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Good question. If you work for a local company income tax is "steep". see: https://en.wikipedia.org/wiki/Taxation_in_Portugal https://en.wikipedia.org/wiki/Taxa

Good question. If you work for a local company income tax is "steep". see: https://en.wikipedia.org/wiki/Taxation_in_Portugal https://en.wikipedia.org/wiki/Taxation_in_Portugal Portugal has followed the "Nordics" model when it comes to taxes; income is taxed higher but services (healthcare, schools, roads and other infrastructure] is much better than in the US [or most of the rest of the world for that matter!]. The much cheaper lifestyle in Portugal more than makes up for the higher taxes. I'm not a "tax adviser" and HN is not the place for that "tax efficiency" advice. But you should consider setting up a Ltd Company and paying yourself/co-founders [Tax Free] dividends. I would [highly] recommend watching "Startup Legal Mechanics" [YCombinator Startup School]: https://youtu.be/BTShgZxiNV8 https://youtu.be/BTShgZxiNV8 tldr; start a company [separate legal entity].

galfarragem 8y ago
> paying yourself/co-founders [Tax Free] dividends. I'm not a tax expert but I don't think you can do it. Dividends are not tax free. You have to pay 28%(IRS) + ~20% (IRC) so in the end you pay more than a regular freelancer (for salaries below €80K). edit: except if you are a non-habitual resident..
- watoc 8y ago
  As a non-habitual resident in Portugal or Spain, it seems that the dividends are tax free if they come from a foreign source but you still have to pay taxes in the country of origin [1]. So maybe if you set up your company in another tax friendly country, you would be able to pay your corporate tax and taxes on your dividends there. [1]: http://www.newco.pro/blog/en/portugal-or-spain-two-tax-regimes-for-non-habitual-residents-to-consider-in-the-eu/ http://www.newco.pro/blog/en/portugal-or-spain-two-tax-regim...