Business registration in Portugal: A step-by-step guide

Thrive in Portugal’s business-friendly climate.

Portugal isn’t just known for its rich culture and coastal charm—it’s fast becoming a magnet for entrepreneurs and global businesses. It’s strategic access to European markets, favorable tax regime, government-backed incentives, dynamic startup ecosystem, tech-savvy, multilingual workforce, and rapidly evolving digital economy make it a rising business hub.

While the advantages are clear, navigating the local landscape requires careful attention to employment laws, taxation, and regulatory compliance.

This guide examines the steps, costs, and benefits of establishing a business in Portugal. It also explores alternative approaches, such as partnering with an Employer of Record (EOR), for a simpler and more efficient market entry.

The business incentives of registering your company in Portugal

Whether you’re a startup, SME, or multinational corporation, establishing a company in Portugal offers incredible growth opportunities.

Here’s why:

1. Access to the EU market: Companies benefit from free trade agreements, standardized regulations, and a stable economic climate for cross-border expansion. 
2. Incentive programs: The Portuguese government offers various corporate tax incentives for foreign investors, startups, and R&D-intensive businesses. Special tax regimes, such as the Non-Habitual Resident (NHR) program, also provide attractive tax benefits for entrepreneurs and skilled professionals.
3. Business cost savings: Portugal boasts affordable wages, lower operational expenses, and cost-effective office rentals compared to other Western European nations.
4. Skilled talent pool: A thriving startup ecosystem and a highly educated workforce make Portugal attractive for technology, finance, and renewable energy.
5. Pro-business ecosystem: Portugal offers services like Empresa na Hora that enable you to register a company within days. This online approach reduces bureaucratic hurdles.

However, adhering to labor laws, tax withholding, and benefits administration can be time-consuming and costly. Instead, you can partner with an Employer of Record (EOR).

An EOR simplifies how you manage compliance, payroll, and hiring in Portugal, so your business can legally employ teams here without setting up a legal entity.

Standard company registration vs. an EOR in Portugal

Aspect	Standard registration	EOR solution	E-residency
Purpose	Establish a legal entity for full-scale operations in Portugal.	Hire employees in Portugal without creating a legal entity.	Manage a business remotely with digital tools.
Control	Full control over operations, hiring, and business decisions.	Limited control—EOR manages HR, payroll, and compliance.	Operate as a digital business with some legal limitations.
Cost	Higher setup and operational costs, including taxes, office space, and legal fees	Lower cost—no entity setup, but EOR service fees apply.	Minimal cost, but limited to digital operations.
Compliance	Must comply with Portuguese corporate laws, tax regulations, and employment laws.	EOR handles compliance, payroll taxes, and employee contracts.	Must follow the regulations of the e-residency framework.
Setup time	Weeks to months, depending on legal and regulatory approvals.	A few days to start hiring employees.	Quick registration, but limited operational scope.
Accessibility	Suitable for long-term expansion and local business growth.	Ideal for testing the market or short-term hiring needs.	Best for remote entrepreneurs managing online businesses.

After understanding key differences between traditional registration, EOR solutions, and e-residency, which best aligns with your goals?

If your priority is speed, compliance, and flexibility, an EOR may be the smarter route. Next, we’ll explore why this model works especially well in Portugal.

Portugal business registration: Why EOR is a better choice

Think of EOR as your all-in-one solution for navigating Portugal’s employment landscape. It can legally hire and manage employee payroll on your behalf. It manages contracts, benefits, taxes, and filings—so you lower your legal exposure and scale faster, with fewer overheads.

Key benefits of partnering with an EOR in Portugal

Quick market entry: Start hiring in Portugal immediately without company registration.

Payroll and tax management: The EOR handles all employee pay, taxes, and benefits, as per Portugal’s laws.

Compliance and local expertise: The EOR complies with all labor and tax laws, so you can operate without legal disruptions.

Cost efficiency: It eliminates the costs of registering a local entity and reduces administrative overheads and consultation fees.

Scalability and flexibility: You can scale up, downsize, or exit the market effortlessly.

While partnering with an EOR offers a streamlined and low-risk entry into the Portuguese market, some businesses may prefer the control and permanence of setting up a legal entity.

However, if you’re planning a long-term presence or need full operational autonomy, you must understand the company registration process.

Register your business in Portugal: A clear-cut process.

Knowing the steps involved in company registration is crucial, whether you opt for an EOR or decide to handle registration yourself.

Step 1: Select a business structure

Before registering, select the legal entity that suits your business needs.

The most common options include:

• Sole proprietorship (Empresário em Nome Individual): Ideal for freelancers and small businesses.
• Private limited company (Sociedade por Quotas – LDA): The most common structure, requiring at least one shareholder and a minimum capital of €1.
• Public limited company (Sociedade Anónima – SA): Suitable for larger businesses, requiring at least five shareholders and a minimum share capital of €50,000.
• Branch office (Sucursal): A foreign company’s extension operating in Portugal, without a separate legal entity.

Step 2: Apply for a Portuguese tax identification number (NIF)

All business owners, including foreign investors, must obtain a Número de Identificação Fiscal (NIF) from the Portuguese Tax Authority. This is essential for legal and financial transactions.

Step 3: Register your business name

Check for business name availability and reserve your preferred company name through the Instituto dos Registos e do Notariado (IRN). You can also choose a pre-approved name from Empresa na Hora, a government portal for expedited company registration.

Step 4: Write your articles of incorporation

Prepare the company’s Articles of Association (Contrato de Sociedade), outlining the business structure, ownership details, and operational guidelines. This document must be notarized.

Step 5: File a registration form with the Commercial Registry Office (RNPC)

Submit your application to the Registo Nacional de Pessoas Colectivas (RNPC) to obtain a commercial registration certificate. This step legalizes your company’s existence in Portugal.

Step 6: Open a business bank account

You require a business bank account for financial transactions. Some of the most commonly used banks in Portugal for businesses include:

• Millennium BCP
• Novo Banco
• Caixa Geral de Depósitos
• Revolut Business (for digital banking solutions)

Step 7: Submit your tax & social security forms

Your company must register with:

• Portuguese Tax Authority (Autoridade Tributária e Aduaneira) for VAT and corporate tax compliance.
• Social Security (Segurança Social) for employee benefits and pension contributions.

Step 8: Get the required business licenses and permits

Depending on your industry, you may require additional permits or sector-specific licenses. Check with the Portuguese Business Gateway (Portal do Cidadão).

As you can see, setting up a company in Portugal involves multiple legal, financial, and administrative steps. While this process gives you full control, it also means ongoing compliance responsibilities that involve administrative effort and consulting expenses.

An Employer of Record (EOR) can be faster, less risky, and more cost-effective for businesses seeking quick market entry,

Let’s examine the costs associated with both approaches.

The real cost of registering a business in Portugal

The registration process itself is straightforward, but understanding the financial implications is important.

Here is a breakdown.

1. Registration costs

• Company registration fee: Approximately 360 euro- 1000 euro, depending on the type of business structure and registration method. ​The most accurate up-to-date cost can be found on the IRN website or the Portal da Empresa website.
• Name approval certificate (Certificado de Admissibilidade): The cost of this certificate also varies. For updated figures, check the Portal da Empresa website.

2. State fees and share capital

• Minimum share: For a private limited company (LDA), the minimum share capital is €1 per shareholder. ​
• Public deed fee: Fees for notarizing the public deed can vary.​

3. Legal services and notary fees

• Legal assistance: The Cost of engaging legal professionals for business registration in Portugal varies depending on the complexity. ​
• Notary fees: Fees for notarizing documents may vary based on the services required.​

4. Annual maintenance

• Accounting: Monthly fees for certified accounting services start from €150 plus VAT. 
• Virtual office: Virtual office packages are available at around €50 per month. ​

5. Taxes

• CTR: Standard corporate tax rate in Portugal is 21%, with additional municipal and state surtaxes that may apply depending on taxable income levels.
• VAT: ​The standard VAT rate is 23%, with reduced rates (13% and 6%) for certain categories of goods and services.

6. Employer social security contributions

• Social security: Employers must contribute 23.75% of an employee’s gross salary towards social security, in addition to the employee’s own contributions.

While standard registration and compliance involve many variables and often unpredictable costs, an EOR is more predictable and cost-effective for businesses. An EOR like Multiplier covers employee administration, compliance, and payroll with a single predictable fee.

Standard registration or EOR: Cost comparison

Here is a cost-benefit comparison between traditional company registration and the Employer of Record (EOR) model to determine the best approach for your business.

Cost category Company registration (USD)	EOR (USD)
Setup fees	$360–$1,000 (registration + name approval + basic admin)	NA (no entity setup required)
Legal documentation	$200–$600 (notary, lawyer, and document fees)	Not required for setup, labor law compliance or payroll. The EOR handles all this.
Minimum capital requirement	No fixed minimum, but suggested capital for LDA is ~$5,000+	Not required since you are not registering
Payroll & compliance	Corporate tax: 21%, VAT: 23%, Employer social security: 26.5%, Accounting (~$160/month)	The EOR handles social security and payroll within monthly fees.
Office space & utilities	Optional virtual office (~$55/month) or physical office (varies)	Not necessary
Ongoing maintenance	Annual reporting and tax filing obligations	Included
Time investment	2–4 weeks minimum (can be longer with physical office setup)	1–5 business days

Note: The costs above are indicative and may vary based on your business needs. Talk to our experts at Multiplier for an estimate tailored to your business vertical and expansion plans.

Unlock your Portugal growth with Multiplier

A trusted EOR like Multiplier can act as your legal employer in Portugal. It has helped companies like yours quickly hire teams to serve their global clients in Portugal—and beyond—handling everything from hassle-free hiring and compliant payroll to navigating local labor laws.

Here’s how:

• Local hiring expertise: Drafts compliant contracts and simplifies onboarding while handling all Portuguese labor law requirements.
• Payroll made simple: Ensures accurate and transparent payroll fully compliant with local regulations.
• Integrated HR: Centralizes everything—onboarding, real-time expense tracking, the works—into one easy dashboard. You get a clear overview and your team gets a seamless experience.
• Compliance assurance: Keeps your business fully compliant with Portuguese labor laws and tax regulations, protecting you from costly penalties.
• Attractive benefits packages: Provides competitive, locally tailored benefits to help you attract and retain top Portuguese talent while significantly reducing compliance risks associated with hiring in Portugal. 
• Reliable support: Provides expert assistance that handles the heavy lifting so you can make informed decisions

Are you curious to see how effortless Portugal’s expansion can be? Book a demo and let’s unlock your growth potential together.