Hiring foreign employees in Portugal: a guide to work permits and immigration compliance

As Portugal continues to attract international talent, companies worldwide seek to tap into its highly skilled workforce and strategic EU location. However, hiring foreign employees in Portugal, especially non-EU nationals, requires a clear understanding of immigration policies, legal obligations, and employer responsibilities. The process involves more than simply finding the right candidate; it also means ensuring your company meets every requirement for work permit sponsorship, tax registration, and immigration compliance.

This article is designed for international businesses and HR leaders, not individual job seekers. Whether hiring remotely or building a team on the ground, this guide walks you through the Portuguese work permit system from an employer’s perspective.

You’ll learn about sponsorship duties, legal risks, compliance processes, and how a Portuguese Employer of Record (EOR) can help you hire foreign talent without setting up a local entity.

Overview of Portugal’s work permit framework

Portugal’s immigration framework differentiates between EU/EEA nationals, who have the right to live and work in Portugal without a visa, and non-EU nationals, who require formal authorisation.

If you’re hiring a non-EU or non-EEA candidate, they must obtain a residence visa with work authorisation before starting employment. Several visa types are available depending on the role and company structure:

• The residence visa for subordinate work (for regular employment)
• The Tech Visa (a fast-track option for tech companies hiring highly qualified professionals)
• The D7 Visa, often used by freelancers or remote workers (but not appropriate for formal employment unless sponsored)
• Intra-company transfer visas (for multinationals relocating staff to a Portuguese branch)

Employers must provide a formal employment contract, comply with national labour standards, and register with Portuguese authorities to sponsor one of these visas.

Employer sponsorship obligations

Sponsoring a foreign employee in Portugal is a formal legal process that goes well beyond simply making a job offer. Employers are required to prepare and submit a comprehensive set of documents to the Agency for Migration and Integration (AIMA), formerly known as SEF, for pre-approval before the visa application can proceed. This documentation must include a fully signed employment contract, a formal declaration of the company’s intent to hire the individual, and supporting information that verifies the company’s status and operations.

In addition to submitting this paperwork, the employer must meet certain legal and administrative conditions to be eligible as a visa sponsor. The company must be officially registered in Portugal and operate within the legal framework recognised by Portuguese authorities. If the business is not incorporated locally, it must work through a registered local representative or a licensed Employer of Record (EOR) that can act as the formal legal employer.

The employment contract itself must be valid under Portuguese labour law and clearly specify all key terms, such as the employee’s role, responsibilities, salary, work hours, benefits, and duration of employment. Authorities also require proof that the company has the financial stability and operational capacity to support the employment relationship. This includes showing the ability to pay wages, provide benefits, and maintain a lawful work environment.

Moreover, the employer must demonstrate that it adheres to Portuguese employment regulations, which include minimum wage laws, social security contributions, and—where applicable—compliance with collective labour agreements that govern specific industries.

Only after the AIMA reviews and approves the application can the employee begin the next phase, which involves submitting their visa request at a Portuguese consulate in their home country. The employer’s early diligence and compliance are critical to securing this pre-approval and ensuring a smooth transition into Portugal’s legal workforce.

Legal and HR compliance requirements

Employers are responsible for ensuring that all foreign workers, regardless of nationality, are employed by Portuguese labour law. This means providing equal rights and protections, including safe working conditions, fair pay, and access to social security.

Upon hiring, employers must register the employee with:

• Segurança Social (Portugal’s social security authority), which manages pension, unemployment, maternity, and sick leave contributions.
• Autoridade Tributária e Aduaneira (the tax authority), to ensure the worker receives a NIF (tax identification number) and is taxed appropriately.

Salary must be paid at or above the national minimum wage, depending on the job role and contract terms. Failure to comply with labour standards or register foreign employees properly can trigger audits and penalties.

Work visa processing times and challenges

Employers should be aware that processing times for Portuguese work visas can vary significantly depending on several factors. On average, the journey from securing pre-approval to issuing the visa takes around 8 to 12 weeks. However, this timeline is not guaranteed. Delays are common and may arise from administrative bottlenecks, both within Portugal and at consulates abroad.

One of the leading causes of delay is incomplete or inconsistent documentation. This often involves discrepancies in employment contracts, missing company registration details, or documents not correctly signed or verified. Translation issues can also slow the process, mainly when contracts or supporting materials are not submitted in Portuguese or translated inaccurately.

Regional differences in processing capacity can also contribute to wait times. Some immigration offices and consulates face higher application volumes or staffing limitations, which can contribute to longer wait times.

Employers should ensure that all documentation is carefully prepared in advance to help avoid these issues. Contracts and supporting materials must be formatted correctly, translated by certified professionals if needed, and fully aligned with AIMA’s requirements. It’s also important to include a detailed job description, salary information, and proposed start date in the submission.

Proactive communication with the consulate and AIMA can make a difference, especially if the application appears stalled. Regular follow-ups help identify and resolve issues early, keeping the process on track.

Employer penalties for non-compliance

The consequences of hiring foreign workers without following the correct procedures are significant. Employers can face:

• Administrative fines of up to €10,000 per violation for employing someone without valid authorisation.
• Backdated social security and tax contributions, including penalties and interest.
• Legal liability for misclassification, such as treating a full-time employee as a freelancer to avoid sponsorship.
• Damage to business reputation, including inclusion on government watchlists or loss of future hiring privileges.

Compliance is not optional; authorities are increasingly enforcing labour and immigration laws, particularly in sectors like hospitality, construction, and tech.

Drafting compliant employment contracts for foreign hires

An employment contract submitted as part of a work visa application must be legally valid and fully compliant with Portuguese labour standards. It should include:

• Job title and detailed description of responsibilities
• Salary (in euros) and benefits
• Working hours and work location
• Duration of employment (temporary or open-ended)
• Holiday and leave entitlements
• Termination and probation period clauses

If needed, all contracts should be written in Portuguese and translated into the employee’s language. Ensure that signatures, dates, and formatting meet the standards required by immigration authorities, as poorly formatted contracts frequently cause rejection or delay.

Social security and tax contributions for foreign employees

Employers and employees must contribute to Segurança Social, which covers healthcare, unemployment, and retirement benefits.

• Employers contribute 23.75% of the employee’s gross salary.
• Employees contribute 11%, withheld at source.

Moreover, employers must:

• Withhold IRS (income tax) from the employee’s salary and remit it monthly.
• Report earnings to the tax authority.
• Provide a payroll summary and proof of contributions for visa renewals or audits.

Foreign employees may qualify for non-habitual resident (NHR) tax status, which affects their personal tax rate, but this does not reduce the employer’s obligations.

How an Employer of Record (EOR) simplifies immigration compliance

Companies that don’t have a legal entity in Portugal often face barriers to sponsoring foreign workers. This is where a Portuguese Employer of Record (EOR) can help.

An EOR acts as the legal employer on your behalf, handling all employment-related responsibilities while you manage the employee’s day-to-day work. This includes:

• Sponsoring the work visa and coordinating with AIMA/SEF.
• Drafting and signing compliant Portuguese employment contracts.
• Managing payroll, taxes, and social security contributions.
• Handling onboarding, benefits, and visa renewals.
• Ensuring ongoing compliance with labour law and immigration rules.

For example, a US-based SaaS company wanted to hire a Brazilian data analyst in Lisbon but didn’t have a registered subsidiary. Through a Portuguese EOR, they were able to sponsor the work permit, onboard the employee legally, and manage all HR and compliance obligations without setting up a local entity.

Recent changes in Portugal’s immigration policies

In 2023 and 2024, Portugal introduced several changes aimed at streamlining immigration and attracting skilled workers. Notably:

• The AIMA (Agency for Migration and Integration) replaced SEF for handling work visa applications and compliance.
• The digital nomad visa was launched, allowing remote workers with high incomes to reside in Portugal, though it does not replace employer-sponsored permits.
• Updated rules require excellent employer documentation and rigorous compliance with social security and tax obligations for all foreign hires.

Employers should remain up to date on policy changes to avoid non-compliance.

Work permits are easy with EOR

Hiring foreign talent in Portugal can help companies expand their reach, access new skills, and grow in a competitive European market, but it comes with serious responsibilities. Employers must navigate a complex framework of visa sponsorship, contract compliance, tax registration, and social security contributions.

For companies without a local presence, working with a Portuguese Employer of Record (EOR) provides a fast, compliant, and efficient route to hiring non-EU workers legally, without the need to incorporate locally.

Need help hiring foreign talent in Portugal? Contact us to learn how our Employer of Record service can simplify immigration compliance and ensure a smooth onboarding experience.

Are you an employer hiring foreign talent in Portugal? Read our comprehensive guide to immigration policies and work permits for companies.

Are you a foreign worker looking to move to Portugal? Explore our complete guide to work permits and visas for expats for step-by-step instructions and requirements.

This article was published in May 2024 and updated in May 2025.