Work as a Freelancer in Portugal: Legal Residence Permit and Taxes

The COVID-19 pandemic is changing our daily routines drastically. For instance, many companies have come to see that their employees can successfully work from home. Many of those who have to work from home due to the lockdown requirements are astonished to find out how many advantages this work practice has. For example, you can be located anywhere in the world if you can perform all your job tasks online. For this reason, many freelancers and company employees working from home are starting to think about relocating to a nicer place. Probably one of the most attractive countries where a freelancer can find an adobe is Portugal. Relocating to Portugal if you are a freelancer will bring several important benefits.  

• You can live in Portugal and work for clients located in any other country.
• Portugal offers a wonderful climate and an opportunity to reside on the Atlantic coast.
• It is possible to acquire a legal residence permit by investment in Portugal. With time, the residence permit can be turned into full European citizenship.
• The freelancer has to pay a tax that is called Segurança Social at the rate of 21.4%. At the same time, only 70% or even 20% of the profits may be taxable.
• When you hold a legal residence permit in Portugal, you are free to enter any EU state without a visa.

How you can legally relocate to Portugal and work as a freelancer there

If you are a freelancer (probably with clients from different countries) and you wish to relocate to Portugal and work from there, you should know that there are no special regulations for foreign freelancers in the Portuguese legislation. In other words, you cannot simply come to the country and announce that you want to live and work there. At the same time, there are several ways to acquire legal residence in Portugal such as investments, family reunification, a job contract, and so on.

How to register as a freelancer in Portugal

To acquire legal grounds for living in Portugal and working as a freelancer/ self-employed person in the country the foreign national has to do several things that include the following ones:

• Acquire a tourist visa to Portugal to legally enter the country.
• Acquire a taxpayer’s number (abbreviated as NIF in Portugal) and a social security number (abbreviated SS). 
• Open a bank account. This is an important task to complete, as it will have a serious bearing on your life in Portugal. You are welcome to apply for a free consultation on opening a foreign bank account with InternationalWealth experts. We will gladly discuss the available options with you that include traditional banks, neobanks (digital banks), and payment systems.
• Register as a sole proprietor (Atividade) with the authorities of the municipality where you choose to reside. This is required for taxation purposes.
• Rent an apartment or a hotel room. You have to have a place of residence in Portugal when applying for legal residence in the country and you have to be able to supply the documents that confirm that you do have a place to stay.

Please note that a foreign freelancer seeking to acquire a NIF in Portugal has to use the services of a local agent/ attorney. Foreign nationals (those who come from non-EU countries) are not allowed to file applications for the NIF on their own.

How a freelancer can acquire a legal residence permit in Portugal

The next step to take is to obtain a legal residence permit in Portugal. This can be done in two ways. The first way does not require investments but it takes a long time. The second way is fast but you have to invest a considerable sum of money in Portugal. Let us discuss both ways of acquiring legal residence in Portugal.

The free way of acquiring a legal residence permit in Portugal for a freelancer

You can apply for legal residence in Portugal in person or file the application through the official website of the immigration service in the country sapa.sef.pt Please make sure that you put a «Manifestação de interesse» note when applying. You have to scan and upload the following documents when filing the application through the website (you will have to bring the originals of these documents when you turn up for a personal interview with a Government official):

• Your passport.
• A confirmation of legal entry to Portugal – the visa, the airline tickets, etc.
• A confirmation of a monthly income of not less than 665 euros (this is the minimum monthly income required to legalize your presence in Portugal).
• A police clearance from your home country or the country where you have resided for more than one year.
• A residential address confirmation.
• The registration certificate from the tax service.
• The sole proprietorship registration certificate. 
• A confirmation of payment of the state duties and fines (such as the fine for illegal overstay, if applicable).

This should do the trick. However, practice shows that you may have to wait for an invitation for an interview with the Portuguese immigration service (the SEF) officials for quite a while. Sometimes people have to wait for a few months while at other times they may have to wait for two years.

How you can acquire legal residence in Portugal by investment

The easiest way to legalize your extended stay in Portugal is to make an investment in the amount that will make you qualified for a ‘golden visa’. The required investment amount is rather high and not all freelancers will be able to afford it. However, if you have put some money aside and you are eager to find an abode in Portugal and happily work from there for your international clients, the task of acquiring legal residence in the country becomes easy and it can be performed very fast.

The required investment amounts to qualify for a ‘golden visa’ to Portugal in 2021:

• 280,000 euros – when investing in real property that is located in an underdeveloped area and that needs repairing.
• 350,000 euros – when investing in fully functional residential/ commercial real property in an underdeveloped area.
• 500,000 euros – any residential and commercial property located anywhere in the country including the cities of Lisbon and Porto.

Our services in Portugal

from 3200 EUR

Register a Company in Portugal – No Need to Travel!

from 280 000 EUR

European Residence Permit by Hotel Co-ownership in Portugal (Vila Viçosa)

from 535 000 EUR

Residence-By-Investment in Portugal: Holiday Villas Plus Golden Visas

What taxes does a freelancer have to pay in Portugal? 

When you become an ‘independent worker’ (Trabalhador Independente), that is, a sole proprietor in Portugal, you will have to pay the taxes just like anywhere else in the world.

In 2021, sole proprietors in Portugal are subject to the following taxes:  

• Social tax (Segurança Social) at the rate of 21.4%. The tax is payable on 79% or on 20% of the profit.
• Personal income tax (IRS in Portuguese) is levied only when the annual income exceeds 12,500 euros.
• VAT (or IVA in Portuguese) is also levied when the annual income exceeds 12,500 euros. If the freelancer’s annual income is greater, he or she has to turn in a tax declaration and pay the tax at the following rates depending on the territory where the sole proprietorship is registered:  
  • 23% – continental Portugal;
  • 22% – Madeira;
  • 18% – The Azores.

Relocating to Portugal to work as a freelancer: the main advantages

There are probably dozens of advantages of working as a freelancer in Portugal. Let us point out the most important of them:

1. Portugal is a stable state from the political and economic point of view. It is one of the EU founding states.
2. You can become eligible for full European citizenship if you invest in real property in Portugal. The property ownership period shall exceed five years when you apply for citizenship of Portugal.
3. Portugal has agreements on avoiding double taxation with a great number of countries.
4. Some tax incentives and other fiscal bonuses are available to freelancers in Portugal.
5. If you acquire a golden visa to Portugal, you will not have to permanently reside in the country. It will suffice to spend 7 days a year in Portugal to keep your golden visa, which is a legal residence permit in Portugal.
6. If you register as a freelancer in Portugal, you will be able to work both for local employers and for international ones.

If you are interested in the opportunity to relocate to Portugal and work as a freelancer there but you have some questions related to the matter, please contact us without hesitation. You are welcome to use the email, the live chat, or a messenger for that purpose. Please click on the Contact us icon at the top of the page, send us a message and we will get back to you very fast!