2. How to Structure an Independent Contractor Relationship
a. How to Properly Document the Relationship
Under Portuguese law, there are no formal requirements to conclude a service agreement (agreement with independent contractor), although written form is recommended for purposes of evidence. In addition, all documents suitable as proof for the status of independent contractor (such as invoices, declarations, contractor’s marketing activities, etc.) should be collected.
Regardless of which status the parties have chosen at the moment of the conclusion of the contract, the decisive criterion is how the contractual relationship is exercised on the day-to-day business. Thus, the abovementioned factors, which suggest the existence of an “employee” status, should be avoided both in the contractually agreed conditions and in practice.
b. Day-to-Day Management of the Relationship
In the day-to-day management of the contractual relationship, the independent contractor shall be treated as such and not with signs of subordination.
Periodical reviews of how the relationship with independent contractors is evolving should also be made to ensure that the de facto situation is not changing into an employment type relationship and should continue to be adequately characterized as an independent contractor agreement.