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D8 Digital Nomad Visa
Why Madeira Island?
With reduced taxation, adequate infrastructures, competitive operational costs, safety and quality of life, Madeira is positioned to provide digital nomads with a unique package of benefits, offering a wide range of solutions to their specific needs.
Being speedy a internet a must in a digital nomad way of life, Madeira benefits from a Submarine Cable Station, hosted in the “Madeira Datacenter”, operating several international optical submarine cables, allowing interconnectivity with national and international SDH networks and providing, as such, significant advantages in terms of quality, cost, bandwidth and scalability.
Another available infrastructure is the Internet Gateway provided by Marconi Internet Direct (MID). This MID offers international Internet access without any kind of contention and using diversity in the access to international backbones.
Last, but certainly, not least he IP platform has its international connectivity distributed by: 3 PoPs (London, Amsterdam and Paris), peering connections with hundreds of major international ISPs and IP transits to Europe and the USA.
All the above infrastructures combined with an easy going island life, makes Madeira a unique destination, within Europe, to relocate as a digital nomad.
Why?
Digital Nomads
Learn more about benefits and requeriments of a digital nomad in Madeira, Portugal.
Are there any immigration requirements?
EU-Citizens, EEA Citizens and Swiss Citizens
EU citizens living in Madeira (or in any Portuguese territory) for longer than three months have to formalize their right of residence by registering.
After three months in Madeira (or in any Portuguese territory), EU citizens have 30 days to register, after which they receive a registration certificate.
Failure to register is an offence punishable by a fine of between EUR 400 and 1500.
Registering or remaining registered without meeting the necessary conditions is punishable by a fine of between EUR 500 and 2500.
In the event of an abuse of the law, fraud, or false marriage or partnership of convenience, residence rights will be refused and withdrawn.
Digital Nomad Visa
If you are a third-country national, kindly note that you are not entitled to perform any job for a Portuguese entity without a visa. Furthermore, before your relocation, be sure to have a proper entry visa if you plan to stay longer than the visa-free period.
Portugal has implemented the Digital Nomad Visa for which you may apply. Alternatively, you may apply for a passive income visa (D7) or the golden visa. It is also important to note that different visas have different minimum stay requirements.
Prior to your relocation, be sure to understand what type of visa is more appropriate to your specific situation and engage a Bar certified lawyer to guide you through this process.
What are the tax implications of short-term relocations?
Generally speaking, those digital nomads residing up to 183 days in a given year in Madeira are not considered residents, for taxation purposes, and therefore not subject to personal income tax on their worldwide income.
Notwithstanding the above, should you have a real estate property (either rented or purchases) that you can occupy in 183 days in a given year or should you engage Portuguese entities as a free-lancer during that time period then personal income tax implications could arise. Under these circumstances be sure to engage a tax consultant in order to avoid any unpleasant surprises.
If you are considering a longer stay, either as a free-lancer or an employee, there are tax benefits for expats wishing to effectively relocate to Madeira, namely those foreseen under the IFICI regime.
What are the tax implications of long-term relocations?
Personal Income Tax
Digital nomads wishing to relocate for an extensive period, more than 183 days, may be liable to Portuguese personal income tax on their worldwide income. Having that said exploring take the IFICI route may be an option that one should consider.
Generally speaking, under the IFICI scheme foreign sourced income is exempt from personal income tax in Portugal, provided some requirements are met under the scheme’s rules. In addition, Portuguese sourced income may be subject to a flat tax of 20% if the activity carried our by the digital nomad is deemed as a high-added value activity.
Personal Income Tax as a Freelancer
Income from a commercial, industrial, or agricultural activity and income from a sole trader (including scientific, artistic, or technical services) or from intellectual rights (when earned by the original owner) may be taxed either in accordance with a simplified regime or based on the taxpayer’s organized accounts.
The simplified regime will apply only to taxpayers who, not having opted for organized accounts, have a turnover or a gross business and professional income lower than EUR 200,000 in the previous year. Under this simplified regime, the above income is taxed on 75% of income arising from business and professional services listed in the table referred to in Article 151 of the PIT Code. As an incentive for taxpayers joining the simplified regime, the coefficient of 75% is reduced by 50% and 25%, in the tax period of the beginning of activity and in the following one. The applicable personal income tax rate might be progressive (up to 48%, or up to 33,6% in Madeira) or flat at 20% (under IFICI scheme conditions).
The income ‘deduction’ arising from the application of the coefficient of 75% is partially conditioned by the verification of expenses and charges effectively incurred and related to the activity.
Therefore, to the taxable income determined by applying the coefficients will be added the positive difference between 15% of the gross income and the sum of the following amounts (aproximatly EUR 27.000):
- EUR 4,104 or, when higher, the total amount of mandatory social security contributions (in the part not exceeding 10% of the gross income received).
- Staff expenses, wages, or salaries communicated to the Portuguese tax authorities.
- Property rentals allocated to the professional activity communicated through the issue of an electronic receipt or a specific statement, whose invoices and other documents are communicated to the Portuguese tax authorities (if only partially assigned to the professional activity, it is considered only 25% of the total amount).
- 1.5% of the tax registration value of the properties assigned to the business or professional activity or 4% of the tax registration value of properties assigned to hotel or letting activities (if only partially assigned to the professional activity, it is considered only 25% of the total amount).
- Other expenses with the acquisition of goods and services related to the activity, duly communicated to Portuguese tax authorities, namely expenses with current consumption materials, electricity, water, transports and communications, rents, litigation, insurance, leasing rents, mandatory fees paid to professional associations and other organizations representing professional activities to which the taxpayer belongs, travels and stays of the taxpayer and one’s employees (if only partially assigned to the activity, it is considered only 25% of the total amount).
- Imports and intra-Community acquisitions of goods and services related to the activity.
In addition to the amount of the above deduction, the amount of mandatory social security contributions paid, exceeding 10% of gross income and related to such professional activities, may also be deducted to the self-employment income if not deducted for other purposes.
The contributions rate applicable to self-employees corresponds to 21.4%. The monthly contribution basis for self-employees corresponds to 1/3 of the relevant remuneration determined in each reporting period and produces effects in that month and in the following two months. For the determination of the relevant remuneration of the self-employee, it is considered the income received in the three months previously to the reporting month. The relevant remuneration corresponds to 70% of the amount of services rendered. The contribution base considered for each month has a maximum limit of 12 times the value of the Social Support Index.
As a freelancer or self-employed person, it is important to note that you will be exempt from making Social Security payments for the first 12 months from the start of your activity. Social security contributions must be paid between the 10th and the 20th of the month following the month to which they refer.
VAT in Portugal is payable by all businesses with a turnover in excess of €15.000 on taxable services.
VAT is payable to the Portuguese Tax Authority seven days after the reporting deadline periods, either quarterly or monthly.
Cryptocurrencies
Income derived from buying and selling crypto is taxable in Portugal, therefore your income structures should be in line the current rules of the IFICI regime for said crypto income to be exempt from personal income taxation. Tax advice on this matter should be sought after prior to any conversion to crypto to fiat currency as Portuguese tax resident.
Corporate Income Tax
The corporate tax rate applicable to companies in Portugal may vary, depending on which part of the Portuguese territory said companies are incorporated and domiciled. From the get go, the Madeira is the Portuguese territory with the highest tax efficiency for companies.
| Type of entity incorporated | MIBC* | Autonomous Region of Madeira | Portuguese mainland |
| Resident entities and permanent establishments of non-resident entities | 5% | 13,3% | 19% |
| Resident entities characterized as a small or medium enterprises, on the first € 25 000 of taxable profit | 11,2% | 15% |
* Incorporation of entities within the MIBC – Madeira International Business Center allows for a 5% tax rate is only applicable on taxable profit deriving from non-resident entities (otherwise the normal rates apply) along with additional tax benefits for shareholders. For more detailed information, please click here.
VAT
| Type of rates | Autonomous Region of Madeira | Portuguese mainland |
| Normal rate (most goods and services) | 22% | 23% |
| Intermediate Rate (F&B services) | 12% | 13% |
| Reduced Rate (food and essential goods) | 5% | 6% |
Help
Frequently asked questions about D8 Visa or Digital Nomad Visa in Portugal
How good is the internet infrastructure in Madeira for remote work?
Madeira is served by a Submarine Cable Station hosted in the Madeira Datacenter, which operates several international optical submarine cables and allows interconnectivity with national and international SDH networks. An Internet Gateway provided by Marconi Internet Direct offers international access without contention, using diversity in the access to international backbones. The IP platform’s international connectivity runs through three PoPs, in London, Amsterdam and Paris, with peering connections to hundreds of major international ISPs and IP transits to Europe and the USA.
Do EU citizens need a visa to live and work remotely from Madeira?
No. EU, EEA and Swiss citizens may enter and reside in Portugal without a visa. If they intend to stay for more than three months, they must register their residence with the municipality of their place of residence within 30 days after the end of their first three months in Portugal. They will then receive a registration certificate. Failure to comply with the registration obligation is an administrative offence punishable by a fine of €400 to €1,500; in cases of negligence, the statutory range is reduced by half.
The immigration position is separate from any tax, social-security, employment-law or professional-registration obligations that may arise from working remotely from Madeira.
What visa do I need as a non-EU digital nomad?
Portugal offers a specific visa route for third-country nationals who work remotely for individuals or companies based outside Portugal. Depending on the intended length of stay, applicants may apply for either a residence visa for remote work — commonly referred to as the Digital Nomad or D8 visa — or a temporary-stay visa for remote work. Applicants must demonstrate their employment or service relationship with an entity outside Portugal and meet the applicable income and documentation requirements.
The D7 is generally intended for applicants who can support themselves through passive income or other independent means. It should not be treated as a general substitute for a remote-work visa where the applicant intends to continue working while resident in Portugal. The golden visa is an investment-based residence route and is not a general remote-work visa; moreover, several former investment options, including real-estate-based routes, are no longer available for new applications.
A third-country national must hold an appropriate visa or residence authorisation before carrying out work in Portugal. Visa-exempt nationals may enter for a short stay, usually up to 90 days in any 180-day period, but that does not by itself authorise relocation, long-term residence or work in Portugal. A person intending to relocate should therefore obtain the appropriate residence visa or other work-authorising status before moving.
Will I pay Portuguese tax if I stay in Madeira for less than 183 days?
Not necessarily. Staying in Portugal for 183 days or fewer does not, by itself, guarantee that you will be treated as a non-resident for Portuguese tax purposes. You may still be regarded as a Portuguese tax resident if, during the relevant period, you have a dwelling in Portugal in circumstances indicating a current intention to maintain and occupy it as your habitual residence.
If you are genuinely non-resident, Portuguese personal income tax generally applies only to Portuguese-source income, rather than to your worldwide income. However, income from services performed in Portugal or otherwise treated as Portuguese-source, including services provided to Portuguese entities, may still be taxable in Portugal, subject to any applicable tax treaty.
Merely owning or renting a property is not automatically sufficient to establish tax residence; the relevant facts and your intention regarding its habitual occupation must be assessed. Individual tax advice should be obtained for the specific circumstances.
How am I taxed if I stay in Madeira for more than 183 days?
Staying in Madeira for more than 183 days may make you a Portuguese tax resident. If you are resident in Portugal, Portuguese personal income tax generally applies to your worldwide income, subject to any applicable tax treaty and the rules for eliminating international double taxation.
The IFICI regime may be worth considering, but it does not provide a general exemption for foreign-source income. Subject to the relevant eligibility requirements, it may provide a 20% special tax rate on qualifying category A and B income derived from activities, professions or positions covered by the regime, generally for up to ten consecutive years.
Eligibility depends on several conditions, including not having been tax resident in Portugal during the previous five years, carrying out an eligible activity or holding an eligible position, satisfying any requirements applicable to the employer or entity involved, and completing the relevant registration procedures. Madeira-specific eligibility may also depend on regional legislation. The treatment of foreign-source income must be assessed separately under the applicable Portuguese rules and tax treaty.
How are freelancers taxed in Madeira?
Self-employed individuals may generally be taxed under Portugal’s simplified regime or under the organised-accounting regime. The applicable regime depends on the statutory income thresholds, any election made by the taxpayer and the relevant tax year.
Under the simplified regime, income from professional activities specifically listed in the relevant table is generally calculated by applying a 75% coefficient to gross professional income. The coefficient may be reduced by 50% in the first tax period in which the activity begins and by 25% in the following tax period, subject to statutory conditions, including restrictions where the taxpayer also receives employment or pension income.
The resulting taxable income is then subject to the applicable progressive IRS rates. Taxpayers who are tax residents in Madeira are subject to the Madeira regional IRS table, whose maximum marginal rate has been set at 33.6% in the relevant regional legislation, subject to confirmation of the table applicable in the relevant tax year.
A flat 20% rate may be available under the IFICI regime, but it is not generally available to freelancers. It applies only to qualifying Category B income and where all the statutory requirements of the regime are satisfied.
Do I have to pay social security as a freelancer in Portugal?
Generally, yes, if you are subject to the Portuguese independent-worker regime. The standard contribution rate is 21.4%.
For a first-time registration, the mandatory obligation generally starts on the first day of the 12th month following the month in which the activity began. However, early enrolment may be requested, and different rules may apply when an activity is restarted.
Under the quarterly-declaration regime, relevant income is generally 70% of income from services. The monthly contribution base is one third of the relevant income declared for the preceding quarter and applies for the following three months, subject to a maximum of 12 times the IAS. Contributions are paid monthly between the 10th and 20th of the following month.
Different rules may apply to individuals using organised accounting, combining self-employment with employment, or benefiting from another statutory exemption.
Do I need to charge VAT as a freelancer in Madeira?
Not necessarily. If you are established in Portugal and meet the conditions for the small-business exemption under Article 53 of the Portuguese VAT Code, including the applicable €15,000 annual domestic turnover threshold, you may issue invoices without charging VAT. In that case, you generally cannot deduct VAT incurred on your expenses.
If the exemption does not apply, VAT must be charged at the rate applicable to the relevant transaction and its place of supply. For transactions located in Madeira, the standard rate is 22%, compared with 23% on mainland Portugal. A 12% intermediate rate and a 4% reduced rate may apply to specific goods and services, but not generally to all food, beverages or essential goods.
VAT returns and payments must be made within the applicable statutory deadlines for the monthly or quarterly regime. VAT is not generally payable seven days after the filing deadline.
Is cryptocurrency income taxed in Portugal?
Crypto-related income may be taxable in Portugal, but the treatment depends on the nature of the income. Gains derived from the disposal of cryptoassets held as a personal investment are generally treated as Category G capital gains, unless the activity qualifies as a business or professional activity or the income is treated as capital income.
Gains from the disposal of cryptoassets held for at least 365 days may be excluded from Portuguese personal income tax, subject to the statutory conditions, including the applicable EU/EEA or tax-information-exchange requirement. A crypto-to-crypto exchange is generally not taxed at that stage, whereas a conversion into fiat currency may constitute the relevant realization event, depending on the facts.
Mining, validation, staking and other remuneration, as well as cryptoassets received in exchange for services, may be taxed under Categories B or E instead. The IFICI regime should not be described as a general exemption for cryptoasset gains. Its interaction with crypto-related income must be assessed on a case-by-case basis. Professional tax advice should be obtained before disposing of or converting cryptoassets into fiat currency while Portuguese tax resident.
What corporate tax would I pay if I set up a company in Madeira?
Corporate tax in Portugal depends on the applicable tax year, the company’s registered office and effective management, the location and substance of any permanent establishment, and whether a special regional or licensing regime applies. The general Madeira IRC rate is lower than the rate on the Portuguese mainland for taxpayers with a registered office, effective management or qualifying permanent establishment in Madeira. This rate is not necessarily the company’s total tax burden, as additional surcharges may apply.
Companies licensed to operate under the Madeira International Business Centre may qualify for a 5% IRC rate, but only if they carry out qualifying activities and satisfy the applicable licensing, employment, investment, annual cap and other statutory requirements. The 5% rate is therefore not automatic and should not be described as applying solely to profits derived from non-resident entities.
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