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Take your company to Portugal: A Comprehensive Guide

Updated: June 25, 2024
By: David Afonso

A frequent question for any foreign entrepreneur is: how can I take my company to Portugal? The decision to expand your business to Portugal can be a game-changer, as it has been for many successful companies and entrepreneurs. The country’s economic stability and the potential for market entry are compelling reasons. And let’s not forget the allure of living in a country that offers the exceptional quality of life found in Portugal. This guide covers all the steps needed to open a branch of a company in Portugal, from choosing whether to set up a subsidiary or branch to visa requirements for foreign workers.

Frederik Pohl
Frederik Pohl, CEO
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Open a Branch or a subsidiary in Portugal: what are the differences?

The decision to open a subsidiary or a branch in any given market arises in a context of business development, in which companies define a strategy for entering a market or several at the same time. There are, however, differences between the two options.

Branch

Branches have their own legal personality and are distinct from the companies that participate in them. Opening a branch in a foreign market means opening a new company that belongs to and depends on the parent company, with its own management team and employees. The majority of the capital is held by the parent company, which directly exerts a dominant influence and can appoint more than half of the members of the management body. In legal and tax terms, and given that the branches headquarters are based abroad, it is obliged to comply with the same rules as local companies.

Types of Branches
Commercial

A commercial branch, with its focus on sales, promotion, and after-sales services, presents a promising avenue for growth. This option, at times, involves the temporary relocation of staff from the original company, who will implement the necessary knowledge and procedures for representation and marketing in the new market, thereby opening up new horizons for your business.

Industrial

The industrial branch has production capacity, i.e., it manufactures the products it is going to sell instead of importing them from the parent company. Sometimes, this option makes it possible to benefit from incentives the country of destination grants to increase production capacity, create jobs, or attract foreign investment.

Knowledge capture

In a knowledge-gathering branch, the aim is to accompany and strengthen the processes of innovation and technological development abroad. This option is especially useful in more technologically developed markets or when the company wants to stand out for its innovation, offering your business a unique edge in the market.

What’s a Subsidiary?

A Subsidiary does not have its own legal personality. It functions as an extension of the entity it represents and carries out all or part of the same activity. It has the same objective and corporate name as the parent company, and is economically dependent on the parent company. Despite this relationship, the subsidiary must comply with the legal and tax obligations of the country of destination, but its operations are integrated into the accounts of the company they represent.

take your company to portugal

Employee Relocation to Portugal: what to look out for

A worker’s relocation entails considerably more than merely transferring them from one location to another. There are numerous expenses involved, and the process becomes considerably more time-consuming and intricate when an employee is relocated on a global scale. Apart from that, there are two points that are needed to be well analyzed: Visas and Housing Assistance.

Portuguese Visas for Employees (Non-EU/EEA citizens)

D1 Visa

The D1 Visa, which pertains to residence for subordinate professional activity, requires the employer to furnish employees with an invitation letter, employ them for a minimum duration of one year or longer, and pay them monthly at least equivalent to the national minimum wage in Portugal. 

Digital Nomad Visa

In order to qualify for the Digital Nomad Visa, the contracting company must have its headquarters outside of Portugal, have employed the individual for a minimum of one year, and have declared its intention to permit remote work.

Visa D2

The D2 Visa, which pertains to independent professional activity, requires the contracting company to enter into a contractual agreement with the service provider for the provision of liberal profession services. Additionally, a declaration from the competent authority attesting to the contracting company’s eligibility to conduct the activity in Portugal is required, if applicable.

Visa D3

The D3 visa serves as the residence permit for individuals engaged in activities that are exceptionally qualified, require specialized technical expertise, are of an exceptional nature, or require an appropriate qualification for the specific task at hand.

Finding accommodation for your employees 

Finding suitable housing for employees can be a crucial aspect of moving your company to Portugal. That’s why Pearls of Portugal is here for you! When you work with us, we take care of the entire process, including:

  • Property search and selection: We find houses or apartments that meet the needs of your employees, taking into account factors such as location, size, budget, and type of property.
  • Rent negotiation: We negotiate the rent with landlords on behalf of the company, guaranteeing the best conditions for your employees.
  • Relocation service: So, you can worry less about the whole process. Depending on what you need and want, extra services can also be included in your package.
Costs Associated with taking your company to Portugal

It is also crucial to understand the costs involved in bringing a business to Portugal, as well as some additional information on salaries and renting office space.

Cost of Company Registration in Portugal

The cost of registering a company in Portugal can vary depending on the type of legal structure chosen and other factors. In general, costs include registration fees, legal fees and administrative expenses. For a branch:

Online service

In-person service

220€ – in the case of setting up a company with a pre-approved model memorandum of association.

360€ – if you are setting up a company with articles of association drawn up by the shareholders.

If your company has a trademark associated with a class of products or services, 100€ will be added to this amount. Each additional class costs 44€.

360€

If you have movable or immovable property, you will have to pay extra:

  • 50€ per property;
  • 30€ for each item of movable property;
  • 20€ per moped or motorcycle (with a cylinder capacity of less than 50 cm3).

Subsidiary

Type of Request

Online service

In-person service

Normal Request

170,00 €

200,00 €

Urgent

370,00 €

400,00 €

Average salaries in Portugal

  • Minimum Wage: Since January 1, 2024, the minimum wage has risen to 820 € on the mainland. In Madeira, the figure has been updated to 850€ and in the Azores, to 861€.
  • Medium Wage: In 2022, the average monthly salary of employees in Portugal (including overtime, vacation, and Christmas bonuses) was 1,368€.
  • Senior Technician Salary: On average, a senior technician’s salary in Portugal can range from 1,400€ to 3,500€ per month. This title is mostly common in government jobs and big companies.

Renting an office in Portugal

Office space rental prices in Portugal can vary significantly depending on the location, size and quality of the space. The prices of office space for rent in Portugal went from an average of 7,8 € per square meter in 2019 to 9,8 €/m2 in 2023. In Lisbon, for example, the average price per square meter can range from 15€ to 25€ per month, while in Porto, it can range from 10€ to 20€ per month.

Where to Rent an Office Space

This depends on what field your company is in. If it’s manufacturing, then you should look for a a ‘fábrica’ in a ‘zona industrial‘ (industrial area). There are many in Portugal and, lucky for you, they are far from city centres, so overall rent (both for the space and your employees) should be cheaper. If you are simply looking for an office space, there are many, many business buildings and store spaces everywhere! When you work with Pearls of Portugal, we will find you a space that meets all your criteria.

open a branch of a company in portugal
There are a lot of industrial areas in Portugal

Required documentation for opening a branch of a company in Portugal

The specific documentation required for taking a company to Portugal will vary depending on the chosen business structure and the nationality of the company’s owners. But this is generally what you will need:

  • The registered address, the name of the company, and the type of business conducted;
  • A copy of the meeting minutes from which the decision to open a branch was made;
  • The name and address of the branch;
    the representative and person designated to register the branch;
  • The activities that will be conducted by the branch.
Information required for the registration of a subsidiary in Portugal

If you already have a company based abroad and want to open a subsidiary in Portugal, you can do so directly or through a representative. The process can be done at the Institute of Registries and Notaries office, through the “Criar Sucursal” service. The documents you will need to submit are as follows:

  • Document proving that the person making the application has the power to set up the branch.
  • Corporate resolutions approving the creation of the subsidiary, the appointment of its representative, its purpose, name, address, capital employed and the closing date of the financial year.
  • Document proving the legal existence of the entity wishing to set up the branch (commercial register), if it is not a company with its registered office in a Member State of the EU.
  • Memorandum and articles of association of the entity wishing to set up the branch
    declaration of effective control.

Important: Everything listed above must be in Portuguese or accompanied by an official translation into Portuguese. In addition, the company is obligated to obtain registrations from the Labor Inspectorate, the Social Security Regional Center, and a private insurer for workers’ accident compensation insurance.

How taxes work for foreign companies 

Corporate Income Tax (IRC) is the main tax on income resulting from the exercise of entrepreneurial activity. You will come across many rules for calculating IRC; that’s why hiring a good accountant is important – you MUST make sure all your taxes are in order, otherwise you might face repercussions. Inspections are often made, especially in bigger companies. Although taxes can be a complicated issue, here are some important concepts and terms to remember:

  • The Standard Tax Rate is 21% on the mainland and 16.8% in the Azores, and 20% Madeira.
  • Social Security (TSU) represents 34.76% of employees’ gross salary – employers  pay 23.75% and employees deduct the remaining 11% from their salary.
  • Taxable Profit – Income obtained from the company’s activity minus the expenses incurred.
  • Taxable Value – The amount of taxable profit minus tax benefits and tax losses that can be deducted.
  • Derrama Municipal – Municipal revenue levied on the company’s taxable profit.
  • Autonomous Taxation – Tax payable on certain company costs, e.g. fuel, subsidies, representation expenses, etc.

FAQ – Frequently Asked Questions

Yes. Any citizen who meets the legal requirements may start a business in Portugal. The subsequent process is relatively simple (with help!).

Foreign companies are subject to IRC, VAT and IMI. Rates and regulations can vary, so it is advisable to get expert tax advice.

The government offers various support programs for foreign companies, including financial incentives, tax breaks, and assistance with finding partners in their market.

In 2023, the average monthly salary in Portugal was 1.505€ (before taxes). The minimum wage is 820€ (2024).

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