Freelancer or Company in Portugal? Recibos Verdes Versus an Lda

Many people who move to Portugal work for themselves, whether they are on a D7, D8 or D2 visa. The first decision is how to do it: as an individual freelancer, known as trabalhador independente (and popularly recibos verdes), or through a company. Neither is always better.

Working as a freelancer

You register your activity with the tax authority and issue invoices in your own name. It is quick, cheap and needs very little structure. Your income is taxed as personal income (IRS). Under the simplified regime, which most freelancers use, tax is calculated on a fixed share of your turnover instead of on actual expenses. For most professional services that share is 75% of what you invoice, and then personal income tax rates apply to it.

VAT for freelancers

Freelancers with annual turnover up to €15,000 can usually be exempt from charging VAT. Above that, you charge VAT, normally 23%, and file VAT returns. The exemption helps if your clients are individuals, and matters less if they are VAT-registered businesses that can reclaim it anyway.

Social security

Freelancers contribute to social security based on their income, with a rate on a share of what they invoice. This is a real, recurring cost that should be part of your calculation from day one.

Working through a company

With an Lda or a single-owner Lda, the company invoices and you become its manager. Corporate tax is 19% in 2026, with 15% on the first €50,000 for qualifying small companies (see our IRC guide). When you take profit out as dividends, there is a further tax at the personal level, so the total burden has to be compared, not just the company rate. You can also pay yourself a salary, which brings social security on payroll.

When a company starts to make sense

• Liability: you want to separate business risk from personal assets.
• Retaining profit: you plan to reinvest rather than draw all the money.
• Partners or investors: you will not work alone.
• Larger contracts: clients prefer to deal with a company.
• Scale: your income is high enough that the extra accounting cost is outweighed by the tax result.

When freelancing is enough

If you work alone, have moderate income, and want low administration, freelancing is often the better start. You can always move to a company later when the numbers justify it.

It also affects your visa

If you are on or applying for a visa that depends on self-employment or your own business, how you work needs to match your documents. Talk to us before choosing so the structure and the visa fit together.

General information, not tax advice. The best option depends on your income and situation.