Portugal has become an increasingly popular destination for digital nomads and freelancers looking to enjoy its warm climate, stunning landscapes, and rich culture.
In October 2022, Portugal even introduced the Digital Nomad Visa, which is a gateway to residency in the country. This visa is designed for non-EU citizens who want to live and work remotely in Portugal.
If you're a freelancer considering moving, you're in the right place. This blog post will discuss the various aspects of obtaining a Portugal Freelance Visa, including eligibility, visa requirements, taxes, and the steps to becoming a successful freelancer in Portugal.
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: If you're not a European Union/European Economic Area citizen, you'll need a work permit or a Portugal Freelance Visa to work legally in the country.
- Obtain a Número de Identificação Fiscal (NIF): A NIF is a tax identification number required for freelancers and anyone earning income in Portugal. Apply for your NIF at your local Finanças office or through a Portuguese tax representative like GetNifPortugal.
- Set up a Portuguese bank account: Opening a local bank account is crucial for conducting business and receiving payments as a freelancer in Portugal.
- Register as a freelancer: Register your freelance activity with the Portuguese tax authorities (Finanças) and obtain a tax identification number for your business.
Can I move to Portugal as a freelancer?
Yes, you can move to Portugal as a freelancer, but there are some requirements you must fulfill. Non-EU/EEA citizens need to apply for a visa to live and work in the country through their local embassy. As a non-EU citizen, you will need to apply for a visa in Portugal. If you are already in Portugal, you must book an appointment with the Portuguese Immigration and Border Services (SEF).Residence permit applications
After arriving in Portugal, the next step is to apply for a residence permit for work at SEF. This permit is crucial as it allows you to stay in Portugal for an extended period. If you received a Work Visa through the Portuguese Embassy or Portuguese Consulate, they will make an appointment for you at the SEF. You need to inform them of your intended location and move-in date in Portugal. A residence permit usually allows you to live and work in the country for a period of one to two years. To apply for this permit, you must provide the following documents:- A valid passport
- A recent passport-sized photograph
- Proof of health insurance
- Proof of sufficient funds to support yourself while in Portugal
- A police clearance certificate
- A signed work contract or proof of income from freelancing (through bank statements, invoices, or pay slips)
Work visas available for freelancers and digital nomads
Portugal Digital Nomad Visa
On 30 October 2022, Portugal launched the Digital Nomad Visa, allowing remote workers to live and work in the country for an extended period. With two visa categories available, you can apply for a temporary stay visa for up to one year or a residency visa that can be renewed for up to five years. Each category provides you with a different type of residency permit. Even better, visa holders can apply for permanent residence and citizenship after five years. To be eligible for the Portugal Digital Nomad Visa, you must earn a minimum of €3,040 ($3,350) per month, four times the Portuguese minimum wage. You'll also need proof of a valid work contract with a company outside of Portugal, including income proof such as bank statements or payslips for the past three months, an employment contract or proof of self-employment, and tax residency documents for the application process. Don't forget to have a valid passport, a clean criminal record certificate, health insurance that covers your stay in Portugal, and once you arrive, you'll need to set up a NIF and open a bank account. You can find an application form for the Digital Nomad Visa at your local embassy or consulate. They will issue you a temporary stay visa which can be converted to a longer-term visa in Portugal once you arrive in the country. If you need help setting up your NIF and opening a bank account, we can help you get these necessary documents through our online service. Read more about this visa option in our blog post: Working Remotely in Portugal.D2 Visa (Entrepreneur Visa)
The D2 Visa offers another option for remote freelancers who wish to work in Portugal. However, this visa is primarily for entrepreneurs who plan to start their own businesses in Portugal. The D2 Visa encourages non-EU entrepreneurs to invest in either existing businesses or establish a new business in Portugal. To obtain this visa, you must demonstrate that you have sufficient resources to support yourself and any dependents and establish a business. In addition, you should provide a comprehensive business plan highlighting how your investment will benefit the local economy and community. You must also explain why you have chosen Portugal as the location for your business activities. Our blog, Portugal Work Visa, provides more information on this visa type.
Is the D7 Visa (Portugal Passive Income Visa) for freelancers?
It's important to note that the D7 Visa does not officially allow you to start working in Portugal. However, if you acquire a residence permit later, you are eligible to work in the country. This means that freelancers can use the D7 visa but must wait to get their residence permit before working an in-person or remote job. As a result, if you already have a remote job or clients and want to start working in Portugal immediately, we would recommend applying for a Portugal Digital Nomad Visa instead. To be eligible for the D7 visa, you must demonstrate a consistent monthly passive income of at least €760 and comprehensive European Union health insurance. It is also known as the Portugal Passive Income Visa, and is available at a relatively low cost compared to other Schengen Visas that let you live and work in a European country. You should also have arranged suitable accommodation in Portugal, and you need to bring proof of accommodation such as a rental agreement to your visa appointment. A clean criminal record and a filled-out application form are other requirements.Portugal Freelance Visa Taxes and Financial Responsibilities
If you're a freelancer considering a move to Portugal, it's important to understand the country's tax and financial responsibilities. This section will provide an overview of Portugal's tax system, including information on the Non-Habitual Residency (NHR) program, wealth and inheritance taxes, property taxes, and company taxes. We'll also cover important financial responsibilities such as obtaining a NISS (Número de Identificação da Segurança Social) and opening a Portuguese bank account.Non-Habitual Residency (NHR) Program
The Non-Habitual Residency (NHR) program is a tax incentive initiative that encourages foreigners to become tax residents in Portugal and offers favorable tax rates for ten years to qualifying individuals.Conditions for NHR status
To qualify for NHR status, you must meet the following conditions:- You must not have been a tax resident in Portugal in the previous five years.
- You must become a tax resident in Portugal, meaning that you must spend at least 183 days in the country during a given year or have a home in Portugal that is considered your primary residence.
- You must have a profession eligible for the NHR program, such as architects, IT professionals, artists, investors, medical doctors, university professors, scientists, and senior executives.
Paying taxes: Flat tax rate and tax exemptions
If you're eligible for NHR status, you can enjoy a flat tax rate of 20 percent on income derived from "high added value activities," and you can also be exempt from paying tax on foreign income and capital gains for up to ten years. You may also be eligible for tax back on certain financial transactions so we'd recommend contacting a tax professional for more advice. See: A Guide to Non-Habitual Tax Residency (NHR Portugal 2023).Income taxes in Portugal (IRS)
Portugal has a progressive tax system with tax rates ranging from 14.5 percent to 48 percent. If you work in Portugal, you'll need to obtain a NISS (Número de Identificação da Segurança Social), which is your Social Security Identification Number. You must open a Portuguese bank account to pay social security contributions. Every year, you are obliged to file an income tax return. See: Guide To Getting a Social Security Number in Portugal (NISS).Corporate income tax (IRC)
Companies in Portugal are subject to a corporate tax (IRC) rate of 21 percent, but small and medium-sized enterprises may be eligible for certain tax benefits and exemptions.
Mandatory tax representative
To comply with Portugal's tax laws, certain individuals may need to appoint a fiscal representative. These may include:- Non-resident individuals who are legally connected to Portugal, such as those who have purchased property or a car registered in Portuguese territory
- Non-resident individuals who conduct business or earn income in Portugal, such as self-employed individuals or those with a Portuguese work contract
- Applicants for a NIF (tax) number who are from outside the EU/EEA
Penalties
It's essential to appoint a tax representative in Portugal within the given timeframe to avoid penalties. Typically, non-resident taxpayers have 15 days to appoint a representative after determining that one is required. However, if you plan to start a professional activity in Portugal, you must appoint a representative immediately upon registering with the Portuguese tax authorities. Luckily, it's easy to appoint a tax representative online through the Finanças website or in person at a tax office or Citizen's Bureau (Loja do Cidadão). Failing to appoint a representative when required or designating someone without their express consent can result in penalties ranging from €75 to €7,500. In addition, without a tax representative, you may be unable to exercise your rights before Finanças. For more information, refer to our blog post: Do I Need a Mandatory Tax Representative in Portugal?Self-employment registration for freelancers in Portugal
It's essential to follow proper legal procedures when setting up a company in Portugal. To register your company, you must obtain your Portuguese residency card, social security number (NISS), and NIF number. Complete these steps before registering your company so you can pay taxes and ensure compliance with Portuguese laws and regulations. For more detailed instructions, read Register a Company in Portugal Online.
Useful Resources
You might find the following blog posts helpful if you’re considering freelancing in Portugal:- Navigating the Income Tax Rate in Portugal: A Complete Guide
- Digital Nomad Tax: The Tax Benefits Available in Portugal
- Your Complete Guide To Working In Portugal As An Expat in 2023
- How to Get Citizenship in Portugal
- Portugal Immigration Guide
- Digital Nomad Portugal
- Freelancer in Portugal
