Labour System

In recent years, Portuguese employment law has undergone many changes and adjustments. Thus, after more than 30 years of legislative reforms, the Portuguese labour system is now more flexible, particularly in terms of organizing working time.

 

In terms of regulations, the main law is the Labour Code, which was revised in 2009 (Law No. 7/2009 of February 12), 2011 (Law N. 53/2011 of October 13), 2012 (Law No. 23/2012 of June 25), 2013 (Law No. 69/2013 of August 30), 2014 (Law No. 27/2014 of May 8 and Law No. 55/2014 of August 25), 2015 (Law No. 28/2015 of April 14 and Law No. 120/2015 of September 1 ), 2016 (Law No. 8/2016 of April 1), 2019 (Law No. 93/2019, of September 4), 2021 (Law no. 18/2021, of April 8 and Law no. 83/2021, December 06) and 2022 (Law no. 1/2022, January 3).

 

Law no. 1/2022, January 3, amended the regime of justified absences from work. Thus, from January 4, 2022 onwards, employees may be absent from work for up to 20 consecutive days after the passing of their children, stepchildren, godsons (in the framework of a civil custody relation), sons-in-law and daughters-in-law.

 

Moreover, in case of death of an employee’s descendant or similar in first degree in the direct line or close family member, namely spouses or ascendant, employees are now entitled to receive psychological counselling in a National Health System establishment.

 

On another hand, law no. 83/2021, December 5, which entered into force on January 1, 2022, altered the Labour Code and the Accidents at Work and Occupational Diseases Regime regarding the teleworking regime and the right to disconnect.

 

With the changes set forth by this law, teleworking is now considered to be any work performed under legal subordination, in a place not determined by the company, and through the use of information and communication technologies, regardless of whether the work is performed in a fully remote basis or in a hybrid scheme. The duties that can be performed remotely and the conditions under which the company may accept the telework regime can be determined in the company’s internal rules of procedure.

 

If an employee (whose duties are compatible with remote working and when there are available resources to that effect) requests to start working remotely, the employer’s refusal must be delivered in writing and must contain the reasons for the refusal.

 

The period of duration of the teleworking agreement was also altered. As of January 1, 2021, the agreement can have a fixed-term of up to 6 months, automatically renewed for equal periods if none of the parties declare their opposition to the renewal, or a permanent duration, in which case either party can terminate it, by written notice given 60 days in advance.

 

The agreement shall establish the place from which the employee will usually carry out their work, which will be considered, for all legal purposes, as their workplace, and which can only be altered through a new written agreement between the parties.

 

On another hand, the array of employees entitled to render their work through telework when their duties are compatibles with said scheme, was extended to encompass more than victims of domestic violence and employees with children of up to 3 years.

 

Henceforth, non-main informal caregivers are now entitled to render their duties in telework. In companies who employ 10 persons or more, employee with children over 3 and up to 8 years old are also entitled to this scheme in the following situations: (i) when both parents meet the conditions for teleworking and provided it is performed by both in successive periods of equal duration within a maximum reference period of 12 months; (ii) in single-parent households, and (iii) in situations where only one of the parents can prove that they meet the conditions for teleworking.

 

The employer is responsible for providing the employee with the equipment and systems necessary for carrying out the work and with the necessary training for their use, but the employee may acquire said instruments directly, pending the employer’s approval. Regardless of the ownership of the equipment, the employer is always responsible for correcting any faults that may arise.

 

The employer is obligated to compensate, in full, the additional expenses that the employee has proved to have borne with the acquisition or use of the equipment. This compensation is considered a cost for the employer for tax purposes.

 

The employer is also obligated to respect the privacy, working hours and rest time of the employee and their family, as well as provide adequate physical and psychological working conditions. The capture and use of images, sound, writing, history, or other means of control that may affect an employee’s right to privacy are prohibited.

 

When teleworking is carried out at the employee’s home, the visit to this place can only have the purpose of controlling the work activity and the work instruments and must be requested with a prior notice period of at least 24 hours, with the agreement and in the presence of the employee.

 

Regarding organization, direction and work control, any remote work meetings must take place within working hours and preferably be scheduled in the working and preferably 24 hours in advance. Employees must be present at the company’s premises or other designated locations when summoned at least 24 hours in advance. The employer now bears the costs of these journeys if they exceed the normal cost of transport between the employee’s home and the place where they would carry out face-to-face work.

 

Finally, this law also established new rules for Health and Safety Protection in the Work Place. Thus, the practice of teleworking in activities involving the use or contact with hazardous substances and materials is forbidden unless it is carried out in facilities certified for this purpose. In a similar fashion, the employer is obliged to comply with minimum health and safety requirements regarding work and equipment with screen display. The employee is obliged to give access to the workplace where they work to the professional designated by the employer.

 

On another hand, Law no. 18/2021, of April 8, amended the Transfer of Undertaking legal framework. With this amendment, it is now stressed out that the transfer of undertaking (or part of undertaking that constitutes an economic unity) regime is applicable in case of tender procedures to execute service proving contracts.

 

The service providing contracts that constitute a transfer of undertaking (or part of undertaking) may come as a result of public tender procedure or through any other procedure to select and execute service providing contracts, in public or private sectors, namely surveillance, food, cleaning or transport services.

 

According to Portuguese law, both employer and employee representatives may request the participation of representatives of the Portuguese Labor Ministry (DGERT) in the negotiation meetings to be held between the parties.

 

With the entry into force of Law no. 47/2021, of September 3^, the “supervision” period of the collective bargaining agreements (in other words, the period during which the collective bargaining agreement is still in force after one of the parties withdrawals from it) was suspended for 24 months. Thus both “supervision” periods that started before March 10, 2021, and “supervision” periods that started after that date are suspended until March 10, 2023.

 

Finally, with the amendment to Law no. 29/2017, of May 30, carried out by Decree-Law no. 101/2020, of December 7, the rules regarding the posting of employees in the framework of a provision of services in Portuguese territory and to the posting of employees to another Member-State by service providers established in Portugal was altered.

 

With the entry into force of this Decree-Law, the legal protection of posted employees are increase, considering all that is set forth in the law and collective bargaining agreements which have been declared universally applicable, namely regarding the conditions of employee’s accommodation when provided by the employer and allowances of reimbursement of expenditure to cover travel, board and lodging expenses for employees away from home.

 

On another hand, to employees posted by temporary employment agencies is now also applicable the same conditions applicable to the employees posted by temporary employment agencies established in Portugal. The user company is now obliged to inform the temporary agency of the applicable working conditions. If the user posts the temporary employee to another Member-State, it shall also be required to inform the temporary agency which hired out the employee in due time before the work starts.

 

When the effective duration of a  posting exceeds 12 months, posted employees are entitled to all legal conditions set forth by law, regulation or administrative provision, as well as by collective bargaining agreements or arbitration awards which have been declared universally, applicable in the Member State where the work is carried out.

 

Finally, the minimum wage applicable in the Member-State where the work is carried out is one of the guarantees that is now provided to posted employees, regardless of the length of the posting. Allowances specific to the posting are considered to be part of the employee’s remuneration unless they are paid in reimbursement of expenditure actually incurred on account of the posting.

 

In this chapter, the most significant aspects of Portuguese labour law for business investment are described below.

According to the law, an employment contract is one whereby a person agrees, upon payment, to provide his services to one or more other persons, within the latter’s organization and subject to its authority.

Portuguese law requires that fixed-term, unfixed-term, intermittent, part-time and telecommuting contracts, as well as temporary-work contracts (fixed or unfixed-term), must be agreed in writing. There is no such requirement for an employment contract of indefinite duration or one with a very short duration.

It is important to stress out that under the Labour Code, the following types of companies are recognized:

(a) Microbusiness that employs fewer than 10 employees;
(b) Small business that employs from 10 to 49 employees;
(c) Medium-sized business that employs from 50 to 249 employees;
(d) Large business that employs 250 or more employees.

The trial period is the time of initial implementation of the employment contract, during which the parties analyse their interest in maintaining the same. During the trial period, the parties shall act so that they may analyse their interest in maintaining the employment contract. The trial period may be excluded by written agreement between the parties.

In a contract of indefinite duration, the trial period has the following length:

(a) 90 days for most employees;

(b) 180 days for employees who:
I. hold positions of technical complexity, a high degree of responsibility or which presuppose a special qualification;
II. perform functions of trust;
III. are seeking their first job (employees who have previously executed a term contract with a minimum duration of 90 days are not considered for this purpose) and are long-term unemployed.

(c) 240 days for employees engaged in senior management positions.

For a fixed-term employment contract, the trial period has the following length:

(a) 30 days for a contract lasting six months or more;

(b) 15 days for a fixed-term contract lasting less than six months or one with an unspecified duration not expected to exceed that limit.

With contracts for labour contracts under service commission regime, the existence of a trial period depends on an written stipulation and may not exceed 180 days.

The trial period is shortened or eliminated, depending on whether the length of a previous fixed-term contract for the same job, or a temporary-work contract executed for the same position, or a service agreement to provide the same services, or a professional traineeship for the same activity with the same employer, was less than, equal to, or greater than the duration of said contract.

The trial period may be shortened by collective-labour regulations or by written agreement of the parties.

During the trial period, unless otherwise agreed in writing, either party may terminate the contract without prior notice and just cause, or being entitled to compensation. In the event that the trial period lasts more than 60 days, termination of the contract by the employer requires seven days advanced notice, with this period increasing to 15 days when such period has lasted for more than 120 days.

Employees are entitled each year to a minimum of 40 hours of training, or if hired on a fixed contract for a period equal to or greater than three months, a minimum number of hours in proportion to the duration of the contract for that year.

The employer may provide this annual training for up to two years in advance, or defer it, as long as the training plan so establishes, for an equal period of time, recording the training completed in fulfilment of the oldest training obligation (the advance period is 5 years in the event of attending a recognition, validation and certification of skills process, or for training which provides dual certification).

The employer shall provide training in each year to at least 10% of the company’s employees.

With the termination of an employment contract, the employee is entitled to receive compensation corresponding to the minimum annual number of hours of training that has not been provided, or credit for the training hours that they hold on the date of termination.

Under the Portuguese labour law, indefinite employment is the general rule as far as hiring is concerned (despite being advisable, in many situations, to enter into written agreements).

Fixed and unfixed-term employment contracts constitute exceptions to this rule (even if this type of contracts is widely used in Portugal).

Term employment contracts are generally admitted in order to satisfy temporary working needs, such as the replacement of other employees or exceptional workforce demands, or to undertake employment policies (such as the hiring of long-term unemployed or first-time jobseekers) and the launch of new companies or activities.

Fixed-term employment contracts for young people looking for their first job and the long-term unemployed is no longer possible and is limited to contracting of the very long-term unemployed (for more than 24 months)

On the other hand, companies with more than 250 employees can no longer contract fixed-term employees based on the reason for launching a new activity of uncertain duration or for starting up a company or establishment, a possibility that is limited to micro, small and medium-sized companies.

The maximum duration of fixed-term contracts, including renewals, has been reduced from 3 to 2 years. These contracts may be renewed up to three times, provided that the total duration of the renewals does not exceed the initial period of the contract.

The maximum duration of indefinite duration employment contracts has been reduced from 6 to 4 years. If one of the referred limits is exceeded, the fixed-term employment contract will be converted into an indefinite employment contract.

Fixed-term contracts might be judicially converted into contracts of indefinite duration when, for example, the motive for the hiring is invalid or judicially unproved or it has exceeded their maximum duration or renewals.

The additional contribution due to excessive rotation applicable to companies with an annual weight of fixed-term contracts greater than the respective sector indicator in force was created.

This additional contribution rate is applied progressively based on the difference between the annual weight of fixed-term contracting and the sector average, up to a maximum of 2%, with the scale of progression being defined in a regulatory decree.

The additional contribution due to excessive rotation is not applicable in situations of fixed-term employment contracts entered into for

(i) replacement of an employee on parental leave, or for replacement of an employee with temporary incapacity for work due to illness for a period equal to or longer than 30 days;
(ii) very short-term employment contract and
(iii) contracts mandatorily entered into on a fixed-term basis by law or due to the constraints inherent to the type of work or the employee's situation.

The application of the additional contribution due to excessive rotation took effect on 1 January 2020 and the first notification for payment took place in 2021.

Executive-level or equivalent duties may be performed in a contract under this regime, along with management or leadership posts directly dependent on the Board or the general manager or equivalent, personal secretarial jobs for people in any of these positions, or also – provided that a collective bargaining agreement allows it – jobs whose nature presumes a special relationship of trust regarding the people who hold these positions.

This type of contract must be executed in writing.

In terms of terminating such a labour relationship, either party may denounce it upon written notice, at least 30 or 60 days in advance, provided that it has lasted, respectively, up to two years or more. This aspect constitutes of the main advantages of this special regime.

This contract may be entered into by the company with pre-existent employees (internal service commission regime) or with external people (external service commission regime).

Upon termination of this contract, the employee is entitled to:

i. Within the context of an internal service commission regime:

a) to reassume the previously performed functions or the ones related to the category to which he may have been promoted;
b) alternatively, to terminate the contract within 30 days following the employer's decision to end the commission, being entitled to the legally established compensation as if he was included in a collective dismissal procedure.

ii. Within the context of an external service commission regime, he is entitled to receive the compensation indicated in a), ii. here above (unless the parties agree otherwise in writing).

The Portuguese Labour Code foresees the possibility of temporary reduction of activity or suspension of the labour contracts.

These measures may be due to the employee (illness, accident or military service) or to the employer (economic crisis, force majeure or employer´s interest).

The lay-off procedure consists in a measure which may be adopted by initiative of a company within a context of economic crisis to assure the company’s economic viability and the maintenance of posts.

The lay-off procedure may be grounded on market, structural and economic reasons.

Reduction:

- a quantitative change of the company’s regular operation that does not imply the total suspension of the employment contracts may consist in

- the reduction of the weekly or daily working periods affecting one or more group of employees rotationally, or

- the reduction of the number of hours corresponding to the employees’ normal daily or weekly working period);


Suspension:

- the employee is temporarily inactive once occurs the temporary closing of the company or production unit.

The lay-off comprehends a formal procedure with communication and information/negotiation with the employees phases.

During the period of reduction or suspension of activity, several effects of the labour contract are suspended. However, please note at some relevant rights and obligations of both the employee:

- Compensatory payment - since the suspension or reduction of activity determines a proportional reduction of the employees remuneration, the employees are entitled to receive a compensatory payment. Such compensation aims to assure that during the reduction or suspension period they receive a monthly salary equivalent to 2/3 of the regular gross remuneration and it shall never be inferior to the national minimum wage (which currently ascends to € 705,00) and with the maximum limit of 3 x national minimum wage (€ 2.115,00). The compensatory payment attributed to each employee is borne in 30% by the employer and in 70% by the Social Security;

- Performance of paid professional activity outside the company (for other entities – exception to the non-competition general rules) during the reduction or suspension period. Should this be case, the employee shall communicate the same to the employer within a maximum of 5 days. Moreover, the compensatory payment of the employees who perform activity outside the company for other entities during the reduction or suspension period shall be reduced in accordance;

- Social Security benefits: During the suspension or reduction period the employee is entitled to maintain all its social security benefits, which are calculated considering its normal remuneration;

- Vacation period and vacation and Christmas allowances: During the reduction or suspension period the employees maintain all their rights as regards the vacation period and vacation and Christmas allowances, in the same conditions as if the same were rendering effective work. Regarding the Christmas allowance, the same is borne by the Social Security Services in 50% of the amount of the compensatory payment and the remaining is directly paid by the employer.

The lay-off may last up to 6 months and may be extended for another 6 months period.

In principle, during the lay-off or in the following 30 or 60 days (in case lay off proceeding which has lasted up to or over 6 months), the employer must not terminate the labour contracts.

Other duties arise for both the employer and employees while the lay-off is in force.

In addition to other procedures provided for by law, an employment contract may terminate due to:

a) Expiration;
b) Revocation;
c) Dismissal for cause attributable to the employee;
d) Collective dismissal;
e) Dismissal due to elimination of job;
f) Dismissal for inability to adapt;
g) Unilateral termination of the contract by the employee without just cause;
h) Unilateral termination of the contract by the employee with just cause.

Dismissal of the employee without just cause or for political or ideological reasons is forbidden.

1.8.1. Expiration and Revocation

Expiration of the Employment Contract

In general, an employment contract expires for the following reasons:

a) It reaches its end date (for instance, fixed or unfixed term contracts);
b) Due to absolute and definitive supervening facts preventing a employee from doing his job or the employer from receiving it;
c) When a employee retires, due to age or disability.

A fixed-term employment contract expires at the end of the stipulated term, or the end of its renewal, provided that the employer or the employee notifies the other party in writing of its desire to terminate either 15 or 8 days before the deadline expires, respectively.

In the event of expiration of a fixed-term contract due to declaration by the employer, the employee is entitled to compensation corresponding to 18 days of base salary and seniority for each full year of work.

The compensation is determined as follows:

a) The amount of the employee's base monthly salary and seniority to be considered for the purpose of calculating the compensation may not exceed 20 times the guaranteed minimum monthly salary (which, as from January 1, 2021, will ascend to € 14,100.00);
b) The overall amount of the compensation may not exceed 12 times the employee's base monthly salary and seniority or, when the limit prior to 240 times the minimum monthly salary guaranteed is applicable (which, as from January 1, 2022, will ascend to € 169,200.00);
c) The daily amount of the base consideration and seniority is that resulting from the division by 30 of the base monthly consideration and seniority;

In the case of a fraction of a year, the amount of compensation shall be calculated proportionally.

An unfixed-term employment contract expires when the employer foresees an end to the term and notifies the employee of said expiration, at least 7, 30, or 60 days in advance, depending on whether the contract has lasted up to six months, from six months to two years, or for a longer period of time.

In the event of expiration of an unfixed-term contract, the employee is entitled to compensation, which is the sum of the following amounts:
a) 18 days' base salary and seniority for each full year of work, for the first 3 years of contract duration;
b) 12 days' base salary and seniority for each full year of work in subsequent years.

The provisions of the preceding paragraphs concerning the termination of fixed-term employment contracts shall apply to the method of calculation of the compensation.

Labour law calls for an automatic conversion into a fixed-term contract after retirement due to old age or turning 70 years old.

Thus, the employment contract is considered as a fixed-term contract for a employee who remains employed 30 days after both parties acknowledge retirement due to age.

Revocation of Employment Contract

The employer and the employee may agree to terminate an employment contract. A revocation agreement must be executed in writing. If the signatures of such agreement are recognized before a public notary, the employee cannot regret from his previous declaration to revoke the contract and may not, in principle, file a labour demand against the employer to claim other amounts not established therein.

1.8.2. Dismissal of the employee

Dismissal for Cause Attributable to the Employee 

A employee’s wilful and guilty conduct is just cause for dismissal when, due to its seriousness and consequences, it becomes immediately impossible to continue the employment relationship.

The following types of conduct are just cause for dismissal:

a) Unlawful disobedience of orders given by superiors;
b) Violation of the company’s employee rights and entitlements;
c) Repeated provocation of conflicts with company employees;
d) Repeated failure to fulfil obligations related to one’s position or job, with appropriate effort;
e) Serious damage to the company’s assets;
f) False statements regarding the justification of absences;
g) Unjustified absences that directly lead to harm or serious risk to the company, or whose number reaches in each calendar year 5 consecutive or 10 interspersed absences, regardless of damage or risk;
h) Wilful failure to follow safety and health rules at work;
i) Engaging in physical violence, injuries or other offenses punishable by law, while at work, against employees of the company, members of governing bodies or an individual employer not belonging to these, their delegates or representatives;
j) Kidnapping, or in general, any violation of freedom of the persons mentioned in the preceding item;
k) Failure to comply with or opposition to fulfilment of judicial or administrative decisions;
l) Abnormal reduction in productivity.

Whenever a certain behaviour constitutes just cause for dismissal, the employer shall notify the employee in writing of the company’s intention to proceed with his/her dismissal, adding a statement of misconduct with a detailed description of the facts charged to the employee. On the same date, the employer sends copies of the notice and statement of misconduct to the employees commission, and if the employee is a union representative, to their respective employees union.

The employee has then 10 business days to consult the documents and respond to the statement of misconduct.

After this initial phase, and after the hearings proceedings, the dismissal decision must be substantiated and executed in writing.

The decision results in termination of the contract as soon as the employee receives a copy or is notified or when not received by the employee in a timely manner due to the employee’s own fault.

Whenever there is just cause for dismissal, the employee is not entitled to receive a compensation.

Collective dismissal

Whenever an employer decides to terminate employment contracts simultaneously or within a period of three months, including at least two or five employees, respectively, depending on whether they involve a micro or small companies, in the first case; or a medium or large company, in the second, provided that such termination is based on closing one or more sections or equivalent structures or on a reduction of the number of employees due to economic, structural or technological reasons – such procedure is called Collective Dismissal.

For these purposes, the following definitions apply:

a) Market reasons: a slowdown in business activity caused by an expected decrease of demand for goods or services; or a supervening legal or practical impediment to placing these goods or services on the market;
b) Structural reasons: economic and financial imbalance, changing business, restructuring productive organization, or replacement of dominant products;
c) Technological reasons: changes in technical or manufacturing processes, automation of production, control, or cargo-transport tools, as well as computerization of services or automation of means of communication.

An employer that intends to carry out collective dismissals must initiate the procedures by notifying the employees and its representatives of its intentions and reasons.

Furthermore, the employer must also labour authorities that a Collective Dismissal will take place.

Subsequently an information and negotiation period has mandatorily to be. Generally, the labour authorities are present during this stage.

Having reached an agreement with employees, or in its absence, after a certain period of time, the employer may issue the Collective Dismissal final decision. This decision has to be issued in writing and observing a prior notice period of:

a) 15 days in advance, for an employee with less than 1 year of seniority;
b) 30 days in advance, for an employee with seniority equal to or greater than one year but less than five years;
c) 60 days in advance, for an employee with seniority equal to or greater than five years and less than ten years;
d) days in advance, for an employee with seniority equal to or greater than ten years.

In the event of a collective dismissal, the employee is entitled to a compensation calculated in accordance to the following rules (depending on the date of the execution of the labour contract):

a) Entered into force before November 1st, 2011:

■ Regarding the period until October 31st, 2012: one month´s salary per each year of work;

■ October 31st, 2012 until September 30th, 2013: 20 days´ salary per each year of work;

■ After September 30th, 2013:

- For the first 3 years of the labour contract’s duration: 18 days´ salary per each year of work;

- For the remaining years: 12 days´ salary per each year of work.

If the compensation regarding the period until October 31st, 2012 or until September 30th, 2013, exceeds the legal limits of 12 monthly wages or € 169,200.00 (240 times the national minimum wage) the severance pay will be limited to that amount.

The compensation cannot be inferior to 3 months’ salary.

b) Entered into force after November 1st, 2011, until September 30th, 2013:

■ Until September 30th, 2013: 20 days salary per each year of work;

■ After September 30th, 2013:

- For the first 3 years of the labour contract’s duration: 18 days´ salary per each year of work;

- For the remaining years: 12 days´ salary per each year of work.

If the compensation regarding the period until October 31st, 2012 or until September 30th, 2013, exceeds the legal limits of 12 monthly wages or € 169,200.00 (240 times the national minimum wage) the severance pay will be limited to that amount.

c) Entered into force after September 30th, 2013:
12 days´ salary per each year of work, with the following maximum limits:

■ The salary used as a basis to calculate the compensation may not be higher than € 14.100,00 (20 times the national minimum wage);

■ The global amount of compensation may not be higher than 12 times the monthly salary or € 169,200.00 (240 times the national minimum wage).

For a partial year, compensation is calculated proportionally.

An employee is presumed to have accepted termination upon receiving compensation. This assumption may be rebutted as long as, simultaneously, the employee hands over the total cash compensation received or places it at the disposal of the employer, in any manner.

The compensation rules that have just been presented are applicable to dismissal for Extinction of Workplace and Dismissal for Inability to Adapt.

Dismissal due to Elimination of Job Position

It is considered dismissal due to elimination of a job position when an employer terminates an employment contract and justifies it on said elimination, if due to economic, structural or technological reasons related to the business.

Dismissal due to elimination of a job position may only take place provided that the following conditions occur:

a) The reasons given are not due to a wilful misconduct of the employer or employee;
b) The employment relationship is practically impossible to sustain (this occurs when the employer does not have another compatible job position with the professional category of the employee);
c) There are not, at the company, fixed-term employment contracts for tasks related to those performed on the job being eliminated;
d) Collective dismissal is not applicable.

If in the section or equivalent structure there is a plurality of jobs with identical functional content, to determinate the job position to extinguish the employer must observe, by reference to the respective job holders, the following order of criteria:

a) Worst performance evaluation, according to criteria previously known by the employee;
b) Lower academic and professional qualifications;
c) Greater costs to the company for maintaining the employment relationship of the employee;
d) Less experience in the job position;
e) Less seniority in the company.

With dismissal due to elimination of a job, the employer must notify in writing the employees committee or, in its absence, the inter-union committee or union commission, and the employee involved, and if the employee is a union representative, the respective trade union.

During the ten days following notice as stipulated above, the employees representative body, the employee involved, and if the employee is a union representative, the respective union association, may send to the employer a justified opinion, as well as alternatives to mitigate the effects of the dismissal.

A dismissal decision shall be written.

The employer shall notify its decision in a copy or transcription to the employee involved (and if the employee is a union representative, to the respective trade union), to the employees committee (or in its absence, to the inter-union committee or the union committee), and also to the inspectors office of the ministry responsible for labour, with the same advanced notice as with collective dismissals.

Dismissal for Inability to Adapt

Dismissal for an inability to adapt results in the employer’s termination of an employment contract when an employee is unable to adapt to the job.

This inability to adapt occurs in any of the situations described below, when it becomes practically impossible to continue the employment relationship, based on the way in which the employee does his or her job:

a) Continual reduction of productivity or quality;
b) Repeated mistakes in job-related duties;
c) Risks to the employee’s health and safety, or of other employees or third parties.

A employee’s inability to adapt also occurs due to the technical complexity of duties or directions when objectives previously agreed upon in writing are not met as a consequence of the employee’s job performance, making it practically impossible to continue the employment relationship.

Dismissal due to an inability to adapt in the above mentioned situations may only take place provided that the following requirements are all met:

a) Changes to the job have been implemented due to changes in the manufacturing or marketing processes, new technology or equipment based on different or more complex technology, in the 6 months prior to starting the dismissal process;
b) Adequate professional training has been provided for the changes in the workplace under the supervision of the responsible party or a certified training entity;
c) After the training, the employee was given an adaptation period of at least 30 days on the job or outside of the workplace, if the duties for that position are likely to cause damage or risks to the safety and health of the employee, other employees or third parties;
d) There is no other available, compatible job at the company matching the employee’s professional qualifications;

In the case of dismissal due to an inability to adapt, the employer must notify in writing the employees commission, or in its absence, the inter-union committee or the union committee, the employee, and if the employee is a union representative, the respective trade union.

During 10 days after the notice, the employees representative body, the employee involved, and if the employee is a union representative, the respective union association, may send a justified opinion to the employer, in particular about the reasons for the dismissal, and the employee may also present any evidence that he/she deems relevant.

Five days after this deadline, the employer may finalize the dismissal, though a justified decision in writing.

The employer shall report the decision by copy or transcription to the employee (and, if the employee is a union representative, to the respective trade union), to the employees commission, or in its absence, to the inter-union committee or the union commission, as well as to the inspector’s office of the ministry responsible for labour, with at least as much advance notice as with a collective dismissal.

During the 90 days following dismissal due to an inability to adapt, the employment level must be maintained at the company by hiring or transferring a employee during the dismissal process for reasons not attributable to him.

Unlawful Dismissal

The dismissed employees may file a claim before a Labour Court in order to challenge the termination of their labour contracts.

If the Court decides that there was any illegal procedure or lack of reasons or formalities on the dismissal, he employees may choose between being reinstated in the company, or receive a compensation ranging between 15 and 45 days of base remuneration plus seniority bonus per each year or fraction of year of seniority, with a minimum of three months of base remuneration plus seniority bonus.

On both situations, the employees shall be entitled to the salaries which they would have received if the dismissal had not taken place and to an eventual compensation for damages suffered.

1.8.3. Employee’s Termination of Employment Contract

Unilateral Termination of the Labour Contract by the Employee with Just Cause

If it becomes immediately impossible to continue the employment relationship in ways to be considered as just cause, an employee may terminate it immediately.

For instance, failure to make timely payment of compensation that lasts for 60 days is a justifiable reason, or when the employer, at the employee's request, states in writing that it expects not pay the wages owed, by the end of that period.

The employee must notify the employer in writing of the termination of the contract, stating briefly the facts that justify the termination, within 30 days of becoming aware of the facts.

In this event, the employee is entitled to compensation to be determined between 15 and 45 days of base pay and seniority pay for each year worked, depending on the amount of compensation and the extent of the employer’s unlawful conduct, and may not be less than 3 months of base pay and seniority pay.

In the event of a partial year worked, the amount of compensation is calculated proportionately.

In the case of a fixed-term contract, compensation cannot be less than the amount of wages owed.

If the just cause for termination of the contract is not proven, the employer is entitled to compensation of damages caused, not less than the amount calculated in the below mentioned terms in the case of termination without prior notice, as described below.

Unilateral Termination of the Labour Contract by the Employee without Just Cause

Notice of termination: the employee may terminate a contract regardless of cause by notifying the employer in writing at least 30 or 60 days in advance, depending on whether he or she has worked, respectively, up to 2 years or for more than 2 years.

Collective bargaining regulation and the employment contract may increase the prior notice period by up to 6 months for an employee who holds a management or executive position, or one who has representative or responsibility duties.

In the case of a fixed-term contract, termination may take place with notice given 30 or 15 days in advance, if the contractual duration is at least 6 months or less.

Termination without notice: a employee who does not comply in whole or in part with the notice period must pay the employer compensation in an amount equal to base pay and seniority pay for the period in question, without limitation to compensation for damages caused by not abiding by the notice period or the obligation assumed in an employment commitment agreement.

1.8.4. Working Compensation Fund, Equivalent Mechanism and Working Compensation Warranty Fund

Law No. 70/2013 of August 30 introduced the legal framework of the Working Compensation Fund, the Equivalent Mechanism and the Working Compensation Warranty Fund.

Only employment contracts celebrated after October 1, 2013 are under the regulation of this law.

Employers are obligated to contribute with a value equal to 1% of the employee’s monthly remuneration to the referred funds, in each month.

The objective of these new funds is to guarantee that the employees will receive, at least, half of the compensation he is entitled to in case of contract termination.

The amount of the Christmas bonus is proportional to the length of service rendered in the specific year, in the following situations:

a) Year of employee’s admission;
b) Year of employment contract’s termination;
c) In the event of suspension of the employment contract, unless due to a reason associated to the employer.

The employees are also entitled to receive salary during their vacations. The vacation salary shall correspond to the one they would receive if they were actually working.

In addition to the vacation salary, the employees are also entitled to a vacation subsidy, which includes the employees’ base salary and other payments given as consideration for the work rendered.

Unless agreed otherwise in writing, the vacation subsidy should be paid before the beginning of the vacation period or proportionally if the employ enjoys the vacations in a phased manner.

An employee exempt from working schedule is entitled to a specific remuneration, established in collective bargaining regulation, or in its absence, not less than:

a) 1 hour of overtime per day;
b) 2 hours of overtime per week if the employee is subject to a work schedule exemption regimen that observes the normal work periods

The work schedule exemption’s salary may be waived by the employee with a position on the board or at a senior management level in the company.

Unless governed differently in the collective bargaining agreement applicable, night-time work is regularly paid with a 25% additional charge in relation to the pay due to equivalent day-time work.

Overtime is paid at the hourly rate with the following additions:

a) 25% for the first hour or a fraction thereof, and 37,5% per hour or a fraction thereafter, on a business day;
b) 50% for each hour or part thereof, on a mandatory or extra day off, or on public holidays.

The collective bargaining agreement may set forth higher percentages for overtime payment. However, those percentages will only be applicable from 2014, August 1 onwards. Until then, the employer will only be bound to terms set forth in the general law.

Whenever the employee renders overtime on a mandatory day off, he is entitled to a full day of compensatory rest. The collective bargaining agreement may set forth other provisions regarding this matter more favourable to the employees.

When defining the salary’s amount, the quantity, nature and quality of work should be taken into account, observing the principle that, for equivalent work or work of equal value, there shall be equal pay.

Hourly wage is calculated according to the following formula:

"MS" x 12
  52 x "n"

where “MS” is the monthly salary, and “n” is the normal weekly work period.

All employees are guaranteed a minimum monthly wage, annually defined through specific legislation, after consultation with the Standing Committee for Social Dialogue (CPCS).

For 2024, the national minimum wage is € 820.00 gross per month, for mainland Portugal (14 months per year). Nevertheless, higher minimum wages may be established in collective bargaining agreements.

Despite fixing working hours’ maximum limits, Portuguese labour law sets forth several mechanisms to introduce flexibility in the organization of the employees’ working time.

The Portuguese Labour Law establishes a maximum of 8 daily working hours and 40 weekly working hours. The Collective Bargaining Agreement may fix less working hours per week or day.

Through the Collective Bargaining Agreement or by mutual agreement between employer and employee it is possible to define work period on an average basis, provided that the working hours’ maximum limits are observed on a predefined reference period.

A “Hours’ Bank” regimen can also be introduced by Collective Bargaining Agreement or by agreement between employer and employees.

Night work is defined as the work rendered between 10pm and 7am (Collective Bargaining Agreement may dispose differently).

The work rendered outside the work schedule is considered overtime. Overtime should only be rendered when the company has to meet eventual and temporary increase of work that does not justify new admissions, with the following limits:

(a) 175 or 150 hours per year (depending on the company’s size). The annual limit might be increased to 200 hours per year by Collective Bargaining Agreement;
(b) 2 hours per working day.

Employees may be requested to render overtime in case of force majeure or if necessary to prevent or repair severe damages suffered by the company or for its viability.

Overtime is mandatory for the employee, except when he expressly requests to be excused due to a legitimate reason.

Rendering overtime entitles the employee to an extra pay (vd. 2.1).

Rendering overtime may entitle the employee to paid compensatory rest as follows:

(a) Overtime rendered that barred the full enjoyment of the employee’s daily rest entitles him to a paid compensatory rest equivalent to the hours not enjoyed in the daily rest, to be enjoyed in the following three business days;
(b) Overtime rendered on a mandatory rest day confers the employee the right to a compensatory day rest, to be enjoyed in the following three business days;
(c) Overtime rendered on a mandatory weekly rest day due to unexpected absence of an employee who should occupy the position in the following shift entitles the employee to a paid compensatory rest equivalent to the hours not enjoyed in the daily rest, to be enjoyed in the following three business days.

Mandatory holidays include January 1st, Good Friday (which may be observed on another day with local significance during Easter), Easter Sunday, April 25th, May 1st, Corpus Christi June 10th, August 15th, October 5th, November 1st, December 1st, December 8th, and December 25th.

According to specific legislation, certain mandatory holidays may be observed on the Monday of the following week.

In addition to mandatory holidays, Fat Tuesday and local holidays may be established as holidays by collective bargaining agreement or employment contract.

During holidays, businesses must close or suspend all activities that are not allowed on Sundays.

Every calendar year, employees are entitled to a period of paid vacation, which is acquired every January 1st (referred to the preceding calendar year).

The right to vacation cannot be waived. Effective vacation time cannot be substituted, even with the employee's consent, by any form of economic or other compensation, if a minimum of 20 business vacation days are not assured.

Annual vacation period has the duration of 22 business days. Collective bargaining agreements may extend the duration of the annual vacation period.

Vacation should be taken within the calendar year in which it becomes due. However, vacation may be taken until April 30 of the following year, whether or not in accumulation with the vacation that becomes due that year.

In the admission year, the employee is entitled to 2 business days of vacation per each month of the labour contract’s duration, with 20 days limit, to be enjoyed after 6 months of work. If the calendar year ends before that 6 months’ period, vacation may be taken until June 30. Same rules apply in case of impediment that started in the previous year.

Nevertheless, employee shall never be entitled to more than 30 business days of vacation period in the same calendar year.

For employment contracts that last less than six months, the employee is entitled to 2 business days of vacation per each month of the contract’s duration.

If compatible with the company’s activity, the employer may fully or partially close the company or establishment, for collective vacations:

(a) Up to 15 consecutive days between May 1st and October 31st;
(b) For more than 15 consecutive days or outside of the period stated in the preceding line, whenever stipulated as such in collective regulations, or through a favourable opinion from the employees council;
(c) For more than 15 consecutive days between May 1st and October 31st, whenever the nature of the business so requires.

The employer may also fully or partially close the company, for employees’ vacations:

(a) For 5 consecutive business days during Christmas school holidays;
(b) On a business day between a Tuesday or Thursday holiday and a weekly rest, provided that the employer communicates that closure to the employees until December 15 of the previous year.

Employers may change vacation time already scheduled, or interrupt ongoing vacations, due to the imperative demands of the company, but employees will be entitled to be indemnified for any losses he proves to suffer.

Absences are when an employee is not present at the location where they perform their job during a normal work day.

Whenever an employee is absent for shorter periods than a normal work day, their times are added to determine the absence. If the duration of the normal daily work is not standard, the average duration should be used.

Employers should be notified off an absence, whenever foreseeable, which includes a justification, at least 5 days in advance. If this advanced notice cannot be given, in particular because the absence is unforeseeable five days in advance, then the employer should be notified as soon as possible.

An excused absence does not affect any of the employee’s rights. However, the following excused absences result in a loss of pay:

(a) Due to illness, provided that the employee is enrolled in the social security system for protection against illnesses;
(b) Due to an accident at work, provided that the employee is entitled to any benefit or insurance;
(c) An absence to care for a member of the household;
(d) Absences which by law are considered justified when they exceed 30 days per year;
(e) Absences authorized or approved by the employer.

An unexcused absence results in loss of pay for the period of absence, which is not counted in the employee’s seniority.

Whenever an employee attends late without an excuse:

(a) If more than 60 minutes, and at the start of daily work, then the employer may not allow the employee to work for the rest of the normal work day;
(b) If more than 30 minutes, then the employer may not allow the employee to work during this part of the normal work day.

A loss of pay due to absences may be replaced by:

(a) Waiving an equal number of vacation days, up to the permitted limit during time off (see section 4.2), with an express declaration from the employee notifying the employer;
(b) Working beyond the normal period, within the limits set for adaptability by collective bargaining regulations when the collective bargaining agreement allows it.

These considerations do not imply a reduction in vacation pay for accrued vacations.

To defend and pursue their collective rights and interests, employees may establish:

(a) Unions;
(b) Employees committees and sub-committees;
(c) Employees’ representatives on health and safety matters;
(d) Other collective structures admitted in law, including European Works Councils.

Collective labour representation associations are independent from the state, political parties, religious institutions and any other association of another nature, and the latter are prohibited from intervention in its organization and direction as well as from providing mutual financial support.

Employees are free to join a union, without suffering any kind of discrimination.

A strike is, in accordance with the Portuguese Constitution, a employee’s inalienable right.

The decision to strike is, usually, made by Unions.

Nevertheless, the employees’ assemblies may decide to strike, as long as:

(a) The majority of employees in the company are not represented by Unions;
(b) The assembly is expressly convened for such purpose by 20% or 200 employees;
(c) Majority of the company’s employees participate in the assembly;
(d) The decision to strike is approved by the majority of voters.

The strike shall be communicated to the employer with a minimum prior notice of 5 business days. In companies or establishments destined to the satisfaction of indispensable social needs, the strike prior notice period is, at least, 10 business days.

During a strike, the employer may not replace the strikers with other people who weren’t working in the establishment or department at the time of the notice.

In a similar fashion, the employer cannot hire an undertaking to perform the striking employees’ tasks, unless for the satisfaction of indispensable social needs that have not been guaranteed or for services necessary for the safety and maintenance of the equipment and premises and only in the amount strictly necessary to said services.

The strike suspends, for those to the employees that join it, the labour contract, namely the right to salary and, as a result, releases the employees from the duty to accept orders and attend work.

A strike ends with an agreement between the parties by deliberation of the entity that declared it, or at the end of the period for which it was called.

Employees may not be coerced, harmed, or discriminated for having gone on strike, or not.

A lock-out is any unilateral decision of the employer that totally or partially paralyses the undertaking or the prohibition of access to the workplace to some or all the employees, as well as the refusal to provide work conditions and work instruments that determines or is susceptible of determining the paralysation of some or all sectors of a company or as long as, in any event, is intended to reach objectives beyond the normal company’s activity.

In Portugal, lock-outs are prohibited.

A foreign or expatriate employee who is authorized to pursue an occupation within Portuguese territory is entitled to the same rights and is subject to the same duties as an employee with Portuguese citizenship.

An employment contract with foreign or expatriate employees must be in writing and shall contain, besides the specific formalities also foreseen for term contracts, the following information:

(a) Identification, signature, and the full address of the parties;
(b) Reference to the work permit or certificate authorizing permanent or temporary residence of the employee in Portuguese territory;
(c) The employer’s activity;
(d) Employee’s job and salary;
(e) Workplace and normal working hours;
(f) Amount, frequency, and salary’s payment method;
(g) Labour contract's execution date;
(h) Contract’s date and the beginning of its effects.

The employee must also attach to the contract the identification and the address of the person or persons who will receive pensions in the event of death resulting from an occupational accident or illness.

The employment contract should be prepared in duplicate (one for each party). The employer’s duplicate must have attached proof of legal obligations concerning the entry and residence of the foreign or expatriate employee in Portugal.

The employer must communicate to the Portuguese labour authorities, through electronic form:

(a) The execution of a labour contract with a foreign or expatriate employee, prior to the beginning of its execution;
(b) The labour contract’s termination, 15 days thereafter.

Without intending to exhaust the subject, given that there are numerous forms of legal stays available to foreigners, this guide will describe provide some information about two types of visas: temporary stays and residence visas.

Transit and short-term visas may be valid for one or more Member States of the Convention, while temporary-stay and residence visas are only valid for Portuguese territory.

Residence and temporary-stay visas are only granted to citizens of third-party countries who have not been subject to forced removal from the country and are in the subsequent period of being prohibited from entering national territory; have not been included on the no-entry list in the Schengen Information System by any of the contracting parties; or in the Integrated Information System of the SEF; and they have means of subsistence, a valid travel document, and travel insurance.

To be granted a residence visa to work as an employee or to be self-employed, to study, for student exchange, an internship or for volunteer work, or a visa for temporary or short stay, a citizen from a third-party state is also required to have a ticket document that ensures his or her return.

A prior decision of the SEF is mandatory to issue a visa in the following cases:

a) When residence and temporary-stay visas are requested (but, in urgent and duly justified cases, prior consultation may be waived specifically when dealing with applications for a residence visa to work independently or for a temporary stay);
b) When determined as such for reasons of national interest, for reasons of national security, or for the prevention of illegal immigration and related crime.

Foreign citizens admitted into national territory under the law who wish to remain in the country for a period of time longer than originally authorized may extend their stay. The periods for extension of stay are described in the terms of their visas, as listed below. In addition to these time limits, an extension of stay may be granted pending application for a residence permit, as well as in duly justified cases.

In exceptional circumstances occurring after legal entry into national territory, relatives of holders of temporary entry visas may be granted an extension of stay. Neither the validity nor the duration of the extension of stay may be longer than the validity and duration of the visa granted to the family.

Without limitation to sanctions stipulated by law, and except in the case of exception circumstances, requests for extension of stay are not granted, when submitted 30 days after the end of the authorized period of stay.

An extension of stay is granted in the form of a sticker approved by the Minister of Home Affairs.

7.1.1 Temporary Visa

A temporary visa is valid for 3 months and can be used for multiple entries in Portuguese territory. However, a temporary visa issued for temporary employed work may be granted for the duration of the employment contract.

With temporary visas, an extension of stay may be granted for up to one year, renewable for an equal period (except in cases of temporary work or self-employment exceeding no more than 6 months, in which case the extension is only allowed up to 90 days).

The deadline for a decision on a request for a temporary visa is 30 days from submission of the application.

We address below the most relevant types of temporary visas for this Investor's Guide:

- Temporary visa to transfer employees;
- Temporary visa for temporary professional activity;
- Temporary visa for research or highly qualified activity;
- Transit visa;
- Short stay visa.

Temporary Visa to Transfer Employees

The granting of temporary entry visas to nationals of Member States to the World Trade Organization, transferred in the context of providing services or conducting training in Portuguese territory, is subject to verification of the following conditions:

a) The transfer must take place between establishments of the same company or group of companies, and the establishment must be located in Portuguese territory to provide services equivalent to those provided by the institution from which the foreign worker has been transferred;
b) The transfer has to be for partners or subordinate workers who have worked for at least one year at the establishment located in another Member State to the World Trade Organization, which fall under the following categories:

i) Those who have executive powers and work as senior executives of the company and essentially manage a department or establishment, receiving general guidance from the board;
ii) Those who possess specialized knowledge essential to the business, research equipment, techniques or management thereof;
iii) Those who have to receive training at the office in Portugal.

Temporary Visa for Temporary Employment

Temporary entry visas for nationals of third-party countries who intend to work in Portuguese territory may be granted, provided that they possess a promise for work or employment contract.

A temporary visa for temporary work is granted for the duration of the employment contract. In exceptional circumstances, a temporary visa for temporary work may be granted for a period exceeding six months, provided that the job falls is part of an investment contract and up to the time limit for its execution.

This visa may only be renewed if the applicant has a lawful employment contract and is covered by the National Health Service or has other health insurance.

Temporary Visa for Research or Highly Qualified Activities

A temporary visa may be granted to foreign nationals who wish to pursue research, teaching at an institution of higher learning, or another highly qualified activity for less than one year, provided that the:

a) Applicant has been hired to work in a research center approved by the Ministry of Science, Technology and Higher Education, through a promise or employment contract, a proposal or service agreement, or a grant for scientific research; or
b) Applicant has a promise or employment contract or written proposal, or a contract to provide services to teach at an institution of higher learning, or to perform a highly qualified activity in Portugal.

This visa may only be renewed if the applicant has an employment or service contract or a grant for scientific research and is covered by the National Health Service or other health insurance.

In the case of shorter stays, the following visas may also be issued:

A transit visa is intended to allow entry to Portugal to foreign nationals who wish to enter a third country to which their admission has been guaranteed.

A transit visa may be granted for one, two, or in exceptional cases, multiple entries, provided the duration of each transit does not exceed five days.

With transit visas, a stay may be extended for a maximum of up to five days.

A short-stay visa is intended to allow entry to Portugal to those whose purposes have been accepted by authorities and do not warrant the granting of another type of visa, especially for tourism or visits from family members who hold temporary visas.

The visa may be granted for a period of one year, allowing for one or more entries, provided that the duration of a single visit, or the total duration of successive visits, does not exceed three months per semester from the date of the first foreign entry.

In duly justified cases, and where it is of interest to Portugal, a multiple entry visa for a duration of longer than one year may be granted by joint decision of the Ministers of Home Affairs and Foreign Affairs, for certain groups of people.

In the case of short-stay visa holders (as well as foreign citizens without a visa), this extension is for 90 days, and may be renewed for an equal period of time. An extension of stay granted to citizens admitted to the country without a visa and short-term visa holders is limited to Portugal whenever the stay exceeds 90 days per semester, from date of initial entry from abroad.

7.1.2 Residence Visa

A residence visa is intended to enable the holder to enter Portuguese territory in order to apply for a residence permit and is valid for two entries in Portuguese territory, allowing the holder to stay for a period of four months. Without limitation to shorter time limits imposed by this law, the deadline for a decision on the application for a residence visa is 60 days.

With residence visas, an extension of stay may be granted for up to 90 days.

This type of visa may be granted in several ways, however, we believe that the following three reasons are most relevant to this Guide:

- To work as an employee;
- To work as an independent professional or immigrant entrepreneurs;
- To carry out research or other highly qualified activities

Residence Visa to Work as an Employee

A residence visa to work as an employee may be issued to foreign nationals who satisfy the general conditions set out above (see 8.1) and who:

a) hold an employment contract or the promise of an employment contract; or
b) possess skills, competencies, or qualifications that are acknowledged and appropriate to engage in one of the activities covered by the preceding paragraph and have received a specific expression of interest from the employer.

Residence Visa to Work as an Independent Professional or Immigrant Entrepreneur

Visas to apply for residence permits to engage in independent professional work may be given to a foreign national who:

a) has a contract or written proposal for a service agreement to work as an independent contractor; and
b) has the skills to work as an independent contractor, where applicable.

A residence visa for immigrant entrepreneurs who wish to invest in Portugal is granted, provided that:

a) they have made investments, or
b) they can prove that they have funding available in Portugal, including funds from financing obtained from a financial institution in Portugal, and they demonstrate by any means their intention to make an investment in Portugal.

Residence Visa for Research or other Highly Qualified Activity

A residence visa is granted for conducting scientific research to foreign nationals who have been admitted to work as a researcher at a research center approved by the Ministry of Science, Technology and Higher Education, mainly through a promise or employment contract, a written proposal or a service agreement, or a grant for scientific research. A residence visa is also granted to teach at an institute of higher learning, or to perform other highly qualified activities, to foreign nationals who have an adequate promise or employment contract, written proposal or service agreement.

The deadline for a decision about the visa application is 30 days.

A residence visa to work as an employee may be issued to foreign nationals who satisfy the general conditions set out above (see 8.1) and who:

a) hold an employment contract or the promise of an employment contract; or
b) possess skills, competencies, or qualifications that are acknowledged and appropriate to engage in one of the activities covered by the preceding paragraph and have received a specific expression of interest from the employer.

Residence Visa to Work as an Independent Professional or Immigrant Entrepreneur

Visas to apply for residence permits to engage in independent professional work may be given to a foreign national who:

a) has a contract or written proposal for a service agreement to work as an independent contractor; and
b) has the skills to work as an independent contractor, where applicable.

A residence visa for immigrant entrepreneurs who wish to invest in Portugal is granted, provided that:

a) they have made investments, or
b) they can prove that they have funding available in Portugal, including funds from financing obtained from a financial institution in Portugal, and they demonstrate by any means their intention to make an investment in Portugal.

Residence Visa for Research or other Highly Qualified Activity

A residence visa is granted for conducting scientific research to foreign nationals who have been admitted to work as a researcher at a research center approved by the Ministry of Science, Technology and Higher Education, mainly through a promise or employment contract, a written proposal or a service agreement, or a grant for scientific research. A residence visa is also granted to teach at an institute of higher learning, or to perform other highly qualified activities, to foreign nationals who have an adequate promise or employment contract, written proposal or service agreement.

The deadline for a decision about the visa application is 30 days.

There are two types of residence permit:

a) Temporary residence permit;
b) Permanent residence permit.

A foreign citizen authorized to reside in Portugal is issued a residence permit.

7.2.1 Temporary Residence Permit

In this case, a residence permit is issued to foreign citizens, valid for a period of 1 year from the date of its issuance, renewable for successive periods of two years.

Renewal of the residence permit must be requested at least 30 days before it expires, and it requires verification of several requirements, namely, the existence of means of subsistence, accommodation, good standing with the Finance and Social Security departments, and not having been sentenced for a term of more than one year in prison.

Without limitation to the special conditions for granting a residence permit, the applicant must meet the following cumulative conditions as well:

a) Possession of a valid residence visa, granted for the purposes set forth by law to grant a residence permit;
b) Absence of any fact which, if known by the competent authorities, should preclude granting the visa;
c) Physical presence in Portuguese territory;
d) Possession of means of subsistence;
e) Housing;
f) Enrolment in Social Security, where applicable;
g) No criminal conviction punishable in Portugal by imprisonment for a term exceeding one year;
h) Not being prohibited from re-entering Portugal, after being removed from the country;
i) No marks in the Schengen Information System;
j) No marks in the Integrated Information System of the SEF for the purpose of refusing entry.

7.2.2 Permanent Residence Permit

In this case the law does not establish a term of validity. A permanent residence permit should, however, be renewed every 5 years or whenever changes occur to the identification information recorded therein.

A permanent residence permit, to be presented to the SEF, is contingent upon verification of the following cumulative requirements: foreign nationals must have had a temporary residence permit for at least 5 years; during this period, they cannot have been sentenced to more than one year in prison; they must have means of subsistence and accommodation; and they must prove to have basic knowledge of the Portuguese language.

For all legal intents and purposes, a residence permit replaces an identification document.

The application for a permanent residence permit and a permit renewal must be decided within 60 and 30 days, respectively. If a decision isn’t made by the specified time, it is considered tacitly granted, and the residence permit is issued immediately.

A residence permit holder has the right to education and instruction, to work as an employee or independently, professional training, access to health care, and access to the law and courts. Residence permits also ensure equal treatment in matters of social security, tax benefits, union membership, recognition of diplomas, certificates and other professional qualifications, or access to goods and services available to the public, as well as the application of provisions granting special rights.

7.3 Residence Permit to Work 

Residence Permit to Work as an Employee

In addition to the general requirements established in 7.2.1 above, residence permits to work as an employee are only granted to foreign nationals who have employment contracts that abide by the law and are enrolled in Social Security.

In exceptional cases, the requirement of having a valid residence visa may be waived, provided that foreign nationals not only meet the general conditions in this item, but also the following ones:

a) they have an employment contract or employment relationship confirmed by a union, association with a seat on the Advisory Council or the General Inspectorate of Labour;
b) they have entered the country legally and remain there legally;
c) they are enrolled in and are in good standing with Social Security.

Residence Permit to Work Independently

In addition to the general requirements set out in section 7.2.1, a residence permit to work independently is only granted to foreign nationals who meet the following requirements:

a) they have formed lawful companies, declared the start of business with the tax administration and Social Security as an individual, or executed a service agreement to work as an independent contractor;
b) they are qualified to work as an independent contractor, as applicable;
b) they are able to sustain themselves;
c) they are registered with Social Security;
d) when required, they have a statement from their professional body confirming that they have met the enrolment requirements.

A residence permit holder who works independently may work as an employee, with the provisions stipulated further above applying, along with the appropriate adaptations, upon replacement of the residence permit.

Residence Permit for Research or other Highly Qualified Activity

A residence permit is granted to foreign nationals to pursue research, to teach at an institution of higher learning, or other highly qualified activity, who, in addition to the conditions set out for granting temporary residency (see 7.2.1), must also meet the following requirements:

a) they have been hired to work in an officially recognized research centre, especially by means of an employment contract, a service agreement, or a grant for scientific research, or
b) they have an employment contract or service agreement compatible with teaching at an institution of higher learning or performing another highly qualified activity;
c) they are enrolled in Social Security.

Additional information relating to other types of visas, residence permits, and ways of extending these visas may be found on the website of the Bureau of Immigration and Borders.

Residence Permit for Research or other Highly Qualified Activity

New legal provisions open up the possibility of applying for a residence permit for pursuing investment activities to those who have entered the country regularly (v.g. holders of valid Schengen Visas, or beneficiaries of Visa exemption), by transferring capital, creating jobs or acquiring real estate, with advantageous periods of stay in Portugal. More info here.

Foreign nationals may secure long-term resident status, provided that they have resided legally and continuously in the country for five years immediately preceding their application, and they have stable, regular income sufficient for their own subsistence and that of their family, health insurance, housing, and demonstrated fluency in basic Portuguese.

This application should be filed at the SEF office in the applicant’s district. The applicant will be notified in writing of the decision within six months (in exceptional circumstances associated with the complexity of an application, the deadline may be extended for three months, with the applicant informed of said extension). Failure to notify within a 9-month period implies tacit acceptance of the request.

Long-term resident status is permanent and based on a title ("EC title") whose duration has a minimum validity of five years and is automatically renewable, upon application, while valid.

Recipients of long-term status enjoy equal treatment with nationals under the Constitution and the law.

New legal provisions open up the possibility of applying for a residence permit for pursuing investment activities to those who have entered the country regularly (v.g. holders of valid Schengen Visas, or beneficiaries of Visa exemption), by transferring capital, creating jobs or acquiring real estate, with advantageous periods of stay in Portugal.

The holders of Golden Residence Permit for Investment Activity have the right to family regrouping, and may gain access to a permanent residence permit, as well as to Portuguese citizenship in accordance to the current legal provisions.