European Union: BREXIT: Consequences For UK Citizens Living And Working In Portugal

Last Updated: 6 July 2016
Article by Miguel C. Reis and Sara Estima Martins

Most Read Contributor in Portugal, December 2017

In a referendum held on 23 June 2016, a majority of the UK electorate voted for the UK to leave the EU. This event created a number of doubts as regards its consequences for EU nationals living in the UK, as well as for UK citizens and nationals living in other EU Member States, such as Portugal.

Further to the referendum and in order to start a formal process with the EU, the UK must formally notify the European Council of its intention to withdraw from the EU. Under Article 50 of the Treaty of the European Union, this is to be done in accordance with UK's constitutional requirements, which may arguably entail a prior vote by the British Parliament and/or its repeal of the European Communities Act 1972 (as amended by later legislation). Once the exit procedure has been triggered, the UK and the EU will negotiate an agreement setting out the arrangements for the UK's withdrawal. The negotiation phase must be concluded within a period of two years, which may be extended by means of an unanimous decision of all Member States.

During the negotiation phase, the UK will remain a Member State of the EU, with all the corresponding rights and duties. Nonetheless, this context naturally creates a period of uncertainty and doubts for companies, as well as for UK citizens living and working in other Member States and EU citizens living in the UK, in particular in respect of their rights of residence and the applicable employment and tax rules.


The UK's access to the single market and, as such, the future rules applying to the UK in terms of freedom of movement of goods, services, capital and persons is certain to be at the heart of its exit negotiations with the EU.

At this stage, it is not possible to anticipate the outcome of the negotiations. However, there are a number of potential scenarios as regards the freedom of movement of persons between the EU and the UK:

  • The EEA model (the so-called "Norwegian model") – This would apply if the UK joined the EEA. The EEA Agreement provides, inter alia, for the free movement of persons. Therefore, the position of current and future UK citizens living and working in the EU (including Portugal) would remain unchanged.
  • Bilateral agreement providing for broad access to the single market – In the case of a bilateral agreement specifically agreed between the EU and the UK, the free movement of UK citizens in the EU would depend on the specific terms of any such agreement. It is expected that any agreement granting the UK broad access to the EU market would entail the freedom of movement of EU citizens into the UK and vice-versa.
  • Other types of agreements – Any agreement not providing for privileged access to the single market by the UK will most likely not provide for broad freedom of movement of persons between the EU and the UK. In that case, the UK could place restrictions on the entry of EU nationals into the UK and, conversely, EU member states such as Portugal could limit the admission and stay of UK citizens.

If the rules on free movement of persons between the UK and the EU ceased to apply as a result of the exit agreement, it is nonetheless expected that special attention would be paid to the situation of UK citizens already living in a Member State – such as Portugal – and of EU nationals already living in the UK. A transitional or special regime protecting such cases could be part of the exit agreement.

In any case, the following options might be considered by UK citizens already living in Portugal, in order to secure their residence rights to the extent possible:

  • Certificate of residence – UK citizens who stay in Portugal for more than three months should register their presence with the municipal council (Câmara Municipal) in their area of residence.
    The registration certificate will be valid for five years, although it is uncertain at this stage if this certificate will still be valid once the UK actually leaves the EU.
  • Permanent residence certificate – UK citizens who have resided legally in Portugal for a continuous period of five consecutive years have the right of permanent residence. This also applies to family members who are nationals of a third state and have resided legally with the UK citizen in Portugal for a continuous period of five years.
    The right to permanent residence in Portuguese territory may be enjoyed before the completion of five-year period in certain exceptional cases, such as the case of workers or self-employed persons who, at the time they stop working, have reached the age laid down by the law for entitlement to an old age pension or workers who cease paid employment to take early retirement, provided that they have been working in Portugal for at least the preceding twelve months and have resided here continuously for more than three years.

Again, it is not absolutely certain that the permanent residence right will continue to exist after UK leaves the EU, but the chances of these situations being safeguarded by the exit agreement seem higher.

  • Portuguese citizenship – A UK citizen living in Portugal may apply for Portuguese citizenship if he/she: (i) is of age; (ii) has legally resided in Portugal for six or more years; (iii) has sufficient knowledge of the Portuguese language (A2 level – elementary); (iv) has not been convicted of a crime that is punishable under Portuguese law with imprisonment of up to three or more years; and (v) does not constitute a danger or threat to the security or national defence, for their involvement in activities related to the practice of terrorism.
    Complete citizenship applications usually take up to one year to be decided.

Under Portuguese law, the acquisition of Portuguese citizenship does not, by itself, entail the loss of the original citizenship.

Having Portuguese citizenship will fully guarantee all rights of UK nationals living in Portugal irrespective of the results of the exit negotiation between the EU and the UK.

Naturally, the Portuguese Immigration Act applicable to non-EU nationals – which would not be affected by the UK exit – could be used by UK citizens in the future. This Act sets out the rules on residence visas and residence permits, which, provided certain conditions are met, may be granted to foreigners who are employed or self-employed, and for setting up companies in Portugal, etc.


The possibility of UK citizens working in Portugal will depend on the results of the exit negotiations.

In the worst case scenario, if the UK exit entails the cancellation of the rights of residence of its citizens in EU countries, it may be cause for the subsequent nullity of the employment contracts of UK citizens in Portugal. As stated above, a transitional regime could nonetheless be adopted in order to allow UK citizens to obtain a residence permit under the applicable immigration rules.

To the extent UK citizens maintain their residence rights in Portugal, they will be able to continue working as employed or self-employed. Portuguese employment regulations will apply to UK nationals legally residing and working in Portugal in the same terms as they apply to Portuguese or EU nationals, with a few possible exceptions. Indeed, some additional formalities usually required in relation to non-EU nationals may come to apply, such as: the employee's obligation to indicate the identity of his/her beneficiary in case of death arising out of an accident at work or an industrial disease; the employer's duty to communicate the signing and termination of the employment contract to the Labour Conditions' Authority; the obligation to enter into employment contracts in writing. It is also uncertain whether the rules currently applicable to EU expats will still apply to UK expats after Brexit.


Concerning taxation of individuals, there will be no changes, since the law applicable on taxation of tax residents in Portugal is Portuguese law.This applies to both habitual and non-habitual tax residents.

Furthermore, following Brexit and unless the UK agrees to be part of the EU system, workers may be liable to double Social Security contributions both in the UK and in the EU Member State where they are working, as the UK will cease to be part of EU Social Security contributions system.

When it comes to taxation of resident businesses, Portuguese law will remain fully applicable (i.e., corporate tax, VAT, etc.), as will all conventions for the avoidance of double taxation (DTAs) in force, including the Portugal-UK DTA. The applicability of EU law on transnational transactions may or may not be changed, depending upon the negotiations for Brexit.

Nonetheless, it is possible that secondary EU law, such as EU Directives, will cease to apply to the relations between Member States and the UK. This could be the case of the Mergers' Directive, the Parent-Subsidiary Directive, the Interest and Royalty Directive or the VAT Directive. The Mergers Directive grants tax neutrality to certain restructuring transactions, provided certain conditions are met. As it is likely that this Directive will cease to apply, cross-border restructuring operations may become more burdensome. The Parent- Subsidiary Directive provides an exemption for inbound and outbound dividend payments between qualifying companies of different Member States. Therefore, the Portuguese participation exemption regime will continue to be applicable to dividend payments between Portuguese and British companies, but under different and possibly more restrictive conditions.

Furthermore, if the Interest and Royalty Directive, which provides for an exemption from withholding tax on interest and royalty payments between EU Member State companies ceases to apply, the Portugal- UK DTA remains applicable but allows withholding tax on cross-border payments (10% on interest and 5% on royalties).

In the case of indirect taxes and specifically the VAT system, supplies of goods from the UK to the EU or from the EU to the UK will qualify as imports and exports respectively (rather than intracommunity transactions), which will impact on VAT obligations. Some technical changes relating to the methods of reclaiming VAT from EU tax authorities (for instance, VAT incurred by businesses in other Member States of the EU) are likely to occur.

Finally, the provisions of many of Portugal's tax codes apply only to EU (or EEA) Member States and not to relations established with third countries. Given that fact, companies' current investments strategies should be revised in order to mitigate tax impacts of Brexit.

In any case, as stated by Portuguese Government officials, the UK always will maintain the Most Favoured Nation status it has enjoyed since the beginning of the Anglo (now British)-Portuguese Alliance in the late 1300s.

The Most Favoured Nation clause means a status or level of treatment accorded by one State to another in international trade, under which the recipient of this treatment must receive equal trade advantages as the «most favoured nation» by the country granting that treatment, including low tariffs or high import quotas. A country that has been accorded MFN status cannot be treated less advantageously than any other country with the MFN status by the promising country.

Download - BREXIT: Consequences For UK Citizens Living And Working In Portugal

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions