Still confused whether to use your US LLC or register as a freelancer in Portugal? You are not alone. Many remote workers assume their foreign company protects them from Portuguese tax. But if you are in Portugal for more than 183 days, or earning locally, your global company might be a tax risk.
Having a US LLC does not mean you are immune to Portuguese tax. And just registering a freelancer activity is not always safer either. Here is how to know what fits your case. This guide compares the D8 visa, freelancer setup, and LLC usage, and how to stay compliant without overpaying or triggering audits.
Who This Guide Is For
This guide is for remote workers, US citizens, digital nomads, and high income freelancers living in or planning to move to Portugal. If you work online, live in Portugal, and do not know how to legally get paid, this is for you. If you are asking, “Should I use my US company or open atividade (activity)?” or “What are the tax and visa consequences of each option?”, you will find answers here. We also address whether you need a Portuguese accountant if you already pay US tax.
What the D8 Visa Requires
The Portugal D8 Visa, also known as the Digital Nomad Visa, is for remote workers, freelancers, and independent contractors who earn income from outside Portugal. Introduced in October 2022, the D8 allows non EU, EEA, or Swiss nationals to live and work legally in Portugal.
There are two versions of the D8 Visa:
- Temporary Stay Visa: Valid for up to one year, renewable for short periods. This is for those who want to try living in Portugal without committing long term.
- Residency Visa: Valid initially for four months. After this, you apply for a two year residence permit. This option can be renewed and eventually lead to permanent residency or citizenship.
To qualify, you must show a stable remote income, meet minimum earnings, and provide documents proving you work for a foreign employer, operate a business, or freelance for international clients.
Key D8 Visa Requirements:
- Non EU, EEA, or Swiss citizen: This visa is specifically for those outside these regions.
- Remote work: You must work remotely as a salaried employee, contractor, freelancer, or business owner for clients or companies outside Portugal.
- Minimum income: You must show a monthly income equal to at least 4× Portugal’s minimum wage (currently around €3,280–3,500/month, depending on updates). This is confirmed by the Ministry of Foreign Affairs visa instructions for national residency visas. If you bring family, you need more: 50% extra for a spouse (€1,640 per month) and 30% per dependent child (€984 per month).
- Clean criminal record: You must provide a criminal record certificate from your country of residence and any countries where you have lived in the past five years. It must be issued within 90 days, include an Apostille, and be translated into Portuguese (if needed) and legalized by the Portuguese consulate.
- Accommodation proof: You need a valid lease, hotel booking, Airbnb reservation, or a signed letter from a host in Portugal. Ideally, this should cover 12 months.
- NIF (Portuguese Tax Number): You will need a NIF (Número de Identificação Fiscal) to open a bank account and apply for residency. You can get it in person at a Finanças (Tax Office) or Loja do Cidadão, or through a local representative or lawyer if applying remotely.
- Portuguese Bank Account: Open a bank account before your AIMA (formerly SEF) appointment. Most banks require your passport, NIF, proof of address, and proof of income.
- Health Insurance: Provide proof of health insurance valid in Portugal, covering a minimum of €30,000 for you and any dependents for at least the first four months. Travel insurance is not accepted.
Once you have your D8 visa, you must spend at least 183 days per year in Portugal to maintain your residence permit and tax residency.
What “Freelancer Setup” Means in Portugal
If you plan to work independently in Portugal, you will likely register as a “trabalhador independente” (independent worker) or freelancer. This involves a few key steps with the Portuguese tax authority (Finanças) and social security (Segurança Social).
NIF, NISS, and Recibos Verdes
- NIF (Número de Identificação Fiscal): This is your Portuguese tax identification number. It is the first step for any financial activity in Portugal, including registering as a freelancer.
- Atividade Aberta (Activity Opened): After getting your NIF, you must register your freelance activity with Finanças. This can often be done online through your tax authority account. You will need to associate an address with your activity, which can be your home address.
- NISS (Número de Identificação da Segurança Social): Freelancers must register with the social security system. This ensures compliance with national social protection requirements and contributes to your eligibility for benefits like healthcare and pension.
- Initial Exemption: New freelancers are exempt from paying social security contributions during their first 12 months but must still submit quarterly income reports. If your income is zero or very low, a minimum contribution of €20 may still apply after the exemption ends.
- Quarterly Reporting: Every quarter, you report your income for the previous three months to Segurança Social. This is done through the Segurança Social Direta online service.
- Contributions: After the first year, your social security contributions are due monthly, based on your average income from previous quarterly reports. Contributions are generally applied to 70% of your income, with options to reduce the base.
- Recibos Verdes (Green Receipts): Each time you receive payment from a client, you must issue a “green receipt.” This functions like an invoice, documenting the transaction for tax purposes. You can issue these through your online tax authority account.
Taxation and Expense Deductions for Freelancers
If you’re a freelancer in Portugal earning under €250,000 per year, you can use the simplified tax regime. The tax office assumes 25% of your income is business expenses, so you’re only taxed on the remaining 75%. You don’t need to show receipts for that. It’s automatic.
But: Social security is calculated differently. They count 70% of your income as your base, and charge 21.4% on that. You report income every 3 months and pay monthly. The first 12 months are exempt from payments, but you still need to report.
As a Portuguese tax resident, you must declare all your worldwide income, including income from foreign sources like investments or clients outside Portugal. You also need to report any foreign bank accounts in your annual tax return, filed between April 1 and June 30.
Not sure which path is safer? Run a free Portugal Setup Check here.
US LLC vs PT Freelancer: Key Differences
This is where many remote workers get it wrong. The choice between maintaining a US LLC and registering as a Portuguese freelancer has major tax and compliance implications.
Tax Residency Impact
The most critical factor is your tax residency. If you spend more than 183 days, consecutive or not, in Portugal in any 12 month period, or if you maintain a habitual residence in Portugal with the intention to use it as your primary residence, you become a Portuguese tax resident. This means Portugal taxes your worldwide income.
US LLCs and Portuguese Taxation
Many remote workers believe their US LLC protects them from Portuguese taxes, especially if they are paid through it. However, Portuguese tax authorities often view US LLCs differently than the US IRS does.
- Opaque vs. Transparent: In the US, many LLCs are “pass through” entities, meaning the income is taxed at the individual level, not the company level. Portugal, however, may not treat a US LLC as tax transparent. Unless an LLC fits very specific categories (like professional societies), its income might be classified as “other income” and taxed at a flat rate (e.g., 28%) in Portugal, even if you are already paying US taxes.
- Place of Effective Management: If your US LLC is managed or directed from Portugal, it could be considered a tax resident in Portugal. The “place of effective management” is where key management decisions are made. If you are the sole owner and manager, and you are in Portugal, this is a significant risk.
- Permanent Establishment: Even if your LLC is not considered a Portuguese tax resident, having a permanent physical presence or a director in Portugal could create a “permanent establishment,” leading to taxation of income sourced in Portugal.
- Double Taxation: While Portugal has double taxation agreements (DTAs) with many countries, including the US, these agreements do not always prevent issues with LLCs. The DTA might prevent double taxation on the same income, but if Portugal interprets your LLC’s income differently (e.g., as company profit vs. individual income), you could face unexpected tax liabilities.
Portuguese Freelancer (Trabalhador Independente)
Registering as a “trabalhador independente” makes your income clear to Portuguese authorities. Your income is directly tied to your individual tax residency in Portugal.
- Clear Tax Path: Your income is taxed under the Portuguese personal income tax system (IRS), which is progressive up to 48%. However, the simplified regime (75% taxable income) can reduce your effective rate.
- Social Security Integration: You contribute to the Portuguese social security system, which provides access to local benefits.
- Compliance: This setup is designed for individuals working independently in Portugal, making compliance straightforward if you follow the rules for NIF, NISS, and Recibos Verdes.
How the 183 Day Rule Changes Everything
The 183 day rule is the cornerstone of Portuguese tax residency.
- Physical Presence: If you spend more than 183 days, consecutive or not, in Portugal within any 12 month period that starts or ends in the fiscal year, you become a tax resident.
- Habitual Residence: Even if you spend less than 183 days, if you maintain a residence in Portugal with the intention to use it as your primary home, you can be considered a tax resident from day one.
Once you are a tax resident, Portugal taxes your worldwide income. This means income from your US LLC, or any other foreign source, becomes subject to Portuguese tax laws. This is why simply having a US LLC does not exempt you. Your personal tax residency dictates your obligations.
Common Traps
Remote workers often fall into these traps:
- Thinking US tax equals global compliance: Many believe that as long as they pay taxes in the US, they are compliant everywhere. This is false. If you are a tax resident in Portugal, you must comply with Portuguese tax laws on your worldwide income.
- Forgetting social security: The social security system (Segurança Social) is separate from tax. Even with the initial 12 month exemption, you must register and submit quarterly reports. Failing to do so can lead to penalties and issues with future benefits.
- Delaying freelancer setup too long: Some remote workers wait until they have been in Portugal for months or even years before registering as a freelancer. This can lead to significant back taxes, fines, and legal complications. It is best to set up your activity as soon as you establish tax residency or begin earning income in Portugal.
- Misunderstanding LLC treatment: Assuming your US LLC is treated the same way in Portugal as it is in the US is a common and costly mistake. Portugal’s interpretation can lead to unexpected tax liabilities.
- Ignoring the 183 day rule: Not tracking your days in Portugal can inadvertently trigger tax residency, leading to unforeseen tax obligations.
What We Recommend (Decision Tree)
Choosing the right setup depends on your specific situation and goals.
- If you work for US clients only and plan a short stay (under 183 days): You might not trigger Portuguese tax residency. However, be cautious about the “habitual residence” rule. If you establish a home here, you could still be considered a tax resident.
- If you work for US clients only and plan to stay long term (over 183 days) or apply for citizenship: You will become a Portuguese tax resident. In most cases, registering as a “trabalhador independente” (freelancer) in Portugal is the clearest and most compliant path. You will declare your worldwide income and pay Portuguese taxes. You should consult with a Portuguese tax lawyer to understand how your US LLC income will be treated. Often, it is simpler to dissolve the LLC or restructure your income flow to be directly as a freelancer.
- If you have a family or plan to stay long term: Long term stability and compliance are key. A D8 residency visa combined with a proper Portuguese freelancer setup is generally recommended. This provides a clear legal status for you and your family and integrates you into the Portuguese tax and social security systems.
This is not theory. We have helped hundreds of remote workers fix this exact issue.
How to Get Help
Navigating Portuguese tax and immigration laws can be complex. Do not risk non compliance.
- Check your setup: Not sure which path is safer, or if you are already out of compliance? Run a free Portugal Setup Check here.
- Get expert help: For complex questions or to solve urgent legal or tax issues fast, book a Clarity Call with a licensed Portuguese immigration or tax lawyer.
- Start here: For a central starting point to all our tools and resources, visit our Start Here page.
Frequently Asked Questions
Q: Do I need to pay US taxes if I am a tax resident in Portugal?
A: If you are a US citizen or Green Card holder, you generally have a US tax obligation on your worldwide income regardless of where you live. However, the US has mechanisms like the Foreign Earned Income Exclusion and foreign tax credits to help prevent double taxation. You should consult a tax professional specializing in US and Portuguese tax law.
Q: Can I keep my US LLC if I move to Portugal?
A: You can keep your US LLC, but its income may be subject to Portuguese taxation if you become a tax resident. Portugal may not treat your LLC as a pass through entity, leading to unexpected tax liabilities. It is crucial to understand the implications and potentially restructure your business or income flow.
Q: How do I register as a freelancer in Portugal?
A: You need a NIF (tax number), then you open your activity (atividade aberta) with Finanças, and register with Segurança Social for social security. You will then issue Recibos Verdes (green receipts) for your services.
Q: What is the 183 day rule?
A: The 183 day rule states that if you spend more than 183 days, consecutive or not, in Portugal within any 12 month period, you become a Portuguese tax resident. This means your worldwide income is subject to Portuguese taxation.
Q: What happens if I do not register as a freelancer in Portugal?
A: If you are a tax resident in Portugal and earning income without registering your activity, you are operating illegally. This can lead to significant fines, back taxes, and legal issues with Portuguese authorities.
Sources:
U.S. Small Business Administration. (2025, March 7). Register your business. U.S. Small Business Administration.
Instituto da Segurança Social. (2025, May 9). Trabalhador independente. Segurança Social.
Ministério dos Negócios Estrangeiros. (n.d.). Residência: Documentação instrutória para vistos nacionais. Portal das Comunidades Portuguesas.