What you need to know – Practical advice
Adopted by the Parliament in January 2012, the reform of the Portuguese Labour Code has radically amended the labour regulations in Portugal, bringing it closer to the legislation of most European countries.
French expats have the right to work as employees or self-employment workers on an equal footing with nationals.
- Legal minimum age: 16 years old
- Statutory working time: 40 hours a week
- Legal retirement age: 65 years old
- Days not worked: Saturday and Sunday
- Duration of leave: 22 working days
- Number of public holidays: nine national holidays and one municipal holiday
Minimum wage as at 1 January 2013: 485 euros over 14 months (i.e., 565.83 euros over 12 months).
As a rule, employees can work overtime, but no more than two hours during normal working days and no more than eight hours on weekly rest days or holidays.
The number of overtime hours cannot be more than 175 hours/year for SMEs and 150 hours/year for large companies.
The first additional hour is increased by 25 %, subsequent hours on working days by 37.5 %, and on weekends and bank holidays by 50 %.
All employees signing an open-ended contract (CDI) are entitled to 22 days off/year, which can be taken separately or consecutively. However, the law requires the employee to take at least 10 consecutive days off.
For fixed-term contracts (CDD), leave entitlements depend on the duration of the contract:
- If the duration of the fixed-term contract is less than one year: the number of days off is two days per each month worked;
- If the duration of the fixed-term contract is greater than one year: days off are the same as for an open-ended contract, i.e., 22 days off per year.
Social security in Portugal is not as extensive as in France. It is therefore recommended that you take out additional insurance (private insurance or voluntary insurance reserved for expats). The extent of the coverage depends on the employee’s status.
Posting: entitlement to French social security
Article 14 of Council Regulation (EEC) 1408/71 authorises posted workers in Portugal to receive a wage or salary for a period of 12 months, renewable once. The paid worker continues to be covered by social security in France and must pay his or her contributions in France.
Local contract or expatriation: Portuguese social security
Depending on the type of recruitment, the employer may suggest a local contract or an expat contract. In both cases, the employee is mandatorily subject to the Portuguese social security system in the same way as nationals. The employee may constitute supplementary social security by taking out voluntary insurance specific for expats (for example, Caisse des Français for French nationals abroad, Groupe Taitbout, CRE-IRCAFEX). Note that as regards local contract, and depending on the type of employment, the salary may be less than that of a French contract.
Specific cases: trainees and VIEs (French International Traineeship Programme)
All French students can initiate a traineeship in Portugal under the Community provisions for the coordination of social security schemes. If the traineeship lasts more than three months, the trainee must obtain an application form – E 109 – from a French social security agency so that he or she can benefit from the all the social services of the host State.
As regards the VIEs, Ubifrance, through a private insurance firm, is responsible for the insurance cover.
Registering with the Portuguese social security
Work applicants are advised to apply for a social security number at the Loja do Cidadão. This is a purely administrative procedure that does not entitle the applicant to any rights until he or she has signed the work contract and has not been referred to social security by the employer. It is up to the employer to take care of this if the hired candidate is working for the first time in Portugal. Each insured person is given a unique registration number which must be kept for life.
Employment contract – particulars
In accordance with Article 11 of the new Portuguese labour code, a work contract is defined as “a contract by which a person undertakes to work, in return for a sum of money, for one or more persons in their organisation and under their authority”
The following are the existing types of contracts in Portugal:
- Open-ended contract
- Fixed-term contract
- Temporary employment contract
- Part-time contract
- A part-time contract corresponds to a weekly working time of less than 75 % of the legal working time (40 hours). The contract must mention the exact number of working hours.
This status can be compared to that of self-employed worker in France. The person hired on recibos verdes issues a receipt at the end of each month in return for his or her remuneration. There is no work contract in recibos verdes and, therefore, no reciprocal obligations between employer and employee.
Registering a business – particulars
The commercial companies code, established by Decree-law 262-86, of 2 September 1986, provides for various types of companies. The two most common forms are Sociedade por quotas (Lda) – private limited company – and Sociedade Anónima (SA) – public limited company. Lda refers especially to SMEs, while SA refers to larger companies.
The “sole proprietorship” company
- Sole proprietorship
Sole proprietorship (entreprise individuelle under French law): managed by a single person, limited responsibility, blurred distinction between personal property and professional property, no minimum capital required;
The legal person company
- Sociedade por quotas de responsabilidade limitada Lda – private limited companies (SARL under French law)
This is the most widespread type of company (about 95 % of Portuguese companies) for legal and tax reasons, but also because of its flexibility.
- Other forms of companies
The forms of companies apply mostly in the context of expanding an existing activity in France and in particular to the transitional phase leading to the setting up of a subsidiary. We can in fact simply open a liaison office (escritório de representação) or a branch (sucursal).Contact us to find out more