Independent contracting in Portugal isn’t straightforward. You’ve got immigration issues, tax difficulties, and mountains of complex admin work. Even worse, missteps can cost you serious money, or even land you in legal trouble.
Before you consider taking a contract in Portugal, you should be aware of what you’re getting into – and how you can make it simpler.
Difficulties of contracting in Portugal
Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for Portugal.
If you’re working independently, it can be difficult to find clients willing to sponsor you. Moreover, even if your client can do this, you’ll need a new sponsor each time you decide to take on a new contract. Of course, every new sponsor will mean more paperwork.
Also, are you deeply familiar with the intricacies of the tax system in Portugal, as well as your own country’s laws on overseas earnings? If so, good on you!
However, if you’re like the rest of us, figuring out (much less reducing) your tax liability in Portugal and your home country can seem like full-time work in itself.
How Umbrella Companies in Portugal work
Most freelance workers aren’t mystical superheroes who successfully tackle these issues all on their own. There are companies who specialise in helping workers make the most out of their contracts.
They’re called Umbrella Companies(or, contractor management companies).
How do they work?
Basically, an Umbrella Company acts as your full-time employer, even though you maintain your independence as a contractor. They collect and filter payments from your clients, filtering out the necessary social security and fees. You send them your timesheets, and they send you payments.
Because they act as your “employer,’ they can sponsor you and provide a single work permit for multiple contracts.
Even better, most are experts in Portugal and expat tax law, meaning they’ll also help you optimise your earnings.
Although the Umbrella Company is technically your “employer,” you’re essentially freeing yourself to work even more independently. You still dictate your contracts, your hours, your schedule. The Umbrella Company simply filters out the time-consuming admin and immigration issues, allowing you to focus on your new contract.
How we help with Umbrella Companies in Portugal
There’s a huge variety of Umbrella Companies out there; they all have different specialties and advantages. How do you find the right one for your circumstances?
We work closely with Umbrella Companies all throughout Portugal and match contractors with the right company for them. If you’ve already secured a contract in Portugal, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).