If you’re planning to move to Portugal, the very first thing you need to get as a digital nomad is your Portuguese NIF. Freelancers and remote workers moving to Portugal need the NIF for everything, from opening an account at a bank to signing a lease. This article will tell you everything you should know about getting a Portuguese NIF and how it will fit into your journey as a digital nomad.
What is a NIF ?
The NIF is simply a tax identification number in Portugal. It is a unique number given to each individual to pay taxes and for all financial dealings. This number does not apply to taxation purposes alone. Instead, it also serves as an entrance to a number of administrative and legal procedures. For instance, signing contracts, receiving salaries, or accessing public services.
Setting up a NIF is a basic requirement for digital nomads moving to Portugal. In its absence, one cannot even think about opening a bank account. You cannot rent a property or subscribe to utilities such as electricity and the internet.
Why is the NIF important for Digital Nomads ?
Getting a NIF is the initial step towards acquiring legal residency in Portugal, especially when you’ve spent six months. It is an essential number for both short-term and long-term residents. You’ll need it to perform day-to-day tasks such as signing up with a mobile phone provider or accessing health services.
More importantly, for digital nomads working remotely for clients or employers abroad. The requirements also cover getting the NIF if one intends to pay taxes in Portugal. You might be regarded as a tax resident if your stay exceeds 183 days within a calendar year.
Apart from that, you will use it for income declaration and to tap into all the benefits for foreigners. You will benefit from the Non-Habitual Resident program, which provides advantages on foreign income and reduced rates.
Steps to Obtain a NIF in Portugal
Here’s a guide to help you through the entire process.
Decide whether to apply in person or online
You can do this in person by going to a local tax office or through a legal representative online. If you’re already in Portugal, it’s pretty easy to go to the tax office. However, many digital nomads hire a lawyer or some service provider to apply on their behalf remotely.
Required Documents
Whether you’re applying physically or online, you will require a passport or ID card and proof of address. It can be from your hometown if you still don’t have an address in Portugal.
Also, you’ll need a Portuguese legal representative if you are not an EU citizen. The attorney will be your contact locally.
Submit Your Application
If you are in Portugal, just go down to your local tax office with the documents. However, if you’re applying remotely, your legal representative will submit the documents on your behalf. You will receive your NIF immediately after it is approved. You will get it on the spot or via email as soon as you have applied online.
Fees and Timeline
There is usually some small fee when obtaining an NIF, which varies. It depends on whether it is directly submitted or through a service. It is a pretty quick process as long as all the documentation is in order. It will usually take one to two days to get it.
As you can see, the process is seamless. Learm more about the nif in Portugal here.
NIF and the Digital Nomad Visa
If you are planning on staying in Portugal for the long term, you will probably want to get a digital nomad visa or apply for a D7 visa. The D7 is a popular visa among remote workers and retirees looking for residency in Portugal. It enables them to prove that they have a stable income coming from outside of Portugal. You will need an NIF in order to apply for this visa to show your residency in regard to tax compliance and financial stability.
The income needed to sustain a digital nomad visa is €3,040 per month. So, you will have to show proof of savings for one year of income at this stage. You will be asked for your NIF at that stage because it’ll need to link your financial documents with the Portuguese Taxation system.
Taxation for Digital Nomads in Portugal
Depending on the duration of your stay, the status of a digital nomad in Portugal has different implications in terms of taxation. You would become a tax resident, declaring your worldwide income if you stay above 183 days within a year.
However, the NHR program in Portugal has amazing benefits regarding tax. You pay a flat rate of 20% on income earned in Portugal, and in some cases, foreign-sourced income could be totally exempt.
Once you have your NIF registration, be sure you follow all the rules about taxes. You will be required to file annually. Also, the government will use your NIF number to monitor your financial activities in the country.
Final thoughts
A NIF opens the doors to Portugal for a digital nomad. It is a requisite for both legal and practical reasons. The process in itself is relatively simple, but it is really important to understand the documentation required. It is important you know how the NIF fits into the wider context of tax residency and visa applications. Getting your NIF early on gets you closer to living the life of a digital nomad in Portugal, which is very cultural, affordable, and tax-friendly.
If you are going to move to Portugal, apply for your NIF and see what kind of residency fits you best as a digital nomad. Other procedures can be done easily once you get the NIF number.
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