Requirements for Foreign Employees to Work
A general principle foresees that expatriates working on work permit are granted equal rights and obligations as national employees – requires a written form of the employment contracts with expatriates working on work permit (non-EU). In accordance with the law, companies must assure the candidate holds a residence visa or permit specifically granted for carrying out a professional activity as employee in Portugal. In cases where the employer has the intention to employ a foreign citizen (non-EU) currently living abroad, a statement confirming that the employment offer is included in the legal defined quota or that no quota has been set and that no preferential candidate (Portuguese, EU citizen) was found to perform the job shall be issued by the Portuguese Institute of Employment and vocational training and delivered to the candidate for submission together with the visa request. For the same purpose, the employer shall also provide the candidate with an employment contract or promise of employment contract.
Does a Foreign Employer need to Establish or Work through a Local Entity to Hire an Employee?
Foreign employers are not necessarily required to establish or work through a local entity to hire employees. From a corporate perspective, and as a rule of thumb, if engaging local employers means that the foreign employer is intending to exercise its business activity in Portugal for more than one year, then a local permanent representation should be incorporated, adopting the form of subsidiaries or branches. In addition to the permanent establishment issues – and the interconnected corporate tax issues – having employees working from Portugal will, nevertheless, trigger new procedures and obligations that require measures to be taken with regards to: i) accident at work insurance; ii) social security benefits and contributions; and iii) employee income tax issues.
Limitations on Background Checks
There are some legal restrictions on conducting background verifications on job candidates and employees such as drug tests, financial and credit checks, criminal checks, academic qualifications or previous employments. Some legal restrictions also apply to conducting health checks and to selecting a candidate on the basis of health information. Under data protection laws, personal data must be maintained only for the period strictly required.
Restrictions on Application/Interview Questions
Restrictions on applications and interview questions are in line with the limitations on background checks related to the candidate’s private life and on the candidate’s health or pregnancy.