Freelancing and Self-Employment in Portugal
Self-employment in Portugal is a common path for both residents and foreign nationals. The system is primarily governed by the Tax Authority (Autoridade Tributária e Aduaneira) and the Social Security (Segurança Social). In Portugal, independent workers are typically referred to as trabalhadores independentes, and their invoices are colloquially known as recibos verdes (green receipts).
For the 2025-2026 period, the administrative landscape continues to focus on digital integration, requiring most freelancers to manage their obligations through official online portals. This guide details the registration process, tax requirements, and social security obligations for those operating as individuals without a limited company structure.
Legal Framework and Registration
Before beginning any professional activity, a foreign national must obtain a Portuguese Tax Identification Number (NIF). For non-EU/EEA residents, this usually requires a local fiscal representative.
Opening Activity (Abertura de Atividade)
The process of "Opening Activity" informs the Portuguese state that an individual is starting a business. This must be done via the Portal das Finanças or in person at a Loja do Cidadão. During registration, the worker must select a CAE (Economic Activity Code) or a CIRS code (specifically for service providers/professionals) that corresponds to their trade.
- NIF: Mandatory for all administrative steps.
- NISS: A Social Security Identification Number is required to ensure contributions are correctly attributed.
- Bank Account: While a personal account is permitted for sole traders, a dedicated SEPA-compliant account is recommended for professional transactions.
The registration is free of charge. However, foreigners must ensure their residency status allows for self-employment before registering.
Taxation: IRS and VAT
Freelancers in Portugal are subject to Personal Income Tax (IRS) and, in many cases, Value Added Tax (VAT/IVA).
Personal Income Tax (IRS)
Most freelancers operate under the "Simplified Regime" (Regime Simplificado), available for those with an annual turnover below 200,000 EUR ($210,000 USD, Jan 2025). Under this regime, the tax office assumes a fixed percentage of income is used for business expenses (e.g., 25% for most services), taxing only the remaining 75%.
Value Added Tax (VAT)
VAT is a consumption tax. For 2025, the exemption threshold under Article 53 of the VAT Code is 15,000 EUR ($15,750 USD, Jan 2025). Freelancers earning below this annual amount are exempt from charging VAT to their clients. If the threshold is exceeded, the freelancer must transition to the monthly or quarterly VAT regime, typically charging a standard rate of 23% in mainland Portugal.
Note: Different VAT rates apply in the Autonomous Regions of Madeira and the Azores.
Social Security Contributions
Independent workers are required to contribute to the Segurança Social to access healthcare, unemployment benefits, and pensions. Contributions are calculated based on the income reported in quarterly declarations.
- Contribution Rate: The standard rate for self-employed individuals is 21.4%.
- Quarterly Declarations: Workers must submit a declaration in January, April, July, and October, detailing the income earned in the previous three months.
- First Year Exemption: New freelancers are generally exempt from social security payments for the first 12 months of activity, though they must still fulfill reporting requirements.
- Minimum Payment: Even in months with no income, a minimum contribution of approximately 20 EUR ($21 USD, Jan 2025) may be required if the worker is not exempt.
Visas and Residency for Freelancers
For foreign nationals moving to Portugal to work as freelancers, specific visa categories apply. The eligibility depends on the nature of the work and the location of the clients.
D2 Entrepreneur Visa
The D2 visa is designed for independent workers or entrepreneurs who intend to open a business or provide services locally in Portugal. It requires proof of a viable business plan or existing service contracts with Portuguese entities.
D8 Digital Nomad Visa
The D8 visa (officially the "Residence Visa for the exercise of professional activity provided remotely") is intended for those working for clients outside of Portugal. To qualify in 2025, applicants must demonstrate a monthly income equal to or greater than four times the national minimum wage. With the 2025 minimum wage set at 870 EUR ($913 USD, Jan 2025), the requirement is approximately 3,480 EUR ($3,654 USD, Jan 2025) per month.
Manifestation of Interest
Historically, the "Manifestation of Interest" (Articles 88/89) was used by those already in Portugal to regularize their status. However, as of late 2024 and into 2025, the Portuguese government has tightened these rules, emphasizing that foreign nationals should apply for the appropriate visa at a consulate before arrival.
Exceptions and Special Cases
Administrative rules may vary based on the freelancer's specific situation:
- Double Taxation: Residents may benefit from Double Taxation Agreements (DTA) between Portugal and their home country to avoid being taxed twice on the same income.
- NHR 2.0 (IFICI): While the original Non-Habitual Resident (NHR) program ended for new applicants in 2023, the 2024/2025 "Tax Incentive for Scientific Research and Innovation" (IFICI) provides specific benefits for "high added value" roles. Eligibility depends on individual situation and professional category.
- Regulated Professions: Certain professions (e.g., doctors, lawyers, engineers) require recognition of qualifications by the respective Portuguese professional order (Ordem) before registration can be finalized.