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Chapter 8 of 21

Starting a Business

Empresa, freelance & tax regime

Starting a Business

Company, freelance & tax regime

This chapter is for informational purposes only. Always consult a professional.

Sources: eportugal.gov.pt | racius.com | at.gov.pt

Business forms

FormSuitable ForNote
Trabalhador IndependenteFreelancers, self-employedSimple, recibos verdes
Empresa Individual (ENI)Sole proprietorshipUnlimited liability
Unipessoal LdaSingle-member LLCLimited liability, €1 capital

Sociedade Lda LLC with partners Limited liability

Freelancing (Trabalhador Independente)

  • Register with Finanças (open activity)
  • First year: exempt from social security contributions
  • Afterwards: 21.4% on 70% of income (effective ~15%)
  • Invoice via recibos verdes (portaldasfinancas.gov.pt)
  • IVA (VAT): exempt under €15,000/year, afterwards 23%
  • Simplified regime: taxed on 75% of turnover (25% automatic deduction)

Unipessoal Lda for Growth

If your turnover exceeds EUR 40,000-50,000, a Unipessoal Lda (single-member LLC) becomes fiscally advantageous. IRC rate: 19% (15% for first EUR 50,000 SME). Incorporation can be done online via Empresa na Hora (~EUR 360).

Tax Regimes Comparison

AspectFreelance (Simplificado)Unipessoal Lda
Incorporation costsFree~€360
Accountant requiredNo (up to €200k)Yes (TOC: ~€100-300/month)
Tax rateProgressive IRS (12.5-48%)IRC: 15-19%
Taxable base75% of turnoverProfit after cost deductions
Social contributions21.4% on 70% incomeVia salary + employer contribution
VAT thresholdExempt <€15,000Always VAT liable
LiabilityPersonal (unlimited)Limited (up to contribution)
PrestigeLowerHigher (Lda in name)

Sector-specific Tips

  • IT / Tech — IFICI regime can offer 20% flat tax. High demand in Portugal
  • Hospitality / Tourism — Seasonal. Alojamento Local (AL) license required
  • Construction / Renovation — Alvara (building permit) required. IMPIC registration
  • Agriculture — Subsidies available via IFAP. Organic = premium market
  • E-commerce — OSS regime for EU sales. VAT in customer country above €10k
  • Consulting — Recibos verdes ideal. Watch out for permanent establishment rules

Common Mistakes

  • Not registering with Finanças — Open activity BEFORE you start invoicing.

  • Exceeding IVA threshold — Above EUR 15,000: VAT payment mandatory.

  • No accountant (TOC) — For Contabilidade Organizada or Lda: TOC mandatory.

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Glossary
  • NISS (Social Security Number)

    The Portuguese social security number. You need your NISS if you plan to work in Portugal or start as a freelancer. It is also required for access to certain social benefits and allowances.

  • SEF/AIMA (Immigration Service)

    The former Portuguese immigration service SEF was replaced by AIMA in 2023 (Agency for Integration, Migration and Asylum). AIMA handles residence permits, visa applications and all immigration matters. Wait times can be long, so start your application early.

  • IRS (Personal Income Tax)

    Portuguese personal income tax. The IRS return is filed annually between April and June. Rates range from 14.5% to 48% depending on income. Tax residents must declare their worldwide income.

  • ISV (Vehicle Registration Tax)

    Tax when registering or importing a vehicle in Portugal. The ISV amount can be substantial, especially for older or polluting vehicles. EU citizens who relocate may be eligible for exemption under certain conditions.

  • CPCV (Promissory Purchase Agreement)

    The preliminary purchase contract when buying property in Portugal. Upon signing you typically pay a 10-20% deposit (sinal). If the buyer withdraws, they lose the deposit; if the seller withdraws, they must repay double the amount.

  • CertidĂŁo de Teor (Property Registry Extract)

    An extract from the Portuguese property registry at the ConservatĂłria. The CertidĂŁo de Teor shows who owns a property and whether there are mortgages or liens on it. Always check before purchasing a property.

  • Junta de Freguesia (Parish Council)

    The local administrative body at neighborhood level, comparable to a Dutch district council. At the Junta de Freguesia you can request an Atestado de ResidĂŞncia (proof of residence) among other things. It is often your first point of contact for local matters.

  • ConservatĂłria (Registry Office)

    The Portuguese registry office for property and civil status. At the ConservatĂłria, property transfers, marriages and births are registered. For property purchases, registration at the ConservatĂłria do Registo Predial is mandatory.

  • TĂ­tulo de ResidĂŞncia (Residence Permit)

    The Portuguese residence permit card, comparable to a Dutch residence permit. After approval of your visa application, you receive a TĂ­tulo de ResidĂŞncia allowing you to legally live and work in Portugal.

  • Multibanco

    The Portuguese payment network and ATM system. Multibanco is not only used for cash withdrawals, but also for paying bills, taxes and even concert tickets. It is an essential part of daily life in Portugal.

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