How to open your activity as self-employed in Portugal (Finanças)

What it is

To work for yourself in Portugal (as a freelancer, consultant or sole trader, often called trabalhador independente or working on recibos verdes), you declare the start of your activity (início de atividade) to the tax authority (Autoridade Tributária, or Finanças).

You must do it before you start, and at the latest on the day you give as your start date. It's free.

Non-EU citizens need a residence permit or visa that allows independent work.

Before you start

You'll need:

• Your NIF and your Portal das Finanças password.
• Your NISS (social security number), or request it at the same time.
• Your activity code: the CIRS code (for professions) or CAE code (for business activities).
• Your expected yearly turnover: it decides your VAT and tax regime.

Steps

1. Sign in to the Portal das Finanças and open the start-of-activity declaration (declaração de início de atividade). You can also go to a tax office.
2. Choose your activity code and give your start date and expected turnover.
3. Check your VAT regime. If you expect to earn less than €15,000 a year, you can usually be exempt from VAT (article 53 of the VAT Code), unless your activity is excluded.
4. Submit. Finanças tells Social Security automatically.
5. Issue an invoice or invoice-receipt (fatura-recibo, the "green receipt") for each job, through the Portal das Finanças or certified software.
6. Social Security: your registration takes effect after 12 months, and you usually pay no contributions in that first year. After that you send a quarterly declaration of your income and pay monthly.
7. Each spring, include your income in your IRS return.

Cost

Opening your activity is free.

Common pitfalls

• Opening it after you start. Declare before your first job, at the latest that day.
• Choosing the wrong code. It affects how your income is taxed.
• Forgetting the quarterly Social Security declarations once the first year is over.
• Passing €15,000 without telling Finanças. You then have to start charging VAT.

When to ask a helper

Ask someone with a similar job who opened activity recently: they'll know which code they used and how the first Social Security year worked.