Last Updated on February 18, 2022 by Lea Melo
Working in Portugal as a freelancer is a way of legally residing in this country and enjoy all the benefits related to holding of 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 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 must present an Employment Contract before applying), the Freelance Visa (D2 Visa) has recently gained 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 obtains his / her income in Portugal.
With no further ado, let’s jump to the questions.
How is the procedure to apply for the Freelance Visa to Portugal?
If you are searching on the Internet for visas to reside in Portugal, you should have noticed that the D2 Visa is also required for those who want to develop a Business in Portugal.
So, while the D2 Visa is also designed to attract freelancers, the requirements to apply as a freelancer or business are quite different.
The business developer must provide a Business Plan while the freelancer must present, among other documents a:
- Promise or Contract to Provide Services as a self-employed professional, and
- Being able to develop a “independent activity”, in other terms, a liberal profession according to the law.
As with most other visas, the procedure 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 will need to travel to Portugal.
If you want to understand how the standard Portuguese visa procedure takes place, we invite you to read the article All About Visas to Portugal.
When in Portugal, the applicant will receive his / her Residence Permit and will be able to reside there regularly for a period of 2 years, when it will be necessary to renew this document.
What are the most important documents for the application?
This is the question we hear every day :D.
Below are the most important documents for the D2 Visa (as a freelancer).
Other documents may be required according to the applicant’s situation.
- A Service Agreement of Promise (to provide services as a freelancer)
- NIF number
- Activity at Finance
- Proof of means of subsistence
- Proof of accommodation in Portugal
- International Travel Medical Insurance
- Criminal records issued in the country of residence
- SEF authorization to consult the applicant’s Portuguese criminal record
- D2 Visa form
- Letter of Intent
Some documents must be obtained in Portugal before the application, such as the NIF and the activity to develop the profession.
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 is registered in the Portuguese Tax System (Finance) and must be sent to the service requester.
In this document you will retain the amounts related to VAT and Income Tax.
We will talk about these costs and others later in this article.
After obtaining my Residence Permit, can I work as a freelancer in another country?
Yes, considering that the holder of the Residence Permit don’t leave Portugal for more than 6 continuous months or 8 non-continuous months during the Residence Permit validation period.
Can I provide services to people outside Portugal?
Yes, this is relevant for those who develop a activity remotely, such as programmers.
It is possible to have external customers if there is no obstacle to providing services as a foreigner to a client residing in another country.
For example, a Portuguese lawyer will not be able to advocate in France before going through a local authorization process to do so.
There are, however, some situation to consider, such as:
- Perhaps there will be a currency change in relation to your payment (in euros)
- The revenue may be considered as obtained from abroad (with tax implications)
Considering that the customer may reside, for example, in Luxembourg, it can be very advantageous to assist him / her remotely, taking into account the difference between the price paid for service and also the the cost of living between these countries.
Suppose I am hired for a job. Will I be able to continue living in Portugal?
If you have a Residence Permit linked to self-employment and decide to be employed, you will need to change the type of your permit at SEF.
This topic is important and the procedure for changing the type of Residence Permit may vary depending on several aspects.
Let us know if you want a specific article on this subject, but in general, depending on the person’s situation, many procedures can be performed.
Let’s say that this person is qualified as a highly qualified professional according to article 90 of the foreign law. This way, he / she will not have to re-apply for a visa, as the residence permit can be obtained directly in Portugal.
It will also be possible to apply for the Expression of Interest procedure, but in this case the citizen will have to wait about a year to receive his / her residence permit again.
Finally, there is always the possibility to apply for a visa (in this case, the D1 Visa), despite the entire procedure that must be performed to be granted this stamp in the passport and, later on, obtain the residence permit.
These are just some of the procedures that can be performed to remain legal in Portugal. For a deep analysis of you situation, just send us a message.
How much tax will I have to pay as a freelancer?
Certainly, taxes are always a concern.
As a self-employed person, you will have to pay the following taxes:
- Value-Added Tax (VAT)
- Annual Income Tax
VAT will have to be paid because you will provide a service in Portugal, therefore, an amount of your payment will have to be deducted to comply with this country’s rules.
In this case, if you receive less than 10,000€ / year as payment, 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 10,000€ 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 important 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 Relate to the Income
- 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 in general, these are 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 can be provided by someone as a self-employed person:
- 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 that relate to the develop a service 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:
- Motivation to do what you really like, in the context you like best and 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
- Greater safety at work
- Greater personal fulfillment
- Lower income taxation
On the other hand, here are some disadvantages:
- 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 of obtaining your NIF, opening your activity in Portugal and, subsequently, applying for the visa procedure.
It can sometimes be difficult for an expat to do all the paperwork, mostly written in Portuguese, to successfully apply for a visa.