International freelancer who’s looking to move to Portugal? There are several laws and regulations you need to know about before you begin working; whether it’s through a Portuguese company or directly with clients in Portugal or abroad.
Many foreigners in the country work as freelancers without any issues. However, if you want to keep all your options open, it pays to be informed from the start. This guide will walk you through what you need to know if you plan on making Portugal your new home.
1) Freelancer Taxes
When you’re self-employed in Portugal, taxes are much different than if you had a full-time job with benefits. Freelancers are obligated to report their earnings and pay both income tax and social security contributions every year. If you’re just starting out as a freelancer, it can be difficult to understand all of your tax obligations—but don’t worry, that’s what we’re here for!
2) Mandatory insurances
Before starting work, all freelancers need to be covered by mandatory insurances. Some are related directly with their activity, such as liability insurance for damages caused to third parties during execution of services. Others are in regards with associated risks such as health insurance for illness/accidents that could happen during projects.
The mandatory insurances required for freelancers in Portugal can vary from those required by self-employed professionals established by law, so you should contact your local tax office if you want more details.
3) Setting up a company
Your company is your legal entity, and it should be treated as such. Setting up a company in Portugal is a good way to separate your business from yourself personally. It means that all tax liabilities stay with your company, not you.
As a freelancer or entrepreneur in Portugal, it’s also important that you know how foreign companies doing business here can be taxed.
4) Registering your business
In Portugal, freelancers are considered self-employed and must register their business with Portuguese tax authorities. Registering your business requires you fill out a simple form at your local Direcção Regional de Finanças (DRF) office, providing your personal information and details about your business activity.
5) Hiring an accountant
If you need an accountant to oversee your financial affairs, look no further than RHJ Accountants.
At RHJ, we’re here to help you make sense of your financial situation, offer suggestions for how to manage and grow your business, and keep you abreast of any new tax developments that may impact your business. We are here for all phases of running a successful business – from startup through expansion and exit.
6) Finding clients as a Freelancer
Portugal is often seen as one of Europe’s laggards in terms of IT and business technologies, but its government has recently made several moves to encourage Portuguese companies (and individuals) to adopt digital tools and more efficient ways of working. Despite these efforts, Portugal is still behind other countries in adopting new technologies.
As a freelancer, how can you reach new clients? Networking is one way – attending seminars and joining meetups for freelancers may help you find clients.
7) Finding office space
If you’re looking for office space in Portugal, come to RHJ Accountants and associates. There is no reason to search for commercial office space in Lisbon alone when we have access to over 2,000 locations across Portugal – all at competitive prices. Our partners regularly contact us with suitable vacant offices and spaces that they know we can provide as a viable option.
If you’re based overseas or even just visiting, but need some place to work from then give us a call and see what we can find.
8) Networking, networking, networking
As with any other country, Portugal has its own rules and regulations about freelance work. One key difference in Portugal is that freelancers are not required to join a professional association or register with any specific body. This means no extra paperwork, so you can just get down to doing what you do best!
That said, it’s always useful to network with your fellow freelancers – it can be an invaluable support system when things aren’t going quite according to plan.
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.