixed term provision, the lease agreement will be considered to have a duration of five years.

The amount of the rent can usually be freely agreed upon between the parties, with the exception of low-cost housing.

Rental costs depend on region and particular neighbourhood and may vary according to the number of bedrooms, standards of a property, and the facilities provided.

5. WORKING IN PORTUGAL

5.1. OVERVIEW

The Portuguese labour market, like most other EU markets, remains relatively rigid when compared with benchmark countries.

In 2009, a new Labour Code was approved that simplified labour legislation and paved the way for significant reforms.

The 2009 Labour Code has been subject to changes improving labour standards, particularly as regards the work organisation. Working hours can be changed with a certain degree of flexibility by the employer without increasing labour costs. The Labour Code allows the employer to unilaterally change the workplace (geographical mobility) as well as the functions exercised by the employee (functional mobility).

In April 2023 an amendment to the Labour Code was approved covering a wide number of matters, including, among others, the employment status of digital platforms employees, parental leave, fixed term employment contracts, teleworking, the outsourcing of services and collective bargaining rules.

5.2. THE EMPLOYMENT CONTRACT

Employment contracts in Portugal are subject to the mandatory rules set out in the law on several matters, such as remuneration, working hours, vacation rights or duration of contracts.

The contract duration, working hours, remuneration, leave entitlement, absences, and termination of contracts are the most important matters to be agreed upon by the parties, albeit subject to mandatory rules set out in the Portuguese Labour Code.

In general, employment contracts do not need to be written. The law only requires a written document for some specific types of contracts, such as fixed term contracts, temporary contracts, part-time contracts, secondment contracts and contracts with foreign employees.

The employer has the duty to inform employees of the relevant aspects of the employment relationship, including, among others:

• place of work;
• employee’s job position;
• brief description of employee’s tasks;
• effective date of the employment contract;
• prior termination notice; and
• collective bargaining agreements, if any.

The information on the employee’s identification, place of work, frequency and form of payment and the start of the activity must be provided in writing by the employer and delivered to the employee by the seventh day following the contract execution. The remaining information may be communicated to the employee within one month from the start of the contract execution.

The terms of the employment relationship are also subject to collective bargaining agreements, when applicable, and to the practices between the parties.

Since 1 January 2025, the minimum monthly wage in Portugal is €870. Salaries must be paid on a regular and permanent basis and may be fixed, variable or mixed, including fixed and variable components, which may be linked to productivity, commission based on sales or other objective and determinable factors.

In addition to the monthly salary, employees are entitled to receive a Christmas bonus equal to one month of remuneration payable until 15 December of each year and a holiday bonus equal to one month of remuneration payable before the holiday period.

The maximum regular working period is eight hours per day and 40 hours per week. Employees are entitled to a minimum rest period of eleven consecutive hours between two successive daily work periods, as well as to one day of rest per week.

An additional weekly rest (in all or in certain weeks of the year) may also be given other than the rest day required by law.

Employers and trade unions may agree to increase the work schedule up to 12 hours per day and 60 per week, provided the work schedule is reduced in other periods so that at the end of a reference period up to 12 months, the average working hours is equal to 8 hours per day and 40 hours per week.

Employees are entitled to 22 business days of paid holiday per year. Employees are also entitled to 13 national public holidays. Under the collective bargaining agreements, employers may be obliged to grant two optional public holidays.

5.3. TYPES OF EMPLOYMENT CONTRACTS

The most used types of employment contracts are:

• Open-ended or "permanent" contracts. The general rule is that contracts without a specified term are deemed permanent, which means that the employer may only terminate the contract in the cases allowed by law;
• Fixed term contracts. Term contracts are in force for a pre-established period set according to the employer’s temporary needs, which must be specified in the contract, and expire at the end of the agreed term unless they are renewed. Fixed term contracts cannot be renewed more than three times, have a maximum duration of two years, and are only allowed under specific legal requirements;
• Unfixed term (permanent) contracts. Unfixed term (permanent) contracts do not have a pre-established duration. These contracts expire either upon completion of the employer’s project or when the reason for which the employee was hired no longer exists. Unfixed term contracts may be used only to meet the employer’s temporary needs and may not exceed a maximum duration of four years; and
• Temporary employment contracts. Temporary employment contracts are contracts with temporary work agencies which hire employees to subsequently second them to the user company. Temporary employment contracts may only be used to satisfy the employer’s temporary needs and be renewed up to a maximum of two years.

5.4. PROBATION

Probation periods, during which either party may unilaterally terminate the contract without prior notice and without cause, are allowed.

The length of the probation period depends on the contract in question, with the possibility of reduction by collective bargaining instrument or by written agreement between the parties.
The maximum probation periods are:

• for open-ended contracts, the probation period is as follows: (i) 240 days for employees in management or senior positions; (ii) 180 days for employees in roles requiring technical complexity, a high degree of responsibility, special qualifications, or a higher level of trust and confidence, as well as for first-time jobseekers and long-term unemployed persons; (iii) 90 days for all other employees. For first-time jobseekers and long-term unemployed individuals, the 180-day probation period may be reduced or excluded if they have previously completed a fixed term contract of 90 days or more with a different employer.
• for fixed and unfixed term contracts: (i) 30 days for contracts with a duration equal to or higher than six months and (ii) 15 days for contracts with a duration of less than six months.

The probationary period described above may be reduced or waived, depending on the duration of a previous contract for the same activity. This applies if the employee has previously worked for the same employer under one of the following contracts:

• a fixed-term contract;
• a temporary employment contract for the same position;
• a service contract for the same purpose; or
• a professional internship for the same activity.

The reduction or exclusion of the probationary period depends on whether the length of the previous contract was less than, equal to, or greater than the duration of the current contract, provided that all contracts were concluded with the same employer.

In case of termination of the employment contract during the probation period, employees are not entitled to any compensation unless otherwise agreed in writing by the parties.

5.5. WORKING HOURS

The maximum regular working period is forty hours per week, eight hours per day.

Employees are entitled to a minimum rest period of eleven consecutive hours between two successive daily work periods, as well as to one day of rest per week. An additional half or full day of rest (in all or in certain weeks of the year) may also be given in addition to the rest day required by law.

Insofar as the statutory rules above are not contravened, collective bargaining agreements may provide alternative working time regimes.

Work exceeding the limits above is deemed overtime. Overtime gives the employee the right to additional pay and, in certain circumstances, to an additional rest period. Employees’ overtime is subject to certain limits imposed by the Portuguese Labour Code.

5.6. REMUNERATION

Employees are entitled to a minimum monthly salary set by law each year. Collective bargaining agreements may also determine a minimum remuneration for different jobs and professions, which can never be less than the minimum monthly remuneration set by the Portuguese Government.

The remuneration must be paid on a regular and permanent basis and may be fixed, variable or mixed (comprising fixed and variable components).

In each year, employees are entitled to receive twelve monthly remunerations. In addition, employees are also entitled to receive:

• a Christmas bonus equal to one-month remuneration payable until December 15; and
• a holiday bonus equal to one-month remuneration payable before the holiday period.

The amount of both Christmas and holiday bonuses is proportional to the time of service rendered by the employee in that calendar year (i) in the year of hiring of the employee, (ii) in the year of termination of the contract of employment and (iii) in the event of suspension of the contract of employment, unless the suspension is due and determined by employer’s reasons.

5.7. TELEWORK

5.7.1. DEFINITION AND LEGAL FRAMEWORK

Teleworking refers to the performance of work by an employee under the legal subordination of an employer, conducted at a location not determined by the employer, and facilitated by the use of information and communication technologies.

5.7.2. MANDATORY WRITTEN AGREEMENT

Teleworking agreements must be made in writing. The telework agreement may be incorporated into the initial employment contract or established as a separate document.

The agreement must include the following:

• identification of the parties;
• frequency and method of personal contact;
• working hours;
• the usual place of work for the employee; and
• the employee’s salary, along with any additional or complementary benefits.

Any change to the designated place of work set out in the agreement must also be documented in writing.

5.7.3. COMPENSATION FOR ADDITIONAL

The employment contract or the applicable collective labour regulation must define the compensation owed to the employee for additional expenses incurred due to teleworking. Such expenses must be addressed at the time the teleworking agreement is concluded.

5.7.4. DURATION OF TELEWORKING AGREEMENTS

A teleworking agreement may be established for either open-ended (or "permanent") contracts or fixed term contracts. In fixed term agreements, telework is limited to a maximum of six months automatically renewed for equivalent periods unless either party provides written notice of non-renewal at least 15 days before the expiration date. In open-ended contracts agreements, either party may terminate the telework arrangement by providing 60 days’ written notice. In both cases, either party may terminate the agreement during the first 30 days without prior notice.

5.7.5. RETURN TO IN-PERSON WORK

Upon the conclusion of the agreed teleworking period, whether under an open ended contract or before the expiration of a fixed term contract, the employee must resume in-person work.
This transition does not affect the employee’s category, seniority, or any other rights equivalent to those of in-person employees with similar duties and working hours.

5.7.6. EMPLOYER RESPONSIBILITIES FOR EQUIPMENT AND SYSTEMS

The employer is responsible for providing the necessary equipment and systems required for teleworking. The written agreement must clearly outline whether the employer will directly supply these resources or if the employee is responsible for acquiring them, with subsequent reimbursement.

5.7.7. REIMBURSEMENT OF ADDITIONAL EXPENSES

The employer must fully cover or reimburse all additional expenses incurred by the employee, provided they are demonstrated. These expenses include costs related to acquiring computers or other necessary equipment, as well as increased energy and communication costs, and the maintenance of such equipment and systems.
The method for calculating additional expenses involves a comparison of the employee’s costs in the same month of the previous year, prior to the implementation of the teleworking agreement.

5.8. VACATION AND TIME OFF DAYS

5.8.1. VACATION

Employees are entitled to 22 business days of paid holiday per year. Employees are also entitled to 13 national public holidays: 1 January, Good Friday, Easter Sunday, 25 April (commemorating the 1974 democratic revolution), 1 May (workers' day), Corpus Christi, 10 June (Portugal's national day), 15 August, 5 October (commemorating the Portuguese Republic), 1 November (All-saints), 1 December (Portugal's Independence Day), 8 December (Immaculate Conception) and Christmas day.

Under certain collective bargaining agreements, employers may be obliged to grant two optional public holidays: Carnival/Shrove Tuesday and the local municipal holiday.

5.8.2. TIME OFF FOR ILLNESS OR INJURY

Employees are entitled to take time off from work due to illness or injury set out in the law. Collective bargaining agreements may establish specific rules regarding employees’ time off entitlements granted by the employers.

In case of illness or injury, employees are entitled to receive sick pay from Social Security, calculated based on their reference remuneration under Social Security criteria. This pay typically ranges between 55% and 75% of the employee's remuneration, depending on the duration of the illness or injury. To claim this benefit, employees must submit a specific form along with a statement from a hospital, health centre, or doctor evidencing their condition to Social Security.

Additionally, employees are entitled to time off to care for a sick child or dependent, or to provide support to family members in a hospital located outside their area of residence. In some instances, such absences may result in a loss of remuneration for the employee.

If the absence is unforeseeable, employees must inform their employer as soon as possible. For foreseeable absences, the employee is required to notify the employer at least five days in advance, clearly stating the reasons for the absence.

5.8.3. PARENTAL LEAVE

Employees are entitled to parental leave for a child’s birth, which may be shared between both parents after the birth of the child. The initial parental leave is granted for a period of up to 120 or 150 consecutive days, depending on the parent's choice. A bill for increasing parental leave to 180 or 210 days is now under discussion in Parliament.

The initial parental leave can be increased by 30 days if one of the parents takes exclusively one period of 30 consecutive days or two periods of 15 consecutive days after the mother's compulsory period of six weeks of leave following childbirth.

The following daily values are applied to the amounts of the allowances according to the period of concession:

• for (i) 120 days and (ii) 150 days of shared leave: 100% of reference pay;
• for 180 days of shared leave where each person takes consecutively 30 days or two periods of 15 days: 83% of the reference remuneration;
• for 180 days of leave where the father takes consecutively 60 days or two periods of 30 days, in addition to the father's exclusive period: 90% of the reference pay;
• for 150 days of leave: 80% of the reference pay.

The amount of the allowance cannot be less than €13.58.

In the case of shared parental leave, employees must also inform their employers of the start and end dates of each of their leave periods through a joint written statement up to seven days after the child’s birth.

Notwithstanding the rules above, female employees are always entitled to 72 days of leave, of which a maximum of 30 days are taken optionally before the birth, and 42 days (6 weeks) are mandatory and taken immediately after the birth.

The father must take mandatory parental leave of 28 working days (consecutive or not), of which seven consecutive days immediately after the birth of the child and 21 days in the 42 days following the birth of the child, taken in minimum periods of seven days. Fathers are also entitled to an additional and optional period of seven days (consecutive or not), provided that this leave period is enjoyed at the same time as the mother’s leave period.

Employees are also entitled to leave to travel to a hospital located outside their island of residence to give birth.

After the 120-day leave period, parents can accumulate the remaining period of the initial parental leave with part-time work.

In this case, the remaining period is registered as half-days, and the period of subsidised leave is split, i.e. a period of 30 days is split into 60 half-days.

If the parents choose to share the initial parental leave and each takes exclusively, i.e. not at the same time, a period of 30 consecutive days or two periods of 15 consecutive days after the mother's compulsory six weeks, the period of leave of 120 or 150 days and the respective pay, depending on the option, is increased by 30 days.

5.9. TRANSFER OF BUSINESS

In the event of a transfer of business, all of the employer’s rights and obligations under the employment contracts are automatically transferred to the new employer. During the two years following the transfer, the former employer will remain liable, jointly and severally with the new employer, for all the obligations that became due before the date of the transfer of business. The transfer of an undertaking cannot itself be a reason for the dismissal of employees.

5.10. TERMINATION OF EMPLOYMENT CONTRACTS

The termination of employment contracts can only happen under the terms and conditions set forth in the Labour Code, and dismissals without just cause are prohibited.

Employment contracts may only be terminated in the following cases:

• expiration of term contracts;
• unilateral termination during the probationary period;
• collective dismissal;
• redundancy;
• dismissal for ineptitude; and
• dismissal due to a fact attributable to the employee.

Employers and employees are also free to terminate the employment contract by mutual agreement at any time.

5.11. TERMINATION BY THE EMPLOYEE

The employee can terminate the contract with just cause in the cases specified in the law, in which case she/he will be entitled to receive compensation.
Regardless of the existence of just cause, the employee can terminate the employment contract with prior notice of 30 or 60 days, depending on whether the contract lasted for less than or more than two years, respectively.

5.12. DISMISSAL DUE TO BREACH OF CONTRACT

The employer may dismiss the employee with "just cause", following a disciplinary process, in case of breach of her/his legal or contractual duties, without the obligation to pay any compensation.

The employer may terminate the employment with just cause. The following, among others, constitute just cause for dismissal:

• failure to comply with a manager’s orders;
• infringement of the rights and guarantees of other employees;
• repeatedly provoking conflicts with other employees;
• persistent lack of interest in fulfilling the duties inherent to the position or job;
• providing false justifications for absences;
• unjustified absences (either five consecutive days or ten non-consecutive days); and
• intentional non-compliance with labour rules regarding safety, health, and hygiene.

Dismissal with just cause may only take place after conducting a disciplinary procedure against the employee, which must be initiated within 60 days after the employer becomes aware of the actions that, in her/his view, constitute a breach of the employee’s duties. The proceedings are conducted by a senior person at the company, usually in the human resources department or legal department.

5.13. SEVERANCE PAY

Employees dismissed for reasons other than a breach of contract are entitled to receive a severance pay. The amount of this compensation depends on the type of contract, whether permanent or term (fixed or unfixed), and the date the employment started.

The legal framework for severance pay is outlined in the Portuguese Labour Code, as well as by Law 69/2023 of 30 August 2023, establishing the latter special severance rules, calculation methods, and limits for employment contracts entered into before and after 1 November 2011.

Under the current severance pay rules, employees with longer tenures are entitled to higher severance payments compared to those with shorter tenures. Due to the complexity of the severance pay rules that set variable amounts determined by specific employment dates, contract duration, base salary, and seniority, the exact amount of compensation must be determined on case by case basis.

In general, the severance payment for dismissed employees under permanent employment contracts entered into on or after 1 May 2023, is equal to 14 days of the base salary plus a seniority allowance for each year of service (diuturnidades) with proportional adjustments for incomplete years (calculated in months).

The calculation of the severance compensation is subject to the following limits:

• the amount of the monthly base salary and seniority payments of the employee to be considered for compensation calculation cannot exceed 20 times the minimum monthly wage (now €870,00 in Portugal mainland, and €915,00 and €913,50 in Autonomous regions of Madeira and the Azores respectively); and
• the total compensation amount cannot exceed 12 times the employee’s monthly base salary and seniority payments, or, when the limit referred above is applicable, 240 times the guaranteed minimum monthly salary.

The daily value of the base salary and seniority payments is calculated by dividing the monthly amounts by 30. For fractions of a year of service, the compensation is calculated proportionally.

The severance compensation for the expiry of term employment contracts (not applicable if the employment is terminated by the employee in case of fixed-term contract) or for the termination of a term employment contract based on objective grounds (such as collective dismissal or redundancy) is, as of 1 May 2023, equivalent to 24 days of base salary and seniority pay for each complete year of service. The method for calculating this severance is subject to the rules outlined above.

5.14. UNEMPLOYMENT BENEFITS

The termination of employment contracts by the employer (collective dismissal, redundancy, ineptitude or expiration) entitles the employee to receive unemployment benefits from the Social Security, which do not entail any costs to the employer.

In the event of termination by mutual agreement, the employee may still receive unemployment benefits, at no additional cost to the employer, provided that the following conditions are fulfilled:

• the termination of the employment contract is justified by reasons that would allow the termination under a collective dismissal procedure or dismissal due to job extinction;
• no more than three employees or 25% of the company’s workforce (for companies with up to 250 employees) and no more than 62 employees if the company has more than 250 employees; and
• in companies with more than 250 employees, when 62 employment contracts are terminated, or up to 20% of the workforce, with a maximum limit of 80 employees in each three-year period.

If those requirements are not met, the employer will be obligated to reimburse the Social Security for all the amounts paid to the employee as unemployment benefits, but the employee will not lose the right to the employment benefits that she/he received.

If these requirements are not met, the employer will have to reimburse Social Security for all amounts paid to the employee.

To access unemployment benefits, the employee must:

• reside in Portugal;
• have had the employment terminated;
• be unemployed involuntarily;
• not be employed. Individuals working part-time or as an independent contractors are only entitled to partial unemployment benefits if their earnings are less than the unemployment benefit;
• be registered with the Employment Service; and
• have applied for unemployment benefits within 90 consecutive days from the date of employment termination.

6. Education

6.1. Overview

Over the past decades, the Portuguese educational system has seen significant improvement. Education is universal, free, and compulsory until the age of 18. Parents are obligated to enrol children with a State or private school and the student has the obligation to attend school.

The education system in Portugal comprises public schools managed by the State, autonomous regions, municipalities, and other public entities, as well as private schools operated under a State-issued license.

Schools and educational facilities within the national education system are deemed to be of public interest.

Because the number of foreign nationals has been increasing in recent years, many of whom do not have Portuguese as their mother tongue, most schools have professionals that speak more than one language.

Many Portuguese schools are prepared to educate foreign children of all ages in more than one language.

6.2. EDUCATION LEVELS

The Portuguese school system organised in three levels: pre-school education (ages 3 to 5), primary education (typical ages 6 to 14) and secondary education (ages 15 to 17).

6.2.1. PRE-SCHOOL, PRIMARY AND SECONDARY EDUCATION

Pre-school education covers children from the ages of three to five years. The State is responsible for ensuring a network of pre-school facilities allowing the enrolment of all five-year children and education for such children, free of charge. It is provided by the State, by private and cooperative bodies, by private social solidarity institutions and not-for-profit institutions.

State primary school is universal, compulsory and free of charge in respect to enrolment, attendance and certification fees and costs. It is intended for children aged between six and fifteen.

Secondary education is a cycle of specific studies and includes various courses intended principally to prepare young people to go on to higher education or to enter the labour market.

Access to secondary education requires a prior completion of primary school. It takes three years with a large variety of courses including professional courses. Upon completion and approval, the students are granted a certificate for purposes of access to the university or employment, as the case may be.

6.2.2. HIGHER EDUCATION

At present, higher education in Portugal is divided into two subsystems: university education and non-university higher education (polytechnic education), and it is provided in State and private universities and non-university higher education institutions (both State and private). Access to higher education requires prior completion and approval in secondary school or equivalent.

Universities award first degrees, master’s degrees and doctorates, including Ph.D. Polytechnic institutions award first degrees and master’s degrees.

Students over 23 years, who have not completed secondary school, may also have access to higher education provided they complete and approve specific entry tests.

According to the Times Higher Education World University Rankings of 2025, there are 17 Portuguese Universities ranked in the Top Universities in the world.

In 2025, Portugal strengthens its position in international business education, with five management and business schools featured in the prestigious Financial Times European Business Schools ranking. Among them, Nova School of Business & Economics stands out, ranked 8th globally in the Financial Times Masters in Management ranking, marking the highest position ever achieved by a Portuguese institution in this category. Católica Lisbon School of Business & Economics also maintains strong international recognition, securing the 27th place worldwide in the same ranking

6.2.3. STATE AND PRIVATE SCHOOLS

Portugal has a network of State schools which covers the entire country and serves approximately 1.2 million students.

There are also many private schools in Portugal, spread nationally across all main cities in the country. According to the official data, approximately 341,222 students are enrolled in private schools.

In general, private schools have better facilities than State schools and offer many extra-curricular activities. Private schools tend to top the national education rankings, which measure the students results at the end of second and third learning cycles.

The differences seem to result from the different approach and better resources of private schools, but also from the students social and economic differences. Several State schools also show goods results.

To be admitted to private schools may require passing admission tests and the payment of a tuition. Admission is at the discretion of the school board. There are English-speaking international schools in Portugal, especially in primary and secondary education, which can be found mainly in Lisbon, Oporto and Algarve.

Some schools follow international programmes such as the «International Baccalaureate» programme, the British «GCSE and GCE» examination systems, and the «Council of International Schools» accreditation, which allow students to access several foreign universities without the need for special admission procedures.

Some countries have established schools in Portugal with dual language teaching which follow their national curricula and are also recognised by the Portuguese Government.

France established the «Lycée Français Charles Lepierre» in Lisbon and the «Lycée Français International» in Oporto, Germany has two schools, «Deutsche Schule» in Lisbon and Oporto, and Spain one school in Lisbon, «Instituto Español, Giner de los Ríos». The most well-known School that teaches in

English is the St. Julian’s School, located in Carcavelos, near Lisbon, founded in 1932.

Graduation in these schools gives access to universities in the respective home countries.

Many State and private schools in Portugal offer the opportunity to learn other languages besides English, such as Spanish, German and French.

7. Health

7.1. The Public Health System

Portugal has public health system financed by the State budget, the National Health System (Sistema Nacional de Saúde, SNS).

SNS beneficiaries pay reduced fees (in many cases, much below cost) for consultations, exams, surgeries and other clinical services.

The World Health Report by the World Health Organisation ranked Portugal’s healthcare system in 12th place of its ranking.

There are also public health sub-systems that include several professional sectors which operate independently or under agreements with the SNS.

The main State health subsystem is the health assistance system for the civil servants, named «ADSE»; other examples are the clinics and hospitals of the bank workers («SAMS») trade union and the military personnel health system.

The Portuguese State pays part of the cost of most medicines. Some medicines, as is the case of vital medication for treating serious illnesses, are subsidised in full. The State subsidy is deducted from the price charged to the patient when purchasing the medicine.

EU citizens residing in Portugal and working in another EU country are entitled to health treatment in both countries.

In this case, the individual must obtain an «S1 Form» (certificate of entitlement to health care in another EU country) from the social security of the country where they are registered and deliver it to the

Portuguese local district social security centre of their place of residence. The «S1 Form» gives access to health care in Portugal on the same terms as Portuguese citizens.

The same applies to retirees living in Portugal who receive a pension from an EU country.

Citizens of the European Union countries, as well as of Iceland, Liechtenstein, Norway and Switzerland may obtain treatment in Portuguese SNS hospitals with an European Health Insurance Card (EHIC) (issued in the country of origin).

Overseas citizens holding Portuguese residency permits must be registered at a Health Centre and must hold a «User's Card» (Cartão de Utente), which may be obtained at the Health Centre by presenting a document showing proof of residence authorisation.

Non-EU citizens may have to pay some additional fees for public healthcare in Portugal; the amount will depend on whether there is a reciprocal healthcare agreement between Portugal and the home country.

7.2. PRIVATE HOSPITALS

Portugal has several private hospitals, which have agreements to offer services at reduced rates to holders of health insurance policies as well as beneficiaries of the National Health Service (SNS) and members of other public health subsystems.

According to the Portuguese National Statistical Institute, Portugal has 130 private hospitals, slightly more than half of the 242 hospitals that exist in the country.

In 2024, private hospitals recorded a total of 1.5 million emergency episodes, representing approximately 20% of the total emergency care provided in the country.

In general, private hospitals offer any necessary medical care services and, in some cases, have achieved international recognition for their excellence, like Fundação Champalimaud, which has established a world-leading centre for research and treatment in neuroscience, oncology, and vision care.

In very complex medical specialties, SNS hospitals are usually well equipped and sometimes better than private hospitals, albeit pressed by demand. For instance the Institute of Hygiene and Tropical Medicine, which is part of the SNS, is one of the world’s leading institutes in the field of tropical diseases.

In highly specialized areas of medicine, public hospitals are generally well equipped and, in some cases, surpass private hospitals, despite high demand. For example, the Institute of Hygiene and Tropical Medicine, part of the SNS, is recognised as one of the world’s leading institutes in tropical diseases.

7.3. HEALTH INSURANCE

A significant part of the Portuguese population is covered by private health insurance. Portuguese and international companies offer employees health insurance which usually covers the employee and his/her family.

A substantial portion of the Portuguese population has private health insurance. Both Portuguese and international companies provide health insurance to employees, which typically extends coverage to their families.

Several leading insurers offer health insurance policies in Portugal, including Multicare, Fidelidade, Ocidental, Tranquilidade, and international companies such as Allianz.

Health insurance policies are typically renewed annually, with premiums recalculated each year. The cost of premiums depends on various factors, including the insured's age, pre-existing medical conditions, and overall health risks, as well as the level of coverage.

Certain expenses related to private health insurance may be deducted from taxable income for personal income tax purposes.

7.4. PHARMACIES AND COST OF MEDICINES

The Portuguese State covers part of the cost of most medicines, with some being fully subsidised, particularly those essential for treating certain illnesses. Patients receive partial reimbursement when purchasing prescribed medicines.

Prescription medicines are mainly available in pharmacies. Some non-prescription medicines, such as painkillers or vitamins, may also be sold in commercial outlets like supermarkets or convenience stores, provided they are properly supervised by qualified staff. These establishments are marked by a green cross on a white background.

7.5. EMERGENCIES

In case of a medical emergency, dial 112, the EU-wide emergency number. This number is free to call and can be reached from any mobile phone, even without a SIM card. For general medical advice in Portugal, you can contact the Saúde 24 (Health Line 24) call centre at 808 24 24 24. This service is also free of charge.