How to become self-employed and start working as a freelancer in Portugal?

Get a Portuguese NISS (Social Security Number) 

The social security identification number is also known as the NISS (Número de Identificação da Segurança Social). Every self-employed person must pay taxes to the Portuguese government according to their monthly income. Getting your NISS is necessary for tax purposes, and also to pay for social security contributions. Your NISS plays an important role to get social security benefits in Portugal. 

Open a Portuguese bank account 

While you register yourself as a freelancer in Portugal, you need to open a bank account and get your IBAN. Later you have to share your IBAN with Finanças. It will help you in receiving your payments and managing your finance as a freelancer in Portugal.

Opening a bank account is simple process all you need is:

• A NIF (Tax Identification Number)
• 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 of your origin country)
• A deposit (this may vary depend on the bank and account type)

Register as a Freelancer with the tax authority (Finanças)

Before you start freelancing in Portugal, you have to register yourself as a freelancer. After registering yourself as a freelancer you are eligible to:

• Legally work in Portugal
• Pay your taxes and access the tax system
• You can Calculate your income tax
• Get access to 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

After completing the above steps now you have to register the opening of your business activity with the Finanças (Portuguese tax authorities). You have to provide detailed information of the services you are going to provide while registering yourself as a freelancer, starting date of your activity and your projected annual income. 

So that Finanças can calculate both your personal income tax and they will check whether you need to pay value-added tax (VAT) or how much. According to your freelance work Finanças will put you in a specific category. It will be done through the activity codes (código de atividade). 

Some of the categories are VAT-exempt or have a limit on the amount of VAT-free income. For example, Category B self-employed workers whose income are under €12,500 no need to pay VAT. 

There are two accounting regimes: simplified (regime simplificado) or organized (contabilidade organizada). You can choose the simple regime if you don’t need an accountant. If you earn more than €200,000 annually you have to select the organized regime, in this accounting regime you must hire an accountant. Once your activity is opened with Finanças, you can start working as a freelancer in Portugal and you’re able to issue official invoices (recibo verdes) through the website.

How much time does it take to start working as a freelancer or become self-employed?

It will take a couple of months in the whole process of registering as a freelancer, from the time you arrived in Portugal.  Because first you have to apply for NIF and it will take approximately 2 weeks to receive your NIF and then 4 to 6 weeks for getting your NISS. After that you submit your required documents and enroll in the social security regime.

Why become a self-employed or freelancer in Portugal?

Working as a freelancer in Portugal offers a gateway of opportunities. There are so many reasons for immigrants who want to establish themselves in this beautiful stunning European country to seek a quality lifestyle. Here we’ll discuss some reasons for living or working in Portugal as a freelancer.

In recent years Portugal has rapidly boasted a freelance economy with plenty of opportunities in various industries. Cities like Lisbon and Porto are full of innovative enterprises in creative fields like design and writing to IT industries such as programming and digital marketing etc.

Portugal is situated on the crossroads of Europe, America, and Africa. The country’s strategic location within the European Union provides access to a broad client base and facilitates collaborations across borders. So it’s quite easier to target local clients or expand your reach internationally, Portugal serves as an ideal Launchpad for freelancers seeking to grow their businesses on a global scale. 

Portugal’s entrepreneurial system is characterized by a supportive community of startups, and co-working spaces, providing freelancers with access to resources, mentorship, and networking opportunities. Which is best to grow as a freelancer in Portugal. 

Freelancer in Portugal has offered a favorable tax regime by the Portuguese government, with competitive tax rates and various incentives aimed at fostering entrepreneurship and innovation.  Which makes Portugal an attractive destination for freelancers seeking to optimize their tax liabilities.

Portugal is known for its high quality of life, the country offers a blend of modern amenities and vintage charm. From the best healthcare and education systems to affordable housing and a rich cultural heritage, Portugal provides a favorable environment for freelancers to flourish professionally and personally.

Who can become self-employed or work as a freelancer in Portugal?

Anyone can be a freelancer in Portugal, who wants to work independently in any field. Whether the individual is a resident or nonresident. For example EU/EEA Citizens can easily become freelancers in Portugal because they are free to work & reside in the country without any work visa. 

On the other hand Non-EU/EEA Citizens who wish to do freelancing in Portugal, they need to apply for a work visa. There is also some other popular visa option for freelancers, including the D2 visa or startup visa (entrepreneurial endeavors) and Digital Nomad visa.