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Indefinite-term contracts are by far the most common type of employment contract in Portugal. These contracts provide employees with more robust protections than fixed-term contracts and it is more difficult to terminate employees on these contracts.
Fixed-term contracts are only possible in certain cases where they can be justified by a certain situation: replacing an absent employee (such as someone on parental leave), and to complete a specific temporary project.
There are several other types of employment contracts available in Portugal, including:
These employment contract types are less relevant for companies looking to do business internationally in Portugal. If you are an international company looking to hire in Portugal, it is recommended to go with an open-ended contract.
Your business can easily hire employees in Portugal without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.
The standard employment contract in Portugal is an open-ended contract. The open-ended contract is what is used most often in EOR setups.
The alternative employment contract in Portugal is the limited or temporary contract. This contract is only to be used in specific situations such as:
The main differences between the standard and alternative employment contracts in Portugal are:
Note that if an employee is on a temporary contract (maximum duration 2 years), and their contract is renewed 3 times, it is then automatically converted to an open-ended contract.
The open-ended contract will be suitable for most hiring projects in Portugal. You can contact us for an assessment of your specific situation.