Self-employment

Working for yourself in Portugal

Many people turn to self-employment or start a business to make a living, although this path is strewn with pitfalls for the newcomer.

Most foreigners don’t do sufficient homework before moving to Portugal. While hoping for the best, you should plan for the worst case scenario and have a contingency plan and sufficient funds to last until you’re established (this also applies to employees).

If you’re planning to start a business in Portugal, you must also do battle with the notoriously obstructive bureaucracy (good luck/ ¡boa sorte!).Note that it’s difficult for non-EU nationals to obtain a residence permit to be self-employed in Portugal.

Self-employment

If you’re an EU-national or a permanent resident with a residence card ( autorização de residência), you can work as a self-employed person or as a sole trader in Portugal.

If you want to be self-employed in a profession or trade in Portugal, you must meet certain legal requirements and register with the appropriate organisation, as applicable. Under Portuguese law a self-employed person may require an official status and it may be illegal to simply hang up a sign and start business.

Members of some professions and trades must possess professional qualifications and certificates recognised in Portugal and are usually required to sit a written examination in Portuguese. In certain professions, such as the law, it’s unusual to be permitted to practise in Portugal without Portuguese qualifications.

As a self-employed person you don’t have the protection of a limited company should your business fail, although there are certain tax advantages. It may be advantageous to operate as a limited company such as a  Sociedade por Quotas (Lda).

Obtain professional advice before deciding whether to operate as a sole trader or form a company in Portugal, as it has far-reaching social security, tax and other consequences. All self-employed persons must register for income tax, social security and VAT ( IVA), and anyone with an income in Portugal requires a foreigner’s identification number ( numero de contribuinte), obtainable from your local tax office ( finanças).


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