Freelancing in Portugal in 2025: A Legal and Tax Framework for Independent Professionals
Portugal continues to attract thousands of freelancers each year - creative professionals, consultants, and digital nomads who see the country as a safe, affordable, and inspiring homebase. But working independently here requires more than just finding clients. It means understanding how taxation, social security, residency, and compliance interact within one of Europe’s most complex - yet opportunity-rich - legal systems.
The Tax System for Freelancers
Anyone providing services independently in Portugal must register as a self-employed worker before the Portuguese Tax Authortity.
There are two main tax regimes, depending on your annual income and the nature of your business.
Simplified Regime: Default for freelancers earning under €200,000 annually. For certain activities, only 75% or 35% of the income will be taxed (the remaining will implicitly be considered business expenses) and subject to the Personal Income Tax (IRS) progressive rates (13%–48%).
Organized Regime: Requires certified accountancy and applies when accounting records are mandatory or the turnover exceeds the threshold. All income and expenses are declared according to real figures.
In 2025, several reforms were introduced to ease the burden on independent professionals:
Withholding tax reduced from 25% to 23% (or 12.5% for startups on the first €50,000).
VAT (IVA) threshold increased to €15,000 per year.
Advanced payments reduced to 65% of the previous formula to ease cash flow pressure.
Freelancers must also register before the Social Security system and pay a quarterly contribution of 21.4% over 70% of their taxable income (there are exceptions). Although many overlook it, this contribution is essential to grant access to the national free healthcare, parental benefits, and future pension entitlements.
Residency and Visa Options
EU and EEA nationals can live and freelance in Portugal without a visa but must register their residence after 90 days at the local town hall. For non-EU citizens, the legal route to self-employment involves applying for one of Portugal’s structured residence visas, namely:
. D8 Digital Nomad Visa: For remote freelancers earning at least €3,480/month. Grants’ temporary or renewable residency permits up to five years.
. D2 Entrepreneur Visa: For freelancers or small business owners establishing a professional activity in Portugal. Proof of contracts or clients is required.
Upon arrival, freelancers apply for a residence permit with AIMA, providing a valid passport, proof of income, accommodation, health insurance, and a Portuguese NIF (tax number).
<> Which visa types are best for freelancers moving to Portugal
For freelancers moving to Portugal in 2025, the best visa options depend on your income source, business structure, and desired length of stay. The most freelancer-friendly pathways are the D8 Digital Nomad Visa and the D2 Entrepreneur (Freelancer) Visa, with some considering the D7 Passive Income Visa for hybrid income streams.
D8 Digital Nomad Visa (Best for Remote Freelancers)
The D8 Visa, introduced in late 2022, is the most popular choice for freelancers and remote workers earning from clients or companies abroad. It enables them to live and work legally in Portugal while maintaining international contracts.
Key facts for 2025:
Income requirement: Minimum €3,480 monthly (four times the national minimum wage).
Visa options:
Temporary stay visa: Valid up to 12 months, renewable up to four times; ideal for testing life in Portugal without residency commitments.
Residency visa: Grants an initial 2-year residence permit, renewable for 3 more years, leading to permanent residency or citizenship after five years.
Documents needed:
Passport, proof of income (bank statements or contracts), health insurance, accommodation proof, and clean criminal record.
Tax benefits: Can be combined with the NHR 2.0 (IFICI) regime for a 20% flat tax on Portuguese-sourced income for 10 years.
Best for: Remote freelancers working for non-Portuguese clients or companies, digital nomads, and consultants who want freedom within the Schengen Zone.
D2 Entrepreneur Visa (Best for Local or Hybrid Freelancers)
The D2 Visa—also called the Entrepreneur Visa—is designed for freelancers or small business owners launching or relocating businesses to Portugal. It allows both independent service providers and company founders to work legally while contributing to the Portuguese economy.
Key facts:
Two tracks:
Entrepreneur route: Requires setting up a Portuguese company (LDA), business plan, and financial proof to operate locally.
Independent service provider route: For freelancers with client contracts in Portugal or globally, with lower setup demands.
Proof required:
NIF (tax number), Portuguese bank account, and evidence of financial sustainability.
Residency path: Initial 2-year residence permit, renewable for 3 years, with eligibility for citizenship after 5 years.
Best for: Freelancers with Portuguese or EU clients, entrepreneurs registering a legal entity, or those aiming for long-term residency through business activity.
D7 Passive Income Visa (Alternative for Freelancers with Stable Income)
This is an alternative route that is not specifically focused on freelancing. The D7 visa allows freelancers to reside in Portugal, but the application is based not on their professional activity, but on the passive income they receive (such as royalties, dividends or rental income). In other words, the basis for the residency is the passive income, which then permits the applicant to live in Portugal and carry out professional activities within the country.
Income requirement: Minimum €870 per month per adult applicant.
Grants full residency rights, including Schengen travel and access to healthcare.
Best for: Freelancers with mixed income (passive + remote work) seeking a low-threshold residency route.
NHR 2.0 (IFICI) Tax Regime
The end of the Portuguese Non-Habitual Residency (NHR) program in 2024 gave rise to the Tax Incentive for Scientific Research and Innovation (IFICI).
The new framework targets highly qualified professionals in science, technology, research, innovation, and education.
Eligible freelancers can benefit from:
A reduced flat tax rate of 20% over self-employment income, if their professional activity qualifies within the approved list of high-added value ones.
General exemption of taxation of foreign income (although it is mandatory that such income is declared annually).
Compliance Checklist: what every freelancer must do
Working legally in Portugal means maintaining strict compliance with tax and social security rules.
Obtain Portuguese NIF before any registration.
Open a Portuguese bank account.
File annual tax returns (between April–June of the following year) and declare global income if resident.
Register and pay VAT (IVA) if the annual revenue exceeds €15,000.
Issue invoices (“recibos verdes”) in the Tax Authority online platform for all self-employment payments rendered.
Different Rules by Citizenship
There are differences in taxes and residency rules between U.S., U.K., and EU/EEA citizens moving to or freelancing in Portugal. The main variations relate to visa/residency rights, double taxation agreements, and social security coordination.
Residency Rules
EU/EEA Citizens: can live and work in Portugal freely without a visa. They must only register residence (Certificado de Registo de Cidadão da União Europeia) after 90 days of stay at the local town hall (Câmara Municipal). This certificate grants full tax residency rights once they spend over 183 days per year in the country.
UK Citizens (Post‑Brexit):
since Brexit, UK nationals are treated as third-country nationals, requiring a visa such as D2 (freelancer/entrepreneur) or D8 (digital nomad) to reside or work in Portugal. Residency rights follow the same structure as for U.S. citizens—initial one- or two-year residence permits renewable up to five years for permanent residence or citizenship eligibility