Update 2026
Challenges in the Correct Treatment of Social Security
In a globalised economic context, it is increasingly common for Portuguese companies to send employees abroad (expatriates) or to welcome foreign professionals to Portugal. Although strategic for international growth, these situations require strict control of social security obligations, under penalty of fines, contribution debts or loss of social protection for the worker.
Dealing with these situations correctly requires knowledge not only of Portuguese legislation, but also of European Regulations (EC) No. 883/2004 and 987/2009, Bilateral Social Security Agreements and the updates introduced by the 2026 State Budget, which reinforces the digitisation of procedures and cross-checking of data between countries.
1. What is an expatriate worker?
An expatriate is considered to be an employee temporarily transferred to perform duties in another country (for example, a Portuguese national sent to Brazil for 12 months) or a foreign professional seconded to work in Portugal, either under a direct contract or through secondment from a foreign company.
Both cases raise challenges in terms of tax framework, documentary evidence, time limits and coordination between national regimes.
2. Main Challenges in Social Security Compliance
a) Choose the appropriate regime
The first step is to determine which Social Security regime is applicable. This depends on several factors:
- Whether there is a bilateral Social Security agreement between Portugal and the country in question;
- Whether the country is a member of the European Union/EEA or not;
- Whether it is a temporary assignment or a change of residence and contractual relationship.
Example:
- A Portuguese person seconded to Germany for 1 year will, as a rule, continue to be covered by Portuguese Social Security.
- A Brazilian hired directly by a Portuguese company will be subject to the general Portuguese regime, except if on temporary assignment and under the Portugal-Brazil Agreement.
b) Mandatory documentation: A1, certificates, agreements
For workers posted within the EU/EEA/Switzerland, it is mandatory to issue form A1, proving that they remain affiliated to the Portuguese Social Security system.
In countries with bilateral agreements, a posting certificate must be obtained from Social Security.
New for 2026: the Electronic Posting Register (RED) has come into force, allowing the digital submission of the A1 form and online monitoring of the validity and extension of postings, facilitating control by Portuguese and foreign authorities.
The absence of these documents may result in double taxation and fines for non-compliance.
c) Secondment terms and limits
The secondment regime has time limits:
- Regulation (EC) 883/2004: up to 24 months (extendable in certain cases);
- Bilateral agreements vary, but generally set limits between 12 and 36 months.
If the secondment exceeds the time limit, the worker may be required to register with the social security system of the destination country and will no longer be covered by the Portuguese system.
d) Collection and payment of contributions
When the employee remains covered by Portuguese Social Security, the company must continue to declare their remuneration through the Monthly Remuneration Declaration (DRM) and make the payment in Portugal.
In cases where the foreign regime is applicable, the company may have to register for local tax purposes and appoint a legal representative in order to comply with that country’s contribution obligations.
The 2026 State Budget strengthens the cooperation mechanisms between Portuguese Social Security and its EU counterparts, providing for more severe penalties in the event of failure to register or comply with reporting obligations.
3. Additional Issues to Consider
a) Variations in Social Security Protection
Not all countries guarantee the same rights (maternity, sickness, accidents at work). In cases where there are gaps, it is advisable to take out supplementary private insurance, especially when travelling to countries outside the EU or without an agreement in force.
b) Tax Residency vs. Contributory
A change in tax residence does not necessarily imply a change in the tax regime. These areas are distinct and require coordination between taxation and HR, ensuring that the employee understands their situation.
c) Communication with the employee
The expatriate employee must be clearly informed:
- Of their Social Security status;
- Of their rights and responsibilities;
- Of how to activate social protection if necessary.
4. Best Practices for Companies with Expatriates
- Check if there is an international agreement with the country in question;
- Request A1 forms or certificates before relocation;
- Establish an internal international mobility protocol;
- Consult Social Security and lawyers specializing in international labor law;
- Monitor the Legislative changes in the countries where it operates.
Final Notes
The management of social security for expatriate employees is one of the most sensitive issues in international mobility. An incorrect framework can lead to debts, loss of rights and reputational damage.
The 2026 State Budget introduces significant improvements in the digitisation and supervision of secondments, reinforcing companies’ responsibility to comply with their contribution obligations.
Success depends on advance planning, specialised technical support and transparent communication between the company, the employee and the authorities.