Becoming a Freelancer in Portugal

Why and when you need to open activity

You open activity when you are going to receive money for work or services that do not come from a normal employment contract. A client who asks you for an invoice, a freelance project, selling online, running training courses, renting out your camera — all of this requires you to be registered as a self-employed worker with the Autoridade Tributária (tax authority).

The practical rule I follow: if you are going to issue a document saying "I received X for this service", you need activity open to do it legally. The recibo verde (green receipt) only exists once you have opened activity. Without it, there is nowhere to issue one.

There is a handy exception for very occasional work: the ato isolado (one-off act). If you invoice a single time (or rarely) and the amount is low, you can issue an ato isolado without opening activity. But the moment this becomes recurring, opening activity is the right path — and a cheap one.

Before you start: what you need to have

It is three things. If you have been living and working in Portugal for a while, you probably already have all three.

• NIF — your tax identification number. It is what identifies you at Finanças (the tax office). If you do not have one yet, it is the very first step of all (we have a whole guide just on that).
• NISS — your Social Security identification number. You will need it because, when you open activity, Segurança Social (Social Security) is notified automatically and your status as self-employed kicks in.
• Access password for the Portal das Finanças — to submit the request online. If you do not have one, you request it on the portal itself and it arrives by post within a few days (this is often the slowest part of the whole process).

If you are still waiting for the Finanças password, you can still open activity by going to a Finanças desk in person with your ID document and NIF. It means more time in a queue, but it is sorted the same day.

Choosing your activity code (CAE / article 151)

This was the part where I hesitated most. On the form you have to state what you do, and there are two ways to code it:

• Table of article 151 of the CIRS (personal income tax code) — a list of professional activities (programmer, designer, translator, consultant, doctor, etc.). It is the one most service providers use. It has its own codes, such as "1332 - Computer programmers".
• CAE (Classification of Economic Activities) — used when your activity does not fit the article 151 list, for example retail, catering or mixed activities.

You can have more than one code if you do different things. The code you choose has a real effect: it sets the coefficient that the simplified regime applies to your income (see the next section) and can determine whether or not you fall under certain rules. Do not make it up — pick the one that really describes what you do. If you are torn between two, go with the one closest to the bulk of your billing.

IRS: simplified regime or organised accounting

The form asks you how you want to be taxed on IRS (personal income tax). There are two options, and for those just starting out the answer is almost always the same.

Simplified regime

It is the default regime for anyone billing up to €200,000 a year. You do not need an accountant. The logic is simple: the State assumes that part of your income is expenses and only taxes a fraction. For services on the article 151 list, a coefficient of 0.75 applies — that is, 75% of what you invoice is treated as taxable income and the other 25% is presumed to be expenses.

There is a catch many people do not know about: part of those presumed expenses has to be justified. You have to show expenses equivalent to 15% of gross income (invoices with your NIF, automatic deductions, etc.); whatever you fail to justify is added back to your taxable income. In practice, keeping invoices for your professional expenses throughout the year takes care of this.

Organised accounting

Here you declare your real expenses instead of a presumption. It requires a certified accountant and monthly costs with them. It only pays off when your real expenses are greater than the 25% presumed by the simplified regime — typically high-cost activities (equipment, materials, office, subcontracting).

VAT: article 53 exemption or the normal regime

The second big choice on the form is IVA (VAT). Again, for those starting small the answer is usually clear.

The article 53 exemption exists precisely so as not to burden those who bill little. As long as you stay below the annual limit, you mark your invoices as "IVA — regime de isenção (art. 53.º)" (VAT — exemption regime) and that is it.

Watch out for the exit thresholds, because there are two of them and they are easy to confuse:

• If you go over €15,000 in a year, you lose the exemption from the following year.
• If you exceed it by more than 25% — that is, above €18,750 — the obligation to charge VAT is immediate: the very invoice that breaks the limit must already include VAT.

In either case, you must file a declaração de alterações (declaration of changes) on the Portal das Finanças within the legal deadlines. These limits changed with Decree-Law no. 35/2025, so always confirm the figure in force on the official article 53 page.

Submitting on the Portal das Finanças

With the choices made, the registration itself is quick. It is all done through the Declaração de Início de Atividade (declaration of commencement of activity), and it is free.

1. 1
   Log in to the Portal das Finanças
   Log in with your NIF and password. Look for "Início de Atividade" (Start of Activity) in the Citizens / Submit / Declarations menu.
2. 2
   Fill in the activity details
   Start date, the code (article 151 or CAE), and your projected turnover for the year. This projection is what determines your initial VAT status — be realistic.
3. 3
   Choose the regimes
   The simplified IRS regime and the article 53 VAT exemption, if that is your case. The form applies the defaults based on your projection, but check each field.
4. 4
   Review and submit
   Review the summary and submit. You get the confirmation immediately. Segurança Social is notified automatically — you do not have to do anything on their side to open.

If you would rather, the same can be done at a Finanças desk with the help of a clerk. You take your ID document and NIF; you leave with activity opened the same day.

Issuing your first green receipt

As soon as activity is open, you can issue green receipts the same day, also on the Portal das Finanças (the "Recibos Verdes Eletrónicos" / "Faturas e Recibos Verdes" section). Each document is free.

On the first receipt you will have to decide two things that tend to trip up beginners:

• IRS withholding at source — for article 151 services, 23% is normally withheld for clients that are companies/entities with organised accounting (the standard rate has been 23% since the 2025 State Budget; you can choose to withhold at 25% if you want to pay more upfront). Some people are exempt from withholding while they expect low billing. The withheld amount is not extra tax: it is an advance payment that is reconciled in the annual IRS return.
• VAT — if you are on the article 53 exemption, you mark the exemption reason. If you are on the normal regime, you add VAT at the applicable rate.

To work out how much you actually keep from each receipt, after IRS and Social Security, use our calculator — it is the number that matters when you negotiate prices with clients.

Segurança Social: the first-year exemption and the quarterly declarations

This is the part that brings the most relief at the start, and the one that causes the biggest frights later. It is worth understanding well.

The first 12 months

If you have never had independent activity (or have not exercised it recently as a TI, self-employed worker), you benefit from an exemption from contributions for the first 12 months, counted from the date activity started — not by calendar year. During that period you neither pay nor file the first quarterly declaration. It is automatic.

The flip side: those 12 months do not count towards your contribution record (pension, benefits). If you want them to count, you can choose to contribute anyway. It is a personal decision — I took the exemption, but it is worth knowing it exists.

After that: the quarterly declaration

Once the first year is over, you enter the normal contribution regime. It works like this:

• Four times a year you file the quarterly declaration on Segurança Social Direta (the online portal), by the last day of January, April, July and October. Each one reports what you invoiced in the previous three months.
• Segurança Social calculates your relevant income — for services, 70% of what you invoiced.
• The monthly base is one third of that relevant income, and the 21.4% rate is applied to it.
• There is a minimum contribution base, so even with low billing you pay a minimum monthly amount. Payment is made between the 10th and 20th of the following month.

The minimum base and the maximum limit are updated every year with the IAS (social support index), so always check on the official Segurança Social page. For your concrete estimate, the calculator does the maths for you.

Common mistakes (that I have seen happen)

• Forgetting the quarterly declaration after the first year. Because the first year is exempt, it is easy to fall into the habit of doing nothing — and then miss the first mandatory filing. Set a reminder for the end of January, April, July and October.
• Choosing organised accounting out of fear. For most service providers starting out, the simplified regime is cheaper and enough. You can always switch later.
• Underestimating the turnover projection on the form to "dodge" VAT. If you then exceed the limits, sorting it out is a hassle and the immediate-exit thresholds (€18,750) catch you mid-year.
• Leaving activity open and forgotten. If you have stopped billing, close the activity (cessação). Otherwise, the obligations keep running.
• Not keeping expense invoices. Under the simplified regime you need to justify expenses equivalent to 15% of income. Keeping receipts with your NIF throughout the year avoids paying too much tax.

Opening activity is, at heart, a free fifteen-minute form. The value of this guide is not in the "how to click" — it is in knowing what to choose in each field and what awaits you in the following months. When you are ready for the numbers, the calculator alongside shows you the real net figure.