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Prostitution in Portugal is legal, but it is illegal for a third party to profit from, promote, encourage or facilitate the prostitution of another. The legal status of prostitution in Portugal has changed several times. In , a harsh law dealing with sexually transmitted diseases came into effect, placing further restrictions on the registration of workers and forbidding the opening of any new houses.
Existing houses could be closed if thought to provide a threat to public health. An inquiry at the time estimated that there were 5, workers and houses, and appeared confined to the major urban areas of Lisbon, Porto, Coimbra and Evora.
However, it was recognised that registered workers represented only a portion of the total population; this law was intended to eradicate prostitution. In , prostitution became illegal. The law had little effect on the extent of prostitution, and on January 1, , this law was partially repealed, making not sex work itself but merely its exploitation and facilitation illegal. Prosecution was still possible under offences against public decency and morals, but this was infrequent, although regulation was in the hands of local authorities and enforcement was variable.
Thus, this could be considered as an example of 'toleration'. Male prostitution has never been recognized. Further amendments occurred in and ; the Code was most recently amended in ,  specifically to deal with increasing concerns around child prostitution and human trafficking. According to a Portuguese Government spokesperson, "The Government's opinion was that prostitution was not a crime. Neither were the prostitutes' clients considered to be criminals, but those who exploited prostitutes and gained profits from their activities were considered criminals under the law.
There are areas in which outdoor sex workers cannot work, and restrictions on where they may work indoors. For instance, one cannot rent an apartment to a sex worker; the law technically only applies to third parties, not workers or clients, addressing pimping, procuring and facilitating.