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Discussion Starter · #1 ·
Hi there

I was wondering if anyone had any experience or thoughts about any of the following:

1. Operating a UK company from Portugal in general - it still needs a registered address in the UK but for all intents and purposes can it operate from here? Are there any issues with the Portuguese authorities about doing this?

2. Employing Portuguese employees through the UK limited company - mainly the tax implications for employer and employee. In theory this seems fairly clear cut in that the employee, if they are non-UK resident, can be set up not to pay PAYE in the UK, but then what is the mechanism for them to pay tax here and, perhaps more importantly, social security, etc?

Any guidance would be appreciated - am a little confused. Setting up a PT company seems a little awkward, especially as the UK company is working for UK clients and would benefit from keeping the status quo. However, am in the fortunate position to be expanding and want to find out the most sensible way to do this.

Many thanks
 

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It depends on your field. First big problem would be the minimum wage here is much lower than the UK standard, so you would need to sort out that first. Then the taxman here would definitely want a slice regardless of where you operate from if the profits are being made here. Finally if you need any workers who speak 5 languages, drop me a pm.
 

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Discussion Starter · #3 ·
Thanks. I've already got the staff - that's not the problem, just finding a better mechanism to pay them as, for them, a freelance/contract isn't particularly secure, even if it's the most hassle-free way for me as an employer. Minimum wage shouldn't be a problem in this case as it's fairly highly skilled work.

I guess it's the legal ramifications of operating a company here without the PT state getting the benefit, though indirectly they benefit as the employees would be paying tax here and spending their wages for jobs which otherwise wouldn't exist...
 

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Surely the approach should be to operate the company in the most beneficial cost, tax and employment fashion, a freelance/contract isn't the most secure for the worker, but more cost effective for the company and a healthy company is more likely to succeed and prosper and be able to react to market conditions, expand and offer further employment.

You really need to consult an accountancy firm with UK & Portuguese connections to get the best advice.

1. Sounds as if your resident here, so your problem is how your paid and who you pay S/S too.
2. Your Portuguese staff would be employed on "Green Receipts" and would pay S/S etc monthly
 

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Discussion Starter · #5 ·
Yes, healthy company more likely to succeed but happy, stable workers likely to be more productive :)

Any tips for firms that can do both of these things? I've found a good PT-ony firm, and the guy I know who does both was a bit difficult to pin down in terms of hiding behind the smoke and mirrors and legalese of it all. I need someone down to earth!

Many thanks!
 

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Green receipts are a normal way of employment here, currently think there'd be more happy to have a job than not.

Not in Lisbon afraid, why not ask Embassy they have a trade section.
 

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Discussion Starter · #9 ·
Sorry to join the receibos verdes gang but employer plus employee SS runs to such a high level that few people could afford to payroll staff these days!
Thanks for the help everyone. It is a tough one...

It does seem I can employ them as employees of my UK company but without PAYE, and they can pay tax here. Which all seems very complicated.

Receibos verdes does sound attractive if a possibility... Whatever happens someone has to pay the tax - what they care about is their take-home amount.
 

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What's complicated, your employees are responsible for their own tax & Social Security, you obviously must abide by Portugal's employment laws, but it gives any company flexibility and better ability to ride the current economic problems.
The one downside for you is if the employee earns + 10,000€ they have to charge IVA so you should bear that in mind when employing people.

Two sites that explain "Green Receipts from an employee's perspective
Recibos Verdes
Recibos Verdes

the nuts & bolts of filing "green receipts with Financas
Portal das Finanças - Recibos Verdes Electrónicos

and a very recent article
Recibos verdes. Quem ganha mil euros passa a receber apenas 598
 
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