Portugal Backtracks, Shifts To Strict Digital Nomad Policies

Portugal's immigration crackdown targets digital nomads and easy residency to address rising living costs for locals, but critics fear it hurts low-skilled workers, too.

Moving to Portugal to work just got a lot harder after its latest immigration reforms were announced to address the country’s rapid rise of digital nomads and international jobseekers.

In recent years, the country has been known for its welcoming stance towards digital nomads, which has inadvertently driven up the cost of living for locals in international hotspots like Lisbon and Porto.

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Rising costs of living for locals in popular nomad cities led to serious concerns for the country’s economy, which ultimately caused Portugal to close parts of its golden visa program last year. The program previously allowed foreigners to take up residency in Portugal if they purchased real estate.

Following that, lawmakers decided to end the non-habitual residency (NHR) tax in 2024, which had allowed foreigners to reside in Portugal for up to 10 years while paying a flat income tax.

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The new policy announced this week will tighten the country’s borders even more. Fortune reports that nearly 400,000 jobseekers are left uncertain about their residency status in light of the policy overhaul.

The Portuguese government is eliminating its “manifestation of interest” clause — which previously allowed non-EU nationals to migrate to Portugal without an employment contract.

This policy was especially beneficial for digital nomads and international workers in precarious jobs who could secure residency after making a year of social security payments while working remotely.

The elimination of this easy residency pathway represents a broader trend across Europe, where nations are increasingly reassessing their immigration and digital nomad tax policies.

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Proponents of these restrictive measures argue that they are necessary to prevent wealthy foreigners from inflating local housing markets, a chief concern supported by findings from Portugal’s Migration Observatory.

Young workers in Portugal are increasingly taking up multiple jobs or relocating abroad due to the high cost of living in cities like Lisbon, where house prices continue to rise.

Data from Statistics Portugal reveals that a record 250,000 residents, representing around 5% of the working-age population, worked at least two jobs in 2023. This figure has increased significantly since 2011 and reflects a growing financial strain placed on Portugal’s citizens.

Many critics worry that the latest policies disproportionately target low-skilled migrants, potentially leaving economic voids in sectors reliant on their labor.