Freelancing in Portugal isn’t as complicated as it can be in other countries, and this is one of the reasons why I chose Portugal over Spain. In Spain they have this concept of being an ‘autonomo’ or ‘freelancer’ and you have to pay for the privilege. It’s not cheap either, a couple of hundred Euro a month even in months where you have not earnt anything! So if you look into the beaurocracy of freelancing in Europe, you will probably agree with me that freelancing in Portugal is much more straight forward than in other countries.
Saying that, bureaucracy is bureaucracy and you will still have to jump through hoops in Portugal to sort it. Be prepared – you may also find that different government officials tell you different things. Sometimes, when paperwork needs to be processed in Portugal, it’s literally the luck of the draw on who you get behind the counter that day!
Before you start Freelancing in Portugal
Before you start freelancing in Portugal there are a few things that you need to get set up first. You will of course need Portuguese residency as you cannot freelance in Portugal unless you live there. This will mean getting your CRUE if you are an EU citizen or applying for a visa such as the D7 Visa and getting residency based on that.
You will also need to get a NIF which stands for ‘Número de Identificação Fiscal or Número de Contribuinte’ or fiscal number. Every Portuguese resident will have one of these and also expats and foreigners who buy property in Portugal Will have an’NIF’. So a NIF is something you can actually set up before you live in Portugal. Many people set up a NIF with their UK address and then transfer it into their Portuguese address once they have one.
Once you have these things in place you can then get your NISS (the next official number that you need) and register as a freelancer.
How to register Self Employed in Portugal
I have been self employed in portugal for over two years, but only recently i’ve got my N.I.S.S.. I’ll explain at the beginning a little bit about what is this that you will need if you want to freelance or start your own business in portugal.
If you are freelance or self employed, then you’ll have to pay taxes. You’ll also have to get this N.I.S.S.- the National Identification Number for Self-Employed [Número de Identificação Social do Trabalhador Independente], which is a number given by the local government where you live.
N.I.S.S., National Identification Number for Self-Employed, is what you’ll apply to the Direcção Geral dos Impostos [General Tax Directorate].
When you are freelancer or self-employed you will be taxed at a different rate to normal employees Number of workers in Portugal by economic activity (2007) But don’t worry, if in the first year no one knows that you are working as a freelancer then they won’t charge you anything on that year. After this first year, you’ll have to pay taxes depending on how much you earn. You can also get a reduction in your taxes if you’re working from home.
This N.I.S.S is really important because it gives legitimacy to your business. So, if you don’t get it, you could be fined or have your ‘things’ confiscated by the police.
So, after getting this N.I.S.S. of yours, make sure that it is always updated because you’ll need it a lot when you have to contact the local government or any public services.
Getting your NISS
When you get your N.I.S.S., you will be given a card and a code, which is like an electronic signature that will allow you to register at all different services online.
So, you have to register at the local government and also at the Tax Office so that they can give you your NISS.
To get your N.I.S.S., you have to go in person at the Tax Office and bring:
1- Your passport
2- Four identical photos
3- Proof of home ownership
4- Proof that you live there i.e.: electricity bill
5- Passport number
6- A 10 euros note
Online Registration and Recibos Verdes
To register as a freelancer, a declaration needs to be filed with your personal details and the details of your activity. If you register in person, a clerk will fill in all the information for you – you just need to provide it verbally. The easiest way to do this is online and you can fill it in yourself. One important piece of information you’ll need is the code specific to the work you intend to perform. You therefore need to know exactly waht your self employed business activity is going to be before you register. Most codes and the corresponding occupations should be available here, in Portuguese (https://www.practiceportuguese.com/how-to-become-a-freelancer-in-portugal-and-issue-recibos-verdes/)
After validating and sending the declaration as self employed, you will receive an official letter to your Portuguese address and then you can start issuing ‘recibos verdes’ or ‘green receipts’. Recibos Verdes are means through which you can formally invoice clients and declare your income for tax and social security purposes.
Nowadays, they can only be issued online, but you will need to print them after in order to sign them. In the Portal das Finanças, the recibos verdes will be pre-filled with your own details, but you will need to manually add your client’s details. You will need their NIF, name, and address, along with a brief description of the service you provided/plan to provide.
Declaring your Taxable Income
The final stage is declaring your taxes, and it is highly recommended that you get an accountant to do your Portuguese Tax returns for you.
If you are resident in Portugal (more than 183 days a year), it is mandatory to declare ALL foreign income. However, there is a dual taxation agreement between Portugal and the UK and so you are unlikely to need to pay twice – just top up the difference.
For your self employed business in Portugal, the easiest thing to do is have a separate Portuguese bank account for business purposes and have every transaction go through the bank account. This means that book-keeping is then essentially just a case of printing out your bank statements and that’s your book-keeping done.
The Portuguese tax year runs from 1 January to 31 December (unlike the UK tax year which restarts on 4th April), with returns submitted the following spring. Returns can be completed online or via a paper form, but it is relatively easy to do this online. Remember that there are penalties for late tax returns – these can be anywhere from €200 to €2,500 (https://www.expatica.com/pt/finance/taxes/guide-to-taxes-in-portugal-105742/).
I’d love to hear your stories about freelancing in Portugal. Have you found the paperwork straight forward or complex? I’ve been here just over 6 months so far and I’m still figuring everything out! Please leave me a comment on my blog!