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Business Setup and Support in Portugal Company Registration in Portugal

Taras Miroshnychenko

Head of International Corporate Law and Fintech Practice

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miroshnychenko@prikhodko.com.ua

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Expert in fintech, crypto, and international corporate law with over 20 years of experience. Specializes in crypto licensing (VASP/CASP), iGaming business support, and international structuring, asset protection, and OSINT analytics for risk assessment and due diligence.

Company Registration in Portugal

Opening a business in Portugal is a promising step for entrepreneurs who want to expand their activities in the European market.

The country offers favorable conditions for doing business, a stable economy, tax benefits and access to EU markets.

In this article, we will talk about the key aspects of registering a company in Portugal, types of companies, tax obligations and other important nuances.

Why is it worth opening a business in Portugal?

Portugal is an attractive jurisdiction for business for a number of reasons:

Simplified taxation system – preferential rates apply to startups and small businesses.
Access to the European market – EU membership allows for trade without customs barriers.
Related bonuses for foreigners – are obtaining a residence permit through investment or opening a business (under certain conditions).
Stability and loyalty to business – the government supports entrepreneurs, including through financing programs.

Choosing the legal form of the company

Before registering a business in Portugal, you need to decide on its form.

The most common options are:

Individual entrepreneur (Empresário em Nome Individual)

Suitable for a small business with one owner.

Advantages: simple registration, minimal costs.

Disadvantages: full liability of the owner for debts.

Limited Liability Company (Sociedade por Quotas, Lda.)

The most popular form for small and medium-sized businesses.

Minimum capital: €1 (from 2023).

Number of founders: from 1 to 5.

Liability: limited to the share in the capital.

Joint Stock Company (Sociedade Anónima, SA)

Suitable for large businesses and public companies.

Minimum capital: €50,000.

Management: mandatory appointment of a board of directors.

Branch of a foreign company (Sucursal)

If you already have a business outside of Portugal, you can open a branch.

Steps to register a business in Portugal

Choosing a company form and name

The name must be unique and relevant to the company’s activities. You can check availability through the Instituto dos Registos e Notariado (IRN).

Preparation of documents

For Lda./SA:

Company Articles of Association (Contrato Social).

Proof of payment of capital (for SA – bank confirmation).

Passports and NIF (tax number) of the founders.

For individuals:

Documents confirming identity and address.

Registration in the Commercial Register (Registo Comercial)

Submission of documents is done through Empresa na Hora (quick registration) or online through Portal da Empresa.

Obtaining a tax number (NIF) and registering with the tax office

All companies must have a NIF. For foreigners, you can obtain one through a representative.

Opening a bank account

Portuguese banks require personal presence to open a company account.

Registration in the social insurance system

Employing employees requires registration with Segurança Social.

Additional requirements for business registration in Portugal

In addition to the standard stages, foreign entrepreneurs should consider a number of additional nuances:

Requirements for directors and shareholders

For Lda. (Limited Liability Company), the director can be either a resident or a non-resident of Portugal.
For an SA (Agency), a resident director or representative in Portugal is required.
Shareholders can be foreigners without restrictions.

Apostille and translation of documents

If the founders are foreigners, their documents (passports, certificates of no criminal record) must be:

Legalized through an apostille.
Translated by an official translator in Portugal.

Office lease agreement or legal address

The company must have a legal address in Portugal. If the office is rented, a contract (Contracto de Arrendamento) is required. An alternative is to use virtual addresses (services of Portuguese registration agencies).

Specifics for individual types of activities

Some areas require additional licenses:

Financial services – authorization from the Bank of Portugal.
Tourism and hospitality business – Turismo de Portugal license.
Medicine and pharmaceuticals – INFARMED approval.

Tax reporting and accounting

Main tax obligations

Income Tax (IRC): filed annually (by May 31 of the following year).
VAT (IVA):

Quarterly declarations (if turnover < €650,000/year).

Monthly declarations (if turnover is higher).

Social contributions: paid for employees monthly.

Audit for large companies

SAs are required to conduct an annual audit.
– only if 2 out of 3 criteria are exceeded:
Assets > €1.5 million.
Turnover > €3 million.
50 employees.

Support programs for startups and investors

Startup visa (Visa para Empreendedores)

For innovative projects with investments of €50,000 or more. Conditions:

A business plan with scalability potential.
Confirmation of financing.

Benefits for IT companies

Reduced taxation (5–10% for IT specialists under the Non-Habitual Resident program).
Software development grants through Portugal 2020.

Regional benefits

Reduction of income tax to 12.5% in some areas (e.g. Azores).
State subsidies for businesses in rural areas.

It will also be useful: OPENING A BANK ACCOUNT IN PORTUGAL

Business closure: how does it happen?

If a company ceases operations, it is necessary to:

Pay all taxes and debts.
Submit an application for liquidation to the commercial register.
Dismiss employees with compensation.
Publish a notice of liquidation in the official newspaper, Diário da República.

It is also possible to liquidate a company by buying and selling corporate rights.

Taxes for businesses in Portugal

Income tax (IRC): 21% (exemptions may apply for small businesses).
VAT (IVA): standard rate – 23%, reduced rates – 6% and 13%.
Dividend tax: 28% (or less under double taxation agreements).

Is it possible to obtain a residence permit through a business in Portugal?

Yes, foreigners can apply for a residence permit for entrepreneurs (D2 Visa) if:

They will open a company and invest from €50,000.
They will create jobs for Portuguese people.
They will confirm the stability of the business.

Conclusion

Registering a business in Portugal is a great opportunity to enter the European market with minimal barriers. However, the process has its own nuances related to the choice of company form, taxes and legal requirements.