Moving to Portugal as an English teacher will most likely be one of the biggest challenges in your life. Your resilience to overcome the numerous obstacles (of various natures), along the way, will determine your success in moving to Portugal as an English teacher.
In this post, we will highlight the top 10 real challenges for you to consider before permanently moving to Portugal as an English teacher.
What are the tax rates for employed English teachers in Portugal?
Unlike other peripheral economies in Europe, the Portuguese tax authority taxes residents on their worldwide income. This includes any person rightly, or wrongfully, deemed as a tax resident in Portugal.
Moreover, even if you don’t reside in Portugal for 183 days per year, owning real estate, receiving payments/shares or regular proceedings from investments in the country, will oblige you to file a tax return as a ‘non-resident’.
As a non-resident for tax purposes, you’ll generally be paying 28% on all of your NET income generated in Portugal.
Alternatively, you might be eligible for the special Portuguese non-resident tax regime called ‘Non-Habitual’ resident. Under this regime, your tax bill will be 15% on your worldwide income, for a period of 10 years (Source: OECD). Taxes are applicable whether or not you will be actually residing in Portugal for that period of time.
Although the Portuguese agency “benefits” you with a lower tax rate (15% instead of 28%), you will automatically become a tax resident of Portugal for 10 years, liable for income tax on your worldwide income.
What are the income tax rates for residents of Portugal?
For 2020, the personal income tax brackets (also known as progressive rates) for tax residents in Portugal are as follows:
- Earned income up to €7,112 – 14.5% (no deductions accepted);
- From €7,112 to €10,732 – 23% (deductions with approved expenses up to the amount of €604,54);
- From €10,732 to €20,322 – 28.5% (deductions with approved expenses up to the amount of €1194,80);
- From €20,322 to €25,075 – 35% (deductions with approved expenses up to the amount of €2515,63);
- From €25,075 to €36,967 – 37% (deductions with approved expenses up to the amount of €3017,27);
- From €36,967 to €80,882 – 45% (deductions with approved expenses up to the amount of €5974,54);
- Above €80,882 – 48% (deductions with approved expenses up to the amount of €8041,21);
What is the most adequate tax regime for non-residents with investments in Portugal?
Please always consult with a solicitor or an accountant before moving to Portugal.
Whilst you have the benefit of a lower tax rate under the ‘Non-Habitual’ regime, you will be locked in to their tax system for a decade (whether or not you live in Portugal).
Therefore, if you don’t intend to live in Portugal long-term, our suggestion would be for you to go with the non-resident regime and pay the 28% rate on you NET earnings.
Does Portugal have a wealth tax?
Portugal’s newly introduced wealth tax is, essentially, an extension of Portugal’s Imposto sobre Imoveis (IMI), or property tax. This taxed is charged on the value of the real estate portfolio in Portugal, regardless of where the owner resides.
How much do I have to pay?
It is an annual tax of 0.3% for Portuguese properties worth EUR 600,000; married/civil partners are granted a combined threshold of EUR 1,200,000.
This wealth tax can be offset against the payable tax derived from property rental income, provided you pay taxes in Portugal at the progressive rates (see above).
Is the tax-free threshold available to everyone?
The tax-free threshold is typically available to individuals and estates, and certain company properties used for commercial, industrial or agricultural purposes. Certain companies are not eligible, in which cases the threshold does not apply.
Do I need a fiscal representative in Portugal?
For those Non-EU citizens who have regular income arising in Portugal (e.g rental income), and whose residency is outside Portugal, it is strictly mandatory to appoint an eligible fiscal representative.
Furthermore, you’ll be required to have a fiscal representative when you are absent from Portugal for a period exceeding six months provided that you obtain regular (passive) income in Portugal that’s subject to Portuguese taxation.
For a non-resident to start the process of appointing a tax representative in Portugal, taxpayers must have a Fiscal Number (“NIF”) and a password (“senha”) to be identified on the Tax Agency’s webpage (Portal das Finanças).
What are the responsibilities of a fiscal representative?
The Fiscal Representative is legally responsible for informing you (the taxpayer) about your obligations and any charges that are applicable derivative from your fiscal situation in Portugal. The main purposes are:
- To ensure that there is a contact person within Portugal to manage your tax affairs.
- To ensure that payments are made within the required deadlines.
As a D2 Visa applicant, do I need a fiscal representative?
D2 visa applicants (foreign investors) are required to have a fiscal representative.
Any foreign nationals wishing to establish self-employment as a sole trader, or set up either an individual or limited liability company, are required to appoint a fiscal representative for VAT, as the Portuguese Tax Authority considers them a VAT-Taxable person.
How much does an English teacher earn in Portugal?
Before moving to Portugal as an English teacher, most individuals want to know what’s the going salary in the country.
Depending on the avenue you take for teaching in Portugal, salaries will vary slightly, although the average monthly salary for teaching in Portugal is around EUR 1000.
Will Portuguese employers include accommodation in their salary packages?
Some private schools, may include boarding options in their salary packages, however teachers are usually expected to find their own accommodation.
What is the minimum salary in Portugal?
As of 2020, the official minimum salary in Portugal is of 635 euros per month. In the Portuguese islands, Madeira and Azores, the official minimum wage is slightly higher than the rest of the country. (Source: Economias (in Portuguese)).
Regretfully, the official minimum salary in Portugal is the lowest in Western Europe. It is even lower than some countries in Central Europe, such as Slovenia.
Are Portuguese good drivers?
Not at all.
One of the first things you will notice about Portugal is just how atrocious the Portuguese drivers are, and how many accidents you actually see. It is a talking point among expat communities, and if you think this is just a bit of Portugal bashing, you’re wrong. It is a deadly serious issue.
Unfortunately, driver behaviour and, in turn, road fatalities, shape the reputation of Portugal. This is predominantly because of their lack of understanding on how to use a roundabout. It does not help that the country is built on roundabouts of multiple lanes, totally superfluous given the size of the population. Whatever happened to good old fashioned traffic lights?
How do I get a work visa before moving to Portugal as an English teacher?
Before moving to Portugal as an English teacher, you must check if you need a Portuguese work visa with a Portuguese Consulate or Embassy in your country before making arrangements.
Different embassies will have slightly different processes. It’s important for you to check their requirements beforehand. Some will offer appointments while others might work on a ‘first come, first served’ basis.
Self-employed workers can undertake work with a third-party employer, however, they will need to get a residence permit for employees first.
Do EU Citizens need a work visa?
In most cases, EU citizens won’t need a work visa, but will have to register with the Foreigners and Borders Service and apply for a residence card if they intend to stay in Portugal for more than 6 months. For non-Eu citizens the story is a bit different. Check out SEF.
According to Portal da Queixa (Portugal’s #1 Complaints Portal), between 1 January and 29 February 2020, 126 complaints were sent to the platform about SEF, while in the same period of 2019, only 50 complaints were received. The average of the data reveals that, in the analysed period, at least two complaints were made against the SEF per day.
If they are rude or unprofessional to you, please demand to be provided with the complaints book. They are obliged, by law, to provide it on request. Complaints can be written in either Portuguese and English.
What is Portugal’s Golden Visa?
The ‘Golden Visa’ is a residency by investment program for wealthy investors. This visa, which entitles you to bring your family and ultimately apply for Portuguese citizenship if required, comes with a hefty investment of EUR 500,000 or the creation of more than ten jobs. Applications can be made online.
Are there any online platforms for freelancers in Portugal?
Is it difficult for non-EU/EFTA citizens to get legalised?
Yes. Portugal currently has quotas in place to drastically limit the number of jobs that go to third-country Non-EU nationals with the purpose of improving employment opportunities for EU nationals.
In fact, the vast majority of jobs need to be advertised to Portuguese and EU/EFTA citizens for 30 days before they can be freely filled by non-EU employees. This is compulsory so please ask your employer about it..
Am I able to apply for a work visa from within Portugal?
Due to bilateral agreements, citizens of the USA, Canada, Australia, New Zealand, Japan and Israel are able to apply for a work visa from within Portugal, within 90 days of arrival. All other non-EU nationals will need to apply before moving to Portugal as an English teacher.
If you secure work in advance of your travels, your employer can apply for the permit on your behalf at their local labour office. Once you arrive in Portugal to teach, you will need to get your Residency Card. This official legal document is mandatory for ALL Portuguese residents and it can be obtained from SEF.
Do I need to secure a job before applying for this visa?
Circumstances vary depending on your nationality and the nature of your job in Portugal. As your Portuguese work permit is closely linked to your residency status, in most cases you cannot apply until a teaching job in Portugal has been secured.
What documents do I need for my Portuguese work visa?
Along with your Portuguese work visa application form, you will need to provide the following:
- Passport photo
- Passport and copies of your previous visas
- Flight reservation details (including return flight)
- Medical insurance policy covering expenses up to EUR 30,000
- Proof of accommodation
- Employment contract between you and your employer
Is it the same visa process if I want to do freelance work?
Non-EU/EFTA residents wanting to set up a small business or pursue freelance work in Portugal go through the same process to get a Portuguese resident visa as employees.
However, the residency permit you will be granted is specific to self-employed workers, requiring extra documentation pertaining to your business activities and business, or self-employment registration with the tax office.
What are the minimum requirements to be an English Teacher in Portugal?
Accredited TEFL Certificate or Diploma
As with most opportunities in Europe, these positions are competitive and schools generally look to hire teachers with an accredited TEFL Certificate or Diploma.
Professional experience for Portuguese run public/private schools
A minimum of 100 classroom hours.
Professional experience for International Schools
International schools often look to hire teachers with a minimum of two years worth of relevant teaching experience.
How bureaucratic is Portugal?
Before moving to Portugal as an English teacher, bear in mind that bureaucracy in Portugal is ridiculously painful and, quite frankly, an impediment to investment.
Of course this does not have much effect on you if you’re on a tourist visa. But if you’re a citizen, permanent resident or investor in Portugal, dealing with the administration is a part-time job in and of itself.
Doing anything requires stacks of documents and endless photocopies (for some reason the Portuguese state loves photocopies) sent by registered mail.
The bureaucracy frequently loses or misplaces your file or rejects it for no reason, leaving you to wonder what on earth happened.
Even though they may lose or burn your dossier, you are still responsible for getting your paperwork done on time with civil servants having zero sympathy. And no, in most cases you cannot apply for your residency permit (or health insurance, or housing assistance) online.
This fondness for paperwork extends into private sector tasks too, and you will have to produce a ton of paperwork just to open a bank account or get a library card. This backwards mentality constantly, and rightfully, impedes the rise in foreign investment.
Portugal ranks above the OECD average in housing, work-life balance, personal security and environmental quality, but below average in income and wealth, health status, social connections, civic engagement, education and skills, subjective well-being, and jobs and earnings (Source: OECD).
Regulations and poor administration is, continuously, holding back Portugal, Ireland, Italy, Greece and Spain’s economies, as illustrated here.
Is corruption a real issue for English teachers in Portugal?
The Portuguese director of OECD, Mr. Alvaro Santos Pereira, and former cabinet minister of the previous PSD-CDS coalition government, has recently stated that Portugal has a clear culture of impunity promoted by corrupt politicians (Read in Portuguese: SAPO). He went on to say that he was pressured by the Portuguese government to hide recent OECD’s reports on findings of corruption in Portugal.
Corruption is reportedly widespread in Portugal’s public procurement sector too. Companies perceive favoritism in decisions of government officials and diversion of public funds to be common (GCR 2017-2018). A significant majority of companies believe that corruption is common among both national and regional authorities (Source: European Commission, Feb. 2014).
Procedural irregularities that lead to abuses in the awarding of public tenders are a recurring problem for the municipalities, and represent a potential risk to private companies (Source: EUACR 2014).
For instance, more than one-third of Portuguese companies refrained from taking part in tenders due to the perceived tailor-made criteria, while almost half report that corruption prevented them from winning a tender or contract (European Commission, Feb. 2014).
Around one-third complained of impossible deadlines, collusive bidding and of deals being agreed upon beforehand, while more than two-thirds reported conflicts of interest in the evaluation of bids, and abuse of emergency grounds to get around competitive procedures (European Commission, Feb. 2014, EUACR 2014).
The recent scandal involving Angolan elites (known as the Luanda Leaks) and the lack of due diligence demonstrated by the banks clearly shows the level of promiscuity and corruption within Portugal.
Before moving to Portugal as an English teacher, ensure that your future employer is properly registered as a business and that they have been paying their teachers accordingly.
Only a country with passive/submissive citizens would allow their prime minister to write off a debt of 225 million euros to the president of the football club ‘Sport Lisboa and Benfica’ for debts accummulated at the ‘Novo Banco’, which was bailed out with tax payers’ funds.
Portugal’s prime minister, Mr Antonio Costa, had the audacity to endorse his candidacy to the presidency of the club. This is the promiscuity of politicians in Portugal.
What is the banking sector like?
The last three major bank bankruptcies: BPN, BES and BANIF have cost taxpayers an estimated amount of 372 million euros (Source in Portuguese: Bancos falidos vão custar mais de mil milhões de euros em 2018). From ripping off migrants to manipulating their accounting records with the cooperation of the Bank of Portugal (‘Banco de Portugal’), the major players in the Portuguese banking system are the epitome of the widespread corruption in the country.
Consequently, we recommend you not to open a bank account with Portuguese banks. Set up an account with Transferwise instead. This way you will be able to receive and pay money out of your Transferwise account, completely free of charge, even before moving to Portugal as an English teacher.
Can I rely on the Portuguese legal system?
No. The inefficiency of the Portuguese legal system – including the appeal courts – is well known to practitioners and investors alike.
According to the statistics made available by the Department for Justice Policies (source: DGPJ), the number of appeals that are finalised each year in Portugal’s appeal courts has slightly risen from 33,930 to 35,776 in three years.
The number of cases that have entered the system has increased from 33,634 to 36,661 in the past 3 years.
Unsurprisingly, the efficiency improvements are seen as weak and are outweighed by the increasing demand, fuelled by years of economic stagnation within Portugal.
Although practitioners, politicians and investors agree that the inefficiency of the court system impairs investment and growth, it seems unlikely that the reforms and investment needed to turn the situation around are close at hand.
How does Portugal compare with the rest of the EU nations?
According to the 2017 EU Justice Scoreboard, the average time for a first-instance court to rule on a commercial or civil case in Portugal is just over 700 days. This means that it is common to see cases in first-instance courts drag on for three to four years, or even more.
This is because of the inefficiency of the system as a whole, as well as a high number of pending cases.
Portugal is also among EU countries with the highest score in the number of pending civil and commercial cases, with 12 cases per 100 inhabitants, against just 2 in France and 6 in Italy.
How Does Portugal treat foreign expats?
During its ‘golden years’, Portuguese vessels carried an estimated 5.8 million Africans into slavery.
Portugal was the first European country to attempt to conquer and exploit Africa, establishing many forts along the coast and treaties with heads of state, in order to help them enable this trade. Initially the trade developed with Portugal as the hub of business, with goods and slaves being traded through its capital Lisbon. The slaves were moved to cities such as Lisbon, Évora and areas such as the Algarve.
A 2016 report by the United Nations Committee on the Elimination of Racial Discrimination states that, while Portugal had grown more tolerant and inclusive over the previous two decades, the existence of “Afrophobia” and “institutional racism” in the country are extremely prevalent.
For Moreira, member of parliament for Livre, it came as no surprise: “This is very specific of Portuguese racism – the absolute denial that there is racism in Portugal.”
In February this year, FC Porto striker Moussa Marega, who is from Mali, was visibly angered by monkey noises aimed at him after he scored Porto’s second goal in a 2-1 win at Guimarães in the Portuguese football league.
But when Marega started to walk off the field, several players from both his own side and Guimarães appeared to argue with him. Porto coach Sérgio Conceição also went on the field and spoke with Marega. It took Marega several minutes to leave the field.
The upset player held his thumbs down at the crowd as he went into the tunnel to the changing rooms. The crowd responded with loud jeers.
The attitude of both the fans and other players has drawn criticism on social media.
On a personal level, I witnessed racism against my husband at a Tax Agency in Loures by a public servant. Whilst my husband is a white male from a developed country, he was the subject of racial abuse by a female public servant, who repeatedly made high derogatory comments about his country. When he asked her to stop the highly inappropriate remarks, she persisted in abusing him, even though he suffers from Asperger’s syndrome.
Ridiculous charges / Taxes
The below screenshot shows the three added taxes that EPAL Lisbon adds to one’s water bill every month:
Electricity prices per kWh are much higher in Portugal than in countries like Australia, New Zealand, Singapore. According to Global Petrol Prices, in December 2019, the price of kWh in Portugal was 0.314 U.S. Dollar for households and 0.172 U.S. Dollar for businesses.
Comparatively, the average price per kWh in the world, during the same period, was 0.14 U.S. Dollar per kWh for households, and 0.13 U.S. Dollar for businesses.
While Portugal is a great country for tourism, a holiday is vastly different from living in the country.
Due to the systematic corruption and high taxes, it would be difficult to survive on the average English teacher’s salary in Portugal. The rent prices in Lisbon have been skyrocketing for the past decade. According to Uniplaces, the average price of a room in Lisbon is 346 euros.
The Goods and Services Tax (GST) is 23%, one of the highest in the European Union. Similarly, the income tax rate for non-residents is 28%.