Moving to Portugal as a remote worker or freelancer sounds simple, but the setup process can be confusing. Many people face unexpected fines, delays, or even legal trouble because they miss critical steps or rely on outdated information. Understanding how NIF, NISS, Finanças, and AIMA connect is key to a smooth start.
Why your Portugal freelancer setup is a single, linked process
Setting up as a freelancer in Portugal involves more than just registering your business. It is a series of interconnected steps. Your tax number (NIF), social security number (NISS), registration with the tax authority (Finanças), and immigration appointments (AIMA) are all part of one system. Missing or delaying one piece can cause problems for all the others. This is especially true with new rules taking effect in 2025.
The NISS trap: Why you need it before your AIMA appointment
Many remote workers arrive in Portugal and are told they do not need a social security number (NISS) until after their AIMA residence permit appointment. This is a common and costly mistake. Starting April 28, 2025, AIMA only accepts complete applications. If your NISS is missing, your application will be rejected, and you will need to rebook. This means more waiting and more stress.
You can apply for your NISS online (pedir o NISS) through the Social Security portal. You will need your NIF and proof of address. While you can register your freelance activity with Finanças before getting your NISS, you must have your NISS ready for your AIMA appointment.
Registering your freelance activity with Finanças (abrir atividade)
Before you start earning money as a freelancer in Portugal, you must register your activity with Finanças, the tax authority. This is called “abrir atividade” (open activity). You can do this online through the Portal das Finanças or in person.
When you register, you will need to choose your activity codes (CAE or CIRS). CIRS codes are for professional services, while CAE codes are for business activities or product sales. Portugal introduced new CAE Rev.4 codes in January 2025, so make sure you use the correct ones. You can have one main CIRS code and up to four secondary ones, or one main CAE and up to 19 secondary ones.
This registration is essential for issuing invoices (recibos verdes) and for your tax obligations.
Understanding Portugal’s freelancer tax rules
Freelancers in Portugal generally fall under the Simplified Regime (Regime Simplificado) if their annual income is under €200,000. Under this regime, your income tax is calculated based on fixed percentages, and you do not need an accountant. For professional services, 75 percent of your gross income is taxable.
VAT (IVA) obligations: If your annual income as a freelancer goes over €15,000 (in 2025), you must register for VAT (IVA) and start charging it on your invoices. The standard VAT rate is 23 percent. Many freelancers miss this threshold, which leads to fines and back taxes.
Income declaration: You will need to submit quarterly earnings statements to Social Security and annual tax returns between April 1 and June 30. If you are VAT registered, you will also have monthly or quarterly VAT returns.
Not sure where you stand with your tax or social security obligations? Run a free Portugal Setup Check here. It takes 2 minutes.
Avoiding double social security payments
A common financial drain for remote workers in Portugal is paying social security in two countries. If you work for a company based in the US, the UK, or another EU country while living in Portugal, you might contribute to both your home country’s social security system and Portugal’s. This means extra deductions from your income.
Portugal has agreements, like Totalization Agreements with the US or EU regulations, to prevent this. These agreements allow you to pay into only one system. However, you must actively claim this exemption and get the necessary certificates, like an A1 certificate for EU or EEA countries or a Certificate of Coverage for the US. Most people do not know about these agreements or how to claim them.
New freelancers are exempt from social security contributions for the first 12 months after registration. After this period, the standard rate is 21.4 percent of your relevant income, which is typically 70 percent of your gross income.
The NHR 2.0 reality: What it means for new arrivals
The Non Habitual Resident (NHR) tax regime was a big draw for remote workers moving to Portugal. However, the NHR regime officially closed at the end of 2023. Many new arrivals in 2024 or 2025 mistakenly believe they can still apply for it.
You only qualify for a transitional NHR regime if you meet very specific, strict criteria, such as having started your visa application or signed a rental agreement before the end of 2023. For most new remote workers, NHR is no longer an option. You will fall under the general Portuguese tax regime or potentially the new “Incentive to Scientific Research and Innovation” tax regime, which has different rules. Do not make financial plans based on NHR if you are a new arrival.
Common mistakes remote workers make and how to prevent them
- Misunderstanding the 183 day rule: If you spend 183 days or more in Portugal within any 12 month period, you are considered a tax resident. This means you may owe tax on your global income. Track your days carefully.
- Thinking your D7 or D8 visa means you are compliant: Your visa grants you the right to live here, but it does not automatically register you with all authorities. You must register with Finanças and provide proof to AIMA within 30 days of your visa activation.
- Delaying freelancer registration (NISS): If you are working as a freelancer, you must register your activity with Finanças and then with Segurança Social promptly. Delays lead to fines and back payments.
- Incorrect tax regime selection: Calculate your income projections to choose the best tax regime for you.
- Relying on outdated information: Rules change often. Always check for the latest information from official sources or trusted experts.
FAQ
Q: What is the 183 day rule in Portugal?
A: The 183 day rule states that if you spend 183 days or more, consecutive or not, in Portugal within any 12 month period, you are considered a tax resident and may owe tax on your global income.
Q: Does my D7 or D8 visa make me tax compliant in Portugal?
A: No, holding a visa does not automatically make you tax compliant. You must separately register with the Portuguese tax authorities (Finanças) and provide proof to the immigration agency (AIMA) within 30 days of your visa activation.
Q: What happens if I delay my NISS registration as a freelancer in Portugal?
A: Delaying NISS registration can lead to fines of €150 to €300, monthly penalties of €50, and mandatory back payments on social security contributions. You may also face issues with VAT if your income exceeds €15,000 annually.
Q: How can I avoid paying social security in two countries while working remotely in Portugal?
A: If your home country has a social security agreement with Portugal, you can apply for a certificate that exempts you from Portuguese social security contributions, allowing you to pay into only one system.
Q: Can I still apply for the NHR tax regime in Portugal in 2025?
A: The NHR tax regime closed at the end of 2023 for most new arrivals. You can only qualify for a transitional NHR regime in 2024 or 2025 under very specific, strict criteria.
