REGISTRATION OF A BUSINESS (FIRM) IN PORTUGAL

REGISTRATION OF A BUSINESS (FIRM) IN PORTUGAL

Advantages of registering a company in Portugal

A Portuguese limited liability company can be registered within 1 week with 1 director and 1 shareholder who can be of any nationality. The required minimum paid-up share capital is only €1 and our clients do not need to travel to complete the work;

Registering a business in Portugal is easy and economical because:

Resident companies benefit from the cost of renting office space, which is:

• 11 euros per square meter. in Lisbon ;
• 6 euros per sq.m. in Porto, which is one of the lowest in Western Europe;

The World Bank considers Portugal the fifth best European country in terms of ease of business registration; thousand

Registering an LLC in Portugal takes no more than 1 week, the fastest pace in Europe.

The Portuguese government offers fiscal incentives for entrepreneurs who register a company in Portugal, including:

• Companies with an annual turnover of less than €50 million enjoy a reduced corporate tax rate of 17% for profits up to €15,000;
• Resident companies can carry forward their business losses for up to 12 years, allowing them to claim further tax credits of up to 70% of their annual taxable income;
• Innovative resident companies benefit from a corporate tax credit of up to 50% of eligible R&D expenditure if this expenditure exceeds their 36-month average, or 32.5% otherwise. This tax benefit can be carried forward for 8 years and be up to 1.8 million euros.
• All companies registered at the Madeira International Business Center (MIBC) in Portugal after January 2015 will receive a number of incentives that will apply until December 2027, including:
• Full exemption from paying stamp duties; withheld taxes; dividends, interest
• Reduced corporate income tax of 5% for all companies;
• Benefit from Portugal’s opt-out rules

Disadvantages of registering a company in Portugal

Companies pay high taxes in Portugal, including:

Standard tax rates: corporate tax – 21% and an additional fee of up to 1.5% levied by municipalities VAT – 23% and social insurance contributions – 24.75%. Therefore, the taxes paid by the enterprises make up more than 43% of their profits, which is more than the already high average indicator for the EU (42%);

• Portugal punishes successful businesses as the corporate tax rate increases by 7% when revenues exceed €1.5 million;
• Exiting the Portuguese market is expensive. A company that transfers its tax residency abroad must pay a burdensome exit tax, as the transferred assets are considered unrealized capital gains and therefore subject to corporation tax.

What is the cost of registering a company in Portugal?

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