Portugal offers plenty of opportunities for freelancers. Think thriving start-up scene, modern coworking spaces, networking events and opportunities, the potential for work-life balance, stunning landscapes, and great coworking spaces.
But, before starting to work as a freelancer in Portugal, it's essential to familiarize yourself with the local business regulations and tax requirements. Understanding the legal aspects of freelancing in Portugal will help you navigate the administrative landscape seamlessly and ensure compliance with the country's laws.
This article will guide you through the necessary steps to set up as a freelancer in Portugal, providing insights into the registration process, tax obligations, and any specific industry regulations.
Additionally, we will explore the country’s flourishing entrepreneurial ecosystem, offering tips on how to tap into the thriving start-up scene and make meaningful connections within the professional community. Have a look below to learn more.
Why Become a Freelancer in Portugal?
There’s a range of reasons why becoming a freelancer in Portugal is an attractive prospect in 2024. Over the years, the country has become a captivating destination for independent professionals seeking a thriving and enriching work environment in Europe.
Overall, Portugal offers favorable economic conditions, a high quality of life, and a thriving business landscape. Often referred to as “the Silicon Valley of Europe", the country has been welcoming thousands of tech startups each year, aside from hosting world-renowned events such as the Web Summit.
Here are some key benefits of being a freelancer in Portugal:
Thriving Start-Up Scene
Portugal has witnessed a significant rise in its start-up ecosystem in recent years. Cities like Lisbon and Porto are bustling with innovative enterprises, providing freelancers with ample opportunities to collaborate, network, and contribute to cutting-edge projects.
Modern Coworking Spaces
Portugal boasts a plethora of modern and well-equipped coworking spaces. These environments cater to various working styles and preferences, offering freelancers flexible and collaborative workspaces that foster creativity and productivity.
Networking Events and Opportunities
The country hosts numerous networking events, conferences, and meetups, providing freelancers with platforms to connect with like-minded professionals, potential clients, and industry experts. These events contribute to building a robust professional network that can be invaluable for career growth.
Work-Life Balance
Portugal is renowned for its emphasis on work-life balance. The culture encourages a more relaxed and laid-back approach to work, allowing freelancers to enjoy their personal lives while pursuing their professional goals.
Stunning Landscapes
The country's breathtaking landscapes, from coastal areas to picturesque countryside, offer freelancers the chance to enjoy a high quality of life outside of work. Access to beautiful surroundings can contribute to a healthier work-life balance and enhance overall well-being.
Cost of Living
Portugal offers a relatively affordable cost of living compared to many other European countries. This factor, coupled with the availability of diverse and affordable coworking spaces, makes it an economically viable choice for freelancers looking to establish themselves in a supportive and cost-effective environment.
Cultural Richness
Portugal's rich history and vibrant culture provide freelancers with a unique backdrop for both work and leisure. Exploring the local traditions, cuisine, and events can add a dynamic and enriching dimension to the freelancer lifestyle.
Who can become a freelancer in Portugal?
Freelancing in Portugal is open to a wide range of individuals, both residents and non-residents, who wish to work independently in various fields. Here are the key groups of people who can become freelancers in Portugal:
EU/EEA Citizens
Citizens of European Union (EU) or European Economic Area (EEA) countries have the right to work and reside in Portugal without the need for a work visa. They can easily become freelancers and contribute to the country's dynamic professional landscape.
Non-EU/EEA Citizens
Non-EU/EEA citizens who wish to freelance in Portugal can apply for a work visa. Fortunately, Portugal has a few attractive visa options for freelancers, including the D2 Visa Portugal and the Digital Nomad Visa.
In the following sections, we will detail these freelancer visas, highlighting the unique advantages associated with each and providing comprehensive guidance on the application process for prospective applicants.
How to Become a Freelancer in Portugal
Before making the move, it’s essential to understand the process of becoming a freelancer in Portugal. Here’s a step-by-step guide:
Obtain a Work Permit:
To work as a freelancer in Portugal, you need a legal residence permit and a work permit. If you're a citizen of any EU, EEA country, or Switzerland, you do not need a visa to live and work in Portugal. If you're not in any of those categories, you will need a valid visa.
Get a Portuguese NIF Number:
The Portuguese tax identification number is known as the NIF or the Número de Identificação Fiscal. This unique nine-digit number allows you to carry out any financial activity in Portugal, so you'll need one to get your NIF and open a bank account before you can start freelancing in the country.
The NIF will also allow you to pay income tax. The Portuguese tax authority (autoridade tributária) is responsible for issuing these tax numbers. You can get a NIF by visiting a tax office (Finanças) with the required documentation consisting of a photo ID and proof of residence.
When you get your NIF, ask for your password to log in to the tax authority's website, known as Portal das Financas.
Alternatively, you can apply for a NIF through our website, and you'll receive your NIF in two to three weeks. Previously, foreign nationals were constitutionally required to have a tax representative in order to apply for a NIF; although there is no longer a requirement, appointing a tax representative can simplify the process. Our tax representatives can help you get a NIF from anywhere in the world for any nationality.
Get a NISS (Social Security Number):
Portugal's social security identification number is known as the NISS (Número de Identificação da Segurança Social).
Self-employed individuals must pay taxes to the Portuguese government, which varies according to their monthly income. Just like a Social Security Number, the NISS is necessary to pay social security contributions. Obtaining a NISS is necessary for tax purposes, and it's also a crucial step in accessing social security benefits in Portugal, including healthcare, unemployment, and pensions. This means that it's advisable to make it a priority to obtain your NISS as soon as possible after arriving in Portugal.
You can apply for a NISS in person at a Portuguese social security office, known as Centro Nacional de Pensões, or at Loja do Cidadão. You can also submit your NISS application online on the Social Security portal. You will need to provide a valid passport or ID card, a tax identification number, and proof of address. If your documents are not in Portuguese, you might need to have them translated by a certified translator. Ensure you understand any translation requirements beforehand.
Portugal prides itself on its social security contribution system, so make sure that you're contributing the correct amount. Read this article for more detailed information about getting a NISS.
Open a Portuguese bank account
When registering as a freelancer in Portugal, you need to have a bank account and IBAN to share with Finanças. The IBAN (International Bank Account Number) is needed for receiving payments and managing your finances as a freelancer.
Opening a bank account in Portugal is relatively straightforward. You will need:
- A NIF
- Proof of address from your country of origin or in Portugal
- Proof of income or employment (such as a contract or bank statements from other banks)
- A deposit (this varies depending on the bank and account type)
We can help you open up a Portuguese bank account from anywhere in the world with a major Portuguese bank such as BCP Millennium or Novo Banco.
Register the opening of business activity with the tax authority (Finanças)
Before starting to work as a freelancer in Portugal, you must register yourself as a freelancer. Registering as a freelancer in Portugal allows you to:
- Work legally in Portugal
- Pay taxes and access the tax system
- Calculate your income tax
- Access the social security system
- Pay mandatory social security contributions
- Apply for residency and renew your residence permit
- Rent/buy a legal residence
- Issue official invoices (recibos verdes or 'green receipts') to your clients
You'll have to register the opening of your business activity with the Finanças, which are the Portuguese tax authorities. This should be done only once the above steps are completed.
When registering as a freelancer in Portugal, you'll need to provide detailed information about the services you will offer, the date that represents the estimated start date of your activity, and your projected annual income. Finanças can then gauge both your personal income tax and whether you need to pay value-added tax (VAT) and how much.
Finanças will also then group you into a particular category depending on the nature of your freelance work. This is done through activity codes (código de atividade). You can see what code your work falls under Article 151 of the CIRS.
Certain groups are VAT-exempt or have a limit on the amount of VAT-free income you can generate. For example, Category B self-employed workers do not pay VAT on incomes under €12,500.
You will be asked to choose between two accounting regimes; simplified (regime simplificado) or organized (contabilidade organizada). You can choose the simple regime if you do not have an accountant. If you earn more than €200,000 annually, you must select the organized regime and hire an accountant. The downside to the simple regime is that it doesn't allow for business expenses.
Once you've opened this activity with Finanças, you're ready to start issuing official invoices (recibo verdes) through the website and have successfully registered as a freelancer in Portugal.
Visas for Freelancers in Portugal
To work as a freelancer in Portugal, you need a legal residence permit and a work permit. If you're a citizen of any EU, EEA country, or Switzerland, you do not need a visa to live and work in Portugal. If you're not in any of those categories, you will need a valid visa.
Fortunately, there are several visas granting a legal residence permit and work permit for freelancers in Portugal. We'll explore the best options below.
Portugal Digital Nomad Visa
On October 30, 2022, Portugal introduced the Digital Nomad Visa (D8 Visa), making it possible for foreigners to live and work remotely in Portugal for an extended period.
Under the Digital Nomad Visa category, there are two visa options available: a temporary stay visa, valid for up to one year, and a residency visa, which can be renewed for a maximum of five years. Each visa category grants a different type of residency permit, and after five years, visa holders can even apply for permanent residence and citizenship.
To qualify for the Digital Nomad Visa, also known as the Portuguese Freelance Work Visa, you need to have a minimum monthly income of €3280, which is four times the Portuguese minimum wage. Along with that, you must provide evidence of a valid work contract with a company outside Portugal, including income proof like bank statements or payslips for the past three months, an employment contract or proof of self-employment, and tax residency documents.
Remember to have a valid passport, a clean criminal record certificate, health insurance covering your stay in Portugal, and upon arrival, set up a NIF (Tax Identification Number) and open a bank account.
To apply for the Digital Nomad Visa, obtain an application form from your local embassy or consulate. They will issue you a temporary stay visa, which can be converted to a longer-term visa once you arrive in Portugal.
Portugal D2 Visa (Entrepreneur Visa)
The D2 Visa presents an alternative for remote freelancers seeking to work in Portugal, specifically designed for entrepreneurs aiming to initiate their businesses in the country. Tailored for non-EU entrepreneurs, the D2 Visa promotes investment in existing businesses or the establishment of new ventures within Portugal.
To secure this visa, you'll need to showcase that you possess ample financial resources to sustain yourself and any dependents while setting up a business. Alongside this, you are required to submit a detailed business plan outlining how your investment will contribute to the local economy and community. Additionally, it's essential to articulate why Portugal has been chosen as the preferred location for your business activities.
Golden Visa Portugal
Portugal's Golden Visa program is another great visa option for non-EU freelancers aspiring to live and work in Europe. This program grants a residency permit through investment in Portugal, offering remarkable flexibility.
As a Golden Visa holder, you can get a temporary residence permit valid for two years and renewable for an additional two. After accumulating a five-year temporary residency permit, you can exchange it for a permanent one, paving the way for permanent residency and subsequent Portuguese citizenship.
Now, let's delve into the key element – the investment. The Portugal Golden Visa program provides several options: investing in Portugal's culture and heritage sector, an investment fund, scientific research, and more.
Crucially, maintaining your investment for a minimum of five years is a prerequisite for program eligibility.
One standout feature of the Golden Visa program is its flexibility regarding residency requirements. You only have to stay in Portugal for 14 days every two years. This means you can use the country as a base while freely exploring other European destinations that align with your nomadic lifestyle.
To apply, be prepared to demonstrate proof of your investment, present a clean criminal record certificate from your home country, and possess health insurance. You'll also need to obtain a Portuguese taxpayer number and register with immigration authorities.
No matter which visa option you choose, we recommend speaking with experts in the field to understand your options and which is the best avenue for your specific needs.
How long does it take to register as a freelancer in Portugal?
The whole process of registering as a freelancer can take a couple of months from your arrival in Portugal. This timeframe includes two or three weeks to receive your NIF and four to eight weeks to receive your NISS. The time it takes to submit the required documents and enroll in the social security regime might differ based on the nature of your work.
Creating a Company in Portugal
Most freelancers in Portugal do not register their business as a company because registering as an individual incurs fewer social security fees and taxes.
It's important to note that if you want to sell products, you must register with the local tax authorities as a company. In the eyes of Portuguese law, you will be seen as having sole trader status as an Empresário em Nome Individual or ENI — the single owner of a company that sells products and may provide services. As such, you may have to pay corporate tax on your earnings.
Tax Considerations for Freelancers in Portugal
If you're working as a freelancer in Portugal, you'll be dealing with the same tax regulations as other self-employed individuals. The tax system operates on a self-assessment basis, which means it's your responsibility to calculate and pay your taxes. Keep in mind that the tax year in Portugal spans from January to December.
Paying taxes is mandatory for freelancers in Portugal. These taxes include the annual income tax return, Value-added tax (VAT), and paying social security contributions.
If you're offering services or selling goods, you might need to include VAT on your invoices for both Portuguese and non-Portuguese clients. The standard VAT rate in Portugal is 23%. Ensure you submit your tax return by the deadline of June 30 each year, and if you're registered for VAT, you'll also need to provide quarterly VAT returns.
When it comes to Personal Income Tax (PIT), freelancers in Portugal are subject to a progressive tax system based on their income. Tax rates range from 14.5% to 48%, depending on the income level. Alongside quarterly VAT payments, freelancers are required to file an annual income tax return by April 30 of the following year. This annual return helps reconcile your actual income and expenses, ensuring adjustments for any overpayments or underpayments made during the year.
Don't forget about paying social security contributions; freelancers are liable to pay a percentage of their taxable income. It's an essential aspect to consider while managing your freelance activities professionally in Portugal.
Tax Deductions and Tax Exemptions for Freelancers in Portugal
Navigating Portugal's tax system as a freelancer in 2024 can seem daunting, but understanding potential deductions and exemptions can ease your burden. Remember, individual circumstances dictate applicability, so consulting a tax professional is advisable.
Business expenses like rent, office supplies, and software might be deductible, offering tax relief. Similarly, depreciating work-related assets like computers can benefit you. Even medical insurance premiums, pension contributions, and training courses may be partially deductible under specific conditions outlined by the Portuguese Tax Authority.
The tax year follows the traditional calendar, running from January to December. Annual tax declarations need to be made before April of the following year; for example, if you started earning money from freelancing in July 2023, then you would need to file your annual tax return and declare by April 2024. This will help you and the tax authorities calculate your taxable income.
Looking beyond deductions, consider potential exemptions. The Simplified Tax Regime (RSI) simplifies calculations and potentially lowers tax rates for freelancers with annual income below €200,000. New businesses might enjoy tax exemptions or reduced rates for initial years through Start-up Incentives, but remember, eligibility and duration vary.
The non-habitual residency tax regime for freelancers
If you're relocating to Portugal and have not been a tax resident there in the last five years, you could be eligible for NHR (non-habitual residency) tax status.
If you have international clients who are based outside of Portugal, we'd strongly recommend obtaining NHR status as freelancers only have to pay 20 percent income tax on self-employment. Once you have your NIF, you can register as a NHR through the tax authority's (Finanćas) web portal.
Top tip: You can read about NHR in our article, NHR for Digital Nomads.
Important update: The NHR is being phased out for new applicants, effective from January 2024. Anyone who already had the NHR by the of 2023 maintains the regime under the same terms until completing ten years of benefiting from the status.
Meanwhile, only individuals who meet the conditions for registration as non-habitual residents on December 31, 2023, as well as holders of a residence visa valid on that date, will be able to register before the deadline of 31 March 2024 and benefit from the scheme for ten years.
To Wrap Things Up
It's essential to stay in the loop and be informed about tax payments and self-employment registration in Portugal. Freelancers can benefit from the high quality of life and all the riches that Portugal offers, but we don't want an unexpected fine for not complying with the tax regulations to ruin your time here.
To live in Portugal as a freelancer, it's imperative to, first and foremost, have your NIF. If you need a NIF number or a Portuguese bank account, then GetNIFportugal can help you.
We'll do the work so you can receive your NIF number and get your Portuguese bank account up and running as quickly as possible, meaning that when the time comes to register yourself at the tax authority office, you'll be good to go.
Frequently Asked Questions
Can I move to Portugal as a freelancer?
Yes, it's possible to move Portugal as a freelancer. For EU citizens, a visa is not necessary. For non EU citizens, there are several visa options, such as the Digital Nomad Visa, which caters to remote workers and simplifies the process. Thorough research is crucial to ensure compliance with visa requirements, tax obligations, and social security contributions.
Can I work as a freelancer in Portugal?
Yes. If you have the right to live and work in Portugal — you are an EU citizen or you have an appropriate visa — you can register as a freelancer with Finanças (the tax office) once you have your NIF and Portuguese bank account.
Is there a Portugal self-employed visa?
If you're looking for a visa that will let you register as a freelancer, we would recommend signing up for the Digital Nomad Visa, the D2 Visa, or the Tech Visa. If you contact your local Portuguese Consulate or Portuguese Embassy, they can tell you what visas you're eligible for.
Do freelancers pay tax in Portugal?
Yes, freelancers in Portugal do pay taxes just like any other self-employed individual. In fact, they are considered "independent workers" (Trabalhador Independente) by the Portuguese tax authorities. This means that they may be required to pay income taxes, Value Added Tax (VAT), and social security contributions.
How much tax does a freelancer pay in Portugal?
The average contribution rate in Portugal for an independent contractor is 21.4 percent. However, this amount can vary depending on the contractor's income.
How many freelancers are in Portugal?
An estimated 16.9 percent of people in Portugal are self-employed workers or freelancers, according to World Bank data from 2020. This is higher than the European Union average of 15.2 percent, indicating that there are many freelancers in Portugal.
How do I register as a freelancer in Portugal?
You can register as a freelancer in Portugal by:
- Having residency and work rights
- Obtaining a NIF
- Opening a bank account
- Registering the start of your business activity
- Getting a NISS
Should I buy health insurance as a freelancer in Portugal?
Deciding on health insurance in Portugal as a freelancer depends on your residency and social security enrollment. If enrolled, freelancers in Portugal can access the national public healthcare system. However, consider private insurance for potential faster appointments, broader coverage, or increased comfort during treatment. Weigh your needs and budget to make an informed decision.
What are the best places to find freelance work in Portugal?
To find more clients for your freelance work in Portuga, try global online marketplaces for freelancers such as Freelancer.com, Guru, Upwork, and Workana as well as professional social netowrks like LinkedIn for diverse projects and client connections. For language-specific or industry-tailored gigs, check out Portugal Storee, FreelancerPT, and Jorn.pt. It is also adivsable to attend networking events, join online communities, and use co-working spaces to build connections.
