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Starting a Business In Portugal

Starting a Business In Portugal

Business Opportunities in Portugal

For many foreign corporations, starting a business in Portugal represents a gateway into Europe. Portugal’s abundant heritage, diverse culture, and breathtaking scenery make it a popular destination for millions of tourists yearly, creating openings for transportation, entertainment, and hospitality companies.

The country boasts a thriving technology industry with a highly skilled workforce and favorable government policies, providing prospects for foreign firms in software development, fintech, and artificial intelligence. Furthermore, Portugal has a robust renewable energy sector with significant solar and wind power investments, creating opportunities for foreign businesses in energy infrastructure, engineering, and project management.

Portugal’s gross domestic product (GDP) is expected to rise steadily from 2022 to 2027 by 6,574.1 U.S. dollars (+26.39%). In 2027, the GDP per capita is predicted to be $31.484.47. This is a positive sign for businesses wishing to start a business in Portugal. Moreover, an additional advantage overseas companies might find while doing business in Portugal is tax rebates. The country offers a young, educated workforce and an easy route into the European Union (EU). Read more about such incentives below.

You will learn how to start a business in Portugal and register a company in Portugal from this post.

Benefits of Starting a Business in Portugal

Thanks to its supportive regulatory framework and thriving digital culture, Portugal is a hotbed for corporate expansion. As more prospective business ideas enter the nation, local authorities attempt to ensure fair chances for domestic and foreign participants.

Portugal continuously seeks to improve its reputation and economic appeal domestically and in its contacts with foreign nations or people who live abroad to achieve this goal. Some advantages of establishing a business in Portugal include the following:

  • Portugal’s location provides easy access to the European, African, and South American markets. Portugal also has good infrastructure and a developed transportation system. In addition, the country has a welcoming business environment, with low corporate tax rates and several tax incentives. There is also a simplified business starting process, which can be done online.
  • Portugal is one of the very few countries in Europe where you can be sure to obtain the greatest value for money alternatives for your company, from skilled labor to prime office spaces. The labor force is substantially more educated, skilled, and affordable than in most western European nations.
  • The 2008 economic downturn has increased the importance of tax incentives for investment in the nation. The primary goal of many incentives is to promote investment, particularly foreign investment, which supports sustainable growth, job creation, and firm investment. Portugal has concentrated on establishing specific reporting periods for tax losses, increasing legislative measures to prevent overseas double taxation, and establishing favorable nominal rates to achieve this.

Requirements for Starting a Business in Portugal

To establish a business in Portugal, companies need to fulfill the following requirements:

Individual Tax Identification Number

Portugal uses the NIF (Number de Identificaço Fiscal), commonly known as an Individual Tax Identification Number. It is a nine-digit number assigned uniquely to each individual by Portuguese tax officials. Any resident of Portugal who does official or legal fiscal operations must have a NIF tax identification number (i.e., opening a bank account or buying real estate property in Portugal). Residents, non-residents, and Portuguese nationals must obtain a NIF number in that situation.

Share capital

For businesses with a single quota holder, the minimum amount of capital is EUR1, EUR2 for businesses with two quota holders, and so on. The principal amount of the quotas must be at least EUR1.


The company’s accountant must electronically submit the company’s yearly accounts declaration using a specialized Tax Authority site (IES). The deadline for submitting an IES declaration is on the 15th day of the seventh month following the conclusion of the fiscal year.


Whether or not they are shareholders, directors must be natural people with full legal power. There are no legal restrictions on nationality or place of residence. Provided they have a Portuguese taxpayer identity number, directors may be foreign nationals with permanent residence abroad. Directors who do not reside in the EU must have a tax representative based in Portugal with a Portuguese taxpayer identity number.

Types of Business Structures in Portugal

One of the first stages in setting up a business in Portugal is deciding what kind of enterprise you’ll operate. The company structures commonly used by foreign enterprises to set up a business in Portugal are:

Limited liability company

  1. Among the two most popular alternative investments used in Portugal to form company and commercial transactions is the LLC (also known as a “Sociedade Anónima” or “S.A.”).
  2. It guarantees that shareholders’ liability is restricted to the extent of their share capital involvement in the company and defines this participation and involvement as negotiable securities.
  3. A LLC must typically be formed by at least five founding shareholders, individuals, or businesses.
  4. If another corporation has subscribed for and holds all outstanding capital bases since formation, an exception exists, and only one originating shareholder is needed.
  5. Additionally, only two founding shareholders are needed when the State or a State investment firm holds more than 50% of the invested capital.

Private limited liability company (LTD)

  1. Portugal has long employed the LTD (“Sociedade por Quotas” or “Lda.”) as an investment scheme for small businesses, most of which are familial.
  2. The firm’s entire quota capital is subject to the shareholders’ joint and several liabilities, but their liability is limited to that amount.
  3. Since fixed capital is subdivided into quotas, this corporate structure does not permit participation and involvement to be expressed by shares. It is, therefore, not eligible for listing on the Lisbon Stock Exchange.
  4. Whether corporations or individuals, only two partners are required to form a private limited liability company.
  5. There is no minimum quota capital requirement to create an LTD firm.

Branch or representative office

  1. Unless it is functioning under the flexibility of provision of services, a foreign corporation wanting to conduct business operations in Portugal for longer than a year may establish a subsidiary (or affiliate) there.
  2. The subsidiary must be one of the business entities mentioned above and will have its own corporate identity and unique legal status.
  3. Any foreign company that wants to conduct business in Portugal can also open a branch office (sucursal) or another type of permanent representation (representaço permanente) to meet the necessary registration criteria.

Company Registration Process

Following are the steps of company registration in Portugal:

Register the company name at the National Registry of Collective Entities

  1. To guarantee that a newly established company’s name is not already taken on the register, apply and block the company name with RNPC.
  2. If the name is available, companies must pay expected fees to reserve it for 48 hours.
  3. Another choice is to choose from the database’s pre-approved names list maintained by RNPCs.
  4. The name approval certificate is delivered to the company after the name has been properly processed.

Open a corporate bank account

  1. The founders shall deposit the required minimum share capital for every member into a bank account.

Getting the Registration Certificate

  1. The company founders should apply for a Portuguese Tax identification number from the National Registry of Collective Entities.
  2. Submit the following documents – an updated copy of the registration in the Commercial Registry and the records of the initial meeting of incorporation.
  3. Once the paperwork has been turned in, the “On-the-Spot” company may help with the process and offer a sample memorandum and articles of association.

Enrollment of employees

  1. The entity must enroll all employees at the Centros de Formalidades das Empresas (CFE) or the Business Registry Offices by ten days after the official announcement of the business’s launch.
  2. Within 24 hours of the employment agreement’s effective date, the employer must register the workers with the local Portuguese Social Security agencies. A fine of between €75 and €4,800 will be assessed if the employment registration requirements are not followed.

Notifying the Labor Inspectorate

  1. The employer is required to give the Labor Inspection Office (Inspecção-Geral do Trabalho) the firm name, tax identification number, a copy of the declaration of the company’s incorporation, a statement of the business’s activities, and the address of its headquarters. This can be sent to the One Stop Shop, which will execute it on the company’s behalf.

Insurance Registration

  1. The final step is for all staff and supervisors who get a regular wage to sign up with a private insurer for employee accident compensation insurance.
  2. The insurance can be obtained after the company has started operations and is covered by a private insurer.

How Much Does it Cost to Incorporate a Company in Portugal?

The incorporation fee in the first year is €5,950, while yearly company costs in the second and subsequent years are €600. The typical charge for a Portugal engagement is €15,200, which covers all administrative fees, company incorporation, opening a native corporate bank account, and other expenses. The cost of incorporating a company in Portugal is as follows:

Entity TypesCost
Representative office€13,450

Are Foreigners on Certain Passes Allowed to Start a Business in Portugal?

  • Establishing a business in Portugal is quite an easy process. A NIF, social security number, and registration certificate are required from EU citizens. However, foreign nationals must first file for a Portuguese visa when establishing a business in Portugal.
  • The D2 visa is the most popular choice for business people.
  • You can also file for a StartUP Visa as an equivalent. You will be a member of a start-up ecosystem with this visa. It’s perfect for investors just starting as entrepreneurs and needing time to get used to the marketplace.
  • Finally, there is the Golden Visa, but you must invest a minimum of €250,000 in qualifying for the same.

Government Assistance for Foreign-owned Businesses

Starting a business in Portugal benefits international investors due to the various government incentives. Here are some of them:

  • The Portuguese government has a generally favorable view of foreign direct investment and acknowledges the value of foreign investment as an engine of economic progress. The same rules govern international and domestic entrepreneurs under Portuguese law because it is founded on the non-discrimination concept. Except for a few limited activities, foreign direct investment is not entitled to any specific registration or notice to any government.
  • The government has developed the “Cutting Red Tape” website Simplex (, which lists steps taken since 2005 to minimize bureaucracy.
  • The Empresa na Hora (“Business in an Hour”) program by the Portuguese government makes it easier for residents and non-residents to incorporate a firm in less than an hour.
  • The government founded AICEP in 2007, a promotion organization for international business and investment that oversees industrial zones and offers investors company location options through its affiliate AICEP Global Parques.
  • Portugal’s “Golden Visa” program, established in 2012, grants fast-track permanent resident status to international investors who meet specific requirements. These include transferring capital, creating jobs, or purchasing real estate.
  • Through organizations like the Confederation of Portuguese Business (CIP), the Portuguese Chamber of Commerce and Industry (CCIP), and the Portuguese Commerce and Services Confederation (CCP), the Portuguese government keeps in regular communication with investors.

How Multiplier Can Help

Starting a business in Portugal requires compliance with specified laws, registration procedures, and tax regulations. International PEO service providers, such as Multiplier, can assist here. Our team of experts supports your payroll operations. When you delegate payroll services to experts, you can focus more on expanding your company’s market reach. We also assist with the administration and payment of freelancers working all over the world.

Frequently Asked Questions

Foreign shareholders and company members are not subject to any restrictions, but they are required to have a Portuguese taxpayer identity number.

Foreign nationals can own and live in real estate without limitations. From a Portuguese legal standpoint, there are generally no limitations on foreign guarantees for real estate ownership or possession.

No, Portugal has no restrictions on which nationalities may register businesses.

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