Freelancing has become the more common way to make money in today’s economy; with many career paths now offering freelance opportunities. So how can you go about making this transition? In this article, we’ll take a look at the 3 steps to becoming a freelancer; and the rules to be aware of before you get started. Whether you want to freelance full-time or part-time, these tips will help you get started on your new path!
Decide if Freelancing is Right For You
While freelancing can be an exciting new path for somebody with the right mindset; it’s not the right option for everybody. Deciding this is the main step within our 3 steps to becoming a freelancer guide. If you have a highly specialised skill set or if you don’t want to deal with the administrative issues of running your own business, freelancing might not be the right choice. The most important thing is to make sure that freelancing is really something that will appeal to you and bring value to your life.
Registering as a Freelancer
It is vital that you register as a freelancer first; this is the key to getting set up correctly so that any potential future problems can be avoided. To get started these are the things needed:
– A NIF (Número de Identificação Fiscal) which is a taxpayer identification number
– We recommend opening a Portuguese bank account in your name instead of using a foreign account; making it easier to make payments regarding taxes and Social Security contributions
– To register in the Portuguese tax system as being self-employed or a freelancer
If you live outside of the European Union, the final step in your procedure will be to assign a tax representative. There’s no need to search for a tax representative when we at RHJ Accountants can help you – all you need to do is speak with us so we can help.
Regarding the aforementioned steps, as a foreigner, it’s easy to open a free and convenient, basic, bank account that will help expedite transactions for all sorts of needs. These are standard, free accounts that all banks are required to offer by law.
Then, when the time comes, at least six months after you begin your activity as a freelancer; you will have to apply for a Social Security Number. This way you will be able to pay your dues to the Social Security system and, in turn, have access to the benefits of doing so.
There are a number of different ways freelancers can invoice clients in Portugal. For example, freelancers can invoice clients using PayPal or through direct bank transfers. This is done online in a matter of minutes; and since all business transactions are stored digitally, there’s no need for files or records to be kept. Another way to invoice clients is by sending them a paper invoice via mail. While it might seem like an outdated method of payment; many freelancers prefer invoicing via mail because it allows them to keep detailed records of their work. The final option would be to use a tax software programme; certified by the tax authority, to invoice clients – which is a much more modern concept!
Please note: it is mandatory to communicate all the invoices to the Tax Authority. You can send your client a paper invoice; however you do need to issue the green receipt or use an invoicing software and communicate the digital file monthly to the Tax Authority.
How RHJ Accountants Can Help
We recognise more than ever that individuals and businesses from the UK and other countries may be globally mobile. We aim to make you aware of the tax-efficient opportunities, available tax relief and structure finances for life at home and abroad.
Our international team of specialists operate from offices in the UK and Portugal. We work together synergistically to provide tax efficient solutions to our clients to help them grow their business whilst keeping tax liabilities to a minimum.