Freelancing and daytrading in Portugal

[BobaKH202]

Hello all,

I will be moving to Portugal in three months and was curious if anyone has experience or advice for me on how to best optimize my tax situation.

In short, I am an American AND EU Citizen (Sweden) and will be working part-time as a freelancer for my company in Belgium, while living in Portugal. I will be invoicing them around 2500 EUR a month while ALSO day-trading as a hobby.

It is my understanding that I can register as a service provider freelancer in Portugal and would only pay taxes on 35% of my income on a marginal basis (in the end, only paying around 10-12% on my total annual gross income).

While the above is quite straight forward for me, I also day trade as a hobby and while my annual profits are still quite low (maybe 10-20k), if I do this full time with my current strategy, I could see myself in a couple of years making 100k plus a year.

Would it be wisest for me to simply work as a freelancer as per the above example and just pay my capital gain taxes at the Portuguese rate of 28%, or already from the getgo set up a company somewhere else (say Romania or somewhere else - and keep the money there?) Is any system like that even feasible?

I am curious if my American citizenship complicates this even further as I understand that while my freelance income won't be subject to additional taxes in the US, my capital gains taxes might.

Best regards

David

 

[JustAnotherNomad]

Look into the NHR program and talk to a Portuguese tax lawyer, ideally one who has experience with US citizens. Or talk to a Portuguese tax lawyer and a US CPA who has experience with expats.

 

[Praising shores]

If you can classify yourself as residente não habitual you won't need to pay taxes for 10 years for income received offshore.

 

[JustAnotherNomad]

If you can classify yourself as residente não habitual you won't need to pay taxes for 10 years for income received offshore.

It's not so simple and this has also been discussed many times before. If work is done in Portugal, there is always some risk that it will be taxed in Portugal, even if the company is registered offshore.
Be sure to always work with good lawyers who have experience with this.

 

[BobaKH202]

Thank you for both comments received so far. I have read quite a lot into this and it seems like the NHR regime may not be that useful, as any day trading income still will be Portuguese income, if I do the majority of trading in Portugal, and would therefor still be eligible for Portuguese taxes.

 

[JustAnotherNomad]

Yes, but if you're moving to Portugal anyway, you may still be better off with the NHR regime than without it. And you may be able to use a Cypriot company for the trading activity. But you should really speak to a good lawyer.

 

[fatcat1970]

Thank you for both comments received so far. I have read quite a lot into this and it seems like the NHR regime may not be that useful, as any day trading income still will be Portuguese income, if I do the majority of trading in Portugal, and would therefor still be eligible for Portuguese taxes.

From what I understand a NHR can spend a few months outside of Portugal each year without losing their NHR status. If during this period outside of Portugal you do day trading would that be classed as Portuguese income?

 

[JustAnotherNomad]

From what I understand a NHR can spend a few months outside of Portugal each year without losing their NHR status. If during this period outside of Portugal you do day trading would that be classed as Portuguese income?

Most likely, yes. But you should ask a lawyer if there's away to avoid that. Maybe you could avoid it if you trade as a foreign company, but then that company needs to have other activity than just trading, otherwise it would be a CFC.

 

[eurmo]

Hello!

Did you ever figure out what works best for you as a freelancer and day trader? I’m in the exact same position as you are and would love to hear your insight.

I’ve been a freelancer for a while but recently started day trading.

Thanks in advance