Remote work from Portugal: how to secure an international contract

Securing an international contract is more complex than you think: local labor laws, taxes, access to benefits, support and more.

Unlocking tech talent stories

February 7, 2023

The rise of remote work has led to an increase in cross-border remote work by developers in Portugal, as they’re able to work for foreign companies from here. Remote work has made it possible for a developer to get an international contract with a company located anywhere in the world, as long as they have a stable internet connection. 

This has opened up new opportunities for developers to work for companies that may not have a presence in Portugal and to access a wider range of projects and clients.

Cross-border remote work has also had a significant impact on the global economy, as it allows companies to tap into a wider pool of talent and access the expertise of developers from around the world, with talent from Portugal being no exception. Foreign companies are now able to hire the best developers for their projects—as yourself—even if they’re located in Portugal. 

As a result, cross-border remote work has become a popular option for companies looking to build and grow their teams in Portugal, and for developers from Portugal looking to expand their professional opportunities and work with companies from around the world.

How to guarantee your international contract with a foreign company  

As exciting as it is for developers in Portugal, cross-border remote work also presents a number of challenges and complexities that can make getting an international contract harder, including compliance with local labor laws and taxes, as well as access to benefits and support. 

These challenges can be particularly pronounced for independent contractors and freelancers, who may not have the same protections and benefits as employees, and for those in Portugal who want to sign an international contract with an overseas company to work remotely. 

boy working on computer

Sometimes companies are prepared: they handle everything in-house and are ready to hire international remote employees, as well as freelancers and contractors, making it easy to sign that international contract. 

Other times, you’ll have to put in a little effort to help secure the best situation for yourself as an employee (or potential employee), guaranteeing your international contract is covering all the bases and you are not at a disadvantage. 

By working with an Employer of Record, developers can mitigate these risks and gain access to the benefits and protections they need to work for foreign companies remotely from Portugal. But let’s look closer at why you might need to worry about this.

Why you should look for an Employer of Record

Developers in Portugal who want to work remotely for a company overseas and secure an international contract may benefit from using an Employer of Record for the following reasons:

  • Compliance with local labor laws: an Employer of Record can help ensure that the developer is in compliance with local labor laws, taxes, and immigration requirements in the country where the company is based.
  • Streamlined HR processes: an Employer of Record can handle HR processes such as payroll, benefits, and tax withholding, making it easier for the developer to focus on their work.
  • Access to benefits: an Employer of Record can provide the developer with access to benefits such as health insurance, paid time off, and retirement benefits, which they may not have been able to obtain otherwise.
  • Reduced administrative burdens: an Employer of Record can take on the administrative responsibilities of being the official employer, freeing up the developer to focus on their work.
  • Legal protection: an Employer of Record can provide the developer with legal protection and support in the event of disputes or other employment-related issues.
  • Lack of stability: independent contractors and freelancers may not have the stability and security of a traditional employment relationship, which can make it difficult to plan for the future.

By working with an Employer of Record, developers in Portugal who want to work remotely for a company overseas and sign an international contract can mitigate some of the risks and complexities associated with this trending work system, while still enjoying the benefits and flexibility of remote work.

How an Employer of Record works

An Employer of Record (EOR) is a third-party company that acts as the employer for a worker, typically an independent contractor or freelancer, who is hired by a client company to perform work. The EOR assumes the legal responsibilities and obligations of the employer, including tax compliance, benefits administration, and the management of legal and compliance issues. This allows the worker to focus on the work itself, without having to worry about the administrative and legal aspects of their employment.

The EOR provides a range of services to both the developer and the client company. For the developer, the EOR acts as the employer, taking care of payroll, taxes, and other compliance issues. The developer is considered an employee of the EOR, which means they are eligible for benefits such as health insurance, paid time off, and retirement benefits. The EOR also provides support and guidance to the developer, helping them navigate the complexities of cross-border remote work.

Remote work from Portugal for foreigners

If you’re not Portuguese and want to relocate to Portugal for good and work remotely from here, we have good news. The country has recently announced the launch of a new visa for digital nomads.

Launched on October 30th, the official designation for this new digital nomad visa for Portugal is actually a “residence visa for the exercise of professional activity provided remotely outside the national territory”.

This new visa allows remote workers to live and work in Portugal for up to 12 months. We have a whole blog post about this new digital nomad visa if you want to know all the details. 

Remote work taxes

coins with tax written on top

The topic of nightmares for many, remote work taxes is a topic not to take lightly. If you’re a foreign developer in Portugal, there are many things to take into account and the consequences for not paying them are severe, such as double taxation, fines and late fees, and even getting a criminal record. That’s one of the reasons why having an Employer of Record can make your life easier as an employee.

To sum up

If you’re a developer who wants to work remotely from Portugal for companies overseas, then getting in touch with an Employer of Record provider might be the best solution for you. You’ll be able to focus on your work, while the EOR takes care of the legal and administrative aspects of your employment.

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