Last Updated on July 21, 2022 by Victor Queiroz
Welcome to our FAQ about working in Portugal as a freelancer.
Working in Portugal as a freelancer is a way of legally residing in this country and being able to enjoy all the benefits related to holding a Residence Permit in Portugal, such as:
- Live in a safe country
- Use its good infrastructure
- Efficient public health service
- Enjoy its paradisiacal spots
- Save money due to the relatively low cost of living
- Delicious food
Portugal has been a star in Europe in terms of growth as a consumer market, and its technological structure is rapidly increasing.
Therefore, considering that the application for the D1 Visa (Work Visa) is not so simple (as the applicant will need to present an Employment Contract before the application), the Freelance Visa (D2 Visa) has recently been gaining notoriety.
In this article we will answer some popular questions related to Freelance Visa and also analyze some obligations for the self-employed person who receives income in Portugal.
How is the procedure to apply for the Freelance Visa to Portugal?
To apply for the Freelance Visa, along with other requirements, the applicant must provide the following documents:
- Promise or Contract to provide services as a self-employed professional and
- Prove of being able to develop an “independent activity” according to the law.
As with most visas, the process starts in the applicant’s country of residence, at the Consulate of Portugal, and it is only after the visa is granted that the applicant can move to Portugal.
If you want to understand how the Portuguese visa procedure works, you can read the article All About Visas to Portugal.
When in Portugal, the applicant will receive the Residence Permit and be able to reside in this country for two years, renewable for another three years.
What are the most important documents for the application?
Below you can find the most important documents related to the D2 Visa (Freelance Visa).
- Copy of the Passport
- Portuguese Tax Number (NIF)
- Opened activity at the Tax Authorities
- Promise or a Service Agreement
- Proof of means of subsistence
- Proof of accommodation in Portugal
- International Travel Insurance
- Criminal records issued in the country of residence
- SEF authorization to consult the applicant’s Portuguese criminal record
- Filled out D2 Visa form
- Letter of Intent
Keep in mind that other documents may be required according to the applicant’s situation.
Finally, it’s also recommended to issue “green receipts” before the application.
How can I charge for my services as a freelancer?
Typically, after providing the services, you will need to issue a “green receipt”.
This document must be registered with the Portuguese Tax Authority (Finance) and must be sent to the contractor.
In this document, you will retain the V.A.T. and Income Tax amounts.
After obtaining my Portuguese Temporary Residence Permit (TRP), can I work as a freelancer in another country?
It’s possible to work as a freelancer in another country depending on this country’s working rules.
Also, the TRP holder can’t be absent from Portugal for more than six continuous months or eight non-continuous months during the Residence Permit validation period.
Suppose I’m hired for a regular job (with an Employment Contract). Can I continue living in Portugal?
If you have a TRP linked to self-employment activity and decide to be employed, you will need to change the type of your permit at SEF.
Depending on the person’s situation, many procedures can be performed to stay regular in Portugal.
For highly qualified professional (HQP), according to article 90 of the foreign law, this process can be simpler.
There is the possibility to apply for a visa (in this case, the D1 Visa), despite the procedure that must be performed (outside Portugal) to be granted this visa.
How much tax should a freelancer pay?
As a self-employed person, you will have to pay the following taxes:
- Value-Added Tax (VAT)
- Annual Income Tax (IRS)
You will need to pay VAT as you will provide a independent service in Portugal.
Therefore, an amount of your payment will be deducted to comply with Portugal’s tax rules.
There are some exceptions: If you receive less than 12,500€ per year, you will be exempt from paying this tax (article 53 of the VAT Code).
This exemption regime applies on an annual basis. Therefore, as soon as you exceed the 12,500€ limit, you will have to pay VAT at the rate of 23%, 13%, or even 6%, depending on your activity.
As for the Annual Income Tax, the amount to be paid can vary according to many variables, but the total annual income is the most critical data to be considered.
The categories of Income Tax in Portugal are:
- Category A – Income from employment
- Category B – Business and professional income
- Category E – Capital income
- Category F – Property income
- Category G – Property increases
- Category H – Pensions
The table of income tax rates in Portugal is as follows:
|Annual Income||% Tax Rate|
|Up to 7,091€||14.5%|
|From 7,091€ to 10,700€||23%|
|From 3,700€ to € 20,261€||28.5%|
|From 20,261€ to 25,000€||35%|
|From 25,000€ to 36,856€||37%|
|From 36,856€ to 80,640€||45%|
|More than 80,640€||48%|
Of course, each case must be analyzed individually, but generally, this is the most important information related to tax for those who intend to work in Portugal.
Will I be able to become a Portuguese citizen by regularly living in Portugal?
Yes, after legally residing in Portugal for 5 years you can apply for your Portuguese nationality.
For more information, see our article on Portuguese Nationality.
What professions can I develop to be considered a freelancer?
Article 151 of VAT Code can answer this question.
These are some of the professions that self-employed people can provide:
- Architects, engineers and similar technicians
- Artists, actors and musicians
- Economists, accountants and similar technicians
- Nurses and other paramedical technicians
- Lawyers and solicitors
- Doctors and dentists
- Teachers and similar technicians
- Journalists and reporters
- Computer programmers
- Other service providers (general)
Most of the professions related to a service’s development are covered by the referred article 151.
What are the advantages and disadvantages of being a freelancer?
These are some advantages of being a freelancer compared to working as an employee, and they are:
- Motivation to do what you like, when you feel most productive
- No hierarchical or power conflicts
- Greater autonomy at work and in managing the tasks to be performed
- Time management
- The profit is not shared with the employer
- Greater safety at work
- Lower income taxation
On the other hand, here are some disadvantages, such as:
- Higher risk activity
- Initial investment to start the project, including infrastructure and material
- No working hours
- Challenge related to showing yourself to the market
- Yield fluctuations
How can Viv Europe assist me in this process?
Viv Europe will be able to assist you by guiding the entire process related to the visa application.
This company will guide you through obtaining your Portuguese Tax Number, opening your activity in Portugal, and, in the end, applying for the visa procedure.