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How to Start a Company in Portugal

Portugal has become an attractive destination for foreign entrepreneurs due to its business landscape, strategic location in Europe, and policies to support new businesses. Nevertheless, to start a company in Portugal, it is necessary to have planning, resilience, patience, and organization. In this guide, we detailed some of the points needed to help in this process and how Pearls of Portugal can be an ally to speed it up.

Frederik Pohl
Frederik Pohl, CEO
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The Portuguese business landscape: is it favorable?

According to data from the National Institute of Statistics (INE), in 2021 alone there were 9706 subsidiaries of foreign companies in Portugal. The relative ease of setting up a company and the tax incentives to create a business contribute to the growing interest of entrepreneurs in Portugal. In addition, there are some factors that contribute to this success:

  • Growing Economy: The Portuguese economy has been growing steadily in recent years, offering a favorable environment for new investments.
  • Affordable Cost of Living: The cost of living in Portugal is relatively low compared to other Western European countries, which makes the country attractive to companies and professionals.
  • Skilled Workforce: Portugal has a skilled and well-trained workforce, ready to meet the needs of companies.
  • Strategic Location: Portugal is located in a strategic position in Europe, facilitating access to international markets.
  • Government Incentives: The Portuguese government offers various tax incentives and other benefits for companies setting up in the country.

What kind of company is it advisable to start in Portugal?

The ideal type of company to open in Portugal will depend on several factors, such as professional experience, resources, and the market you want to target. However, some sectors that present good opportunities in Portugal include:

  • Tourism: Portugal is one of Europe’s leading tourist destinations, which generates business opportunities related to hotels, restaurants, leisure activities, and others.
  • Information Technology: The IT sector in Portugal is growing, with demand for qualified professionals and innovative companies.
  • Renewable Energy: Portugal, with its great potential for renewable energy production, is supported by specific government initiatives or incentives, which opens up opportunities for companies operating in this sector.
  • Agriculture: Agriculture is an essential sector of the Portuguese economy, with opportunities for companies to produce food, drink, and other agricultural products.
start a company in portugal

Is there support or funding for setting up a company in Portugal?

The Portuguese government offers several support programs for companies, indicating various partners, focusing on different sectors and areas of activity. Some of the main support programs include:

Portugal 2030

This program funds companies that invest in research, development, and innovation. Portugal 2030 is implemented through 12 programs, which allocate support based on the region where they are developed or the area of activity in which they operate.

StartUP Portugal

StartUP Portugal aims to support the government in the design and implementation of the National Strategy for Entrepreneurship, monitor the design and implementation of public policies to support entrepreneurship, promote entrepreneurship and Portuguese startups in Portugal and abroad, and seek and implement European funding to boost the entrepreneurial fabric, among other things.

IAPMEI Portugal

IAPMEI is an initiative part of the Capitalize Programme that integrates into a single portal a set of financing solutions with public support to help companies, especially SMEs, in the various stages of their activity and investment.

In addition to these programs, you can consult the Agência para o Investimento e Comércio Externo de Portugal (AICEP).

Portuguese Visas for entrepreneurs 

There are different types of visas for entrepreneurs wishing to set up a business in Portugal. The type of visa that is right for you will depend on your situation.

D2 Visa

The D2 Visa attracts many entrepreneurs is the gateway to setting up a company in Portugal. It is an exciting option for those who plan on owning a small business. It can be applied for at Portuguese consular offices and costs ~90€. It entitles you to stay in Portugal for four months, after which you can apply for a residence permit.

StartUP Visa

StartUP Visa is a program that welcomes foreign entrepreneurs who want to develop an entrepreneurship and innovation project in Portugal. This program provides for a prior certification process for incubators so that they can be entities that host and support entrepreneurial immigrants in creating and installing technology-based companies.

Golden Visa

The Golden Visas are special residence permits granted to those who make significant investments in Portugal. It can be applied for in the following ways:

  • Opening a company in Portugal that creates at least ten jobs;
  • Transferring 500,000€ or more capital for scientific research, setting up or strengthening a company that creates five jobs, or investment and venture capital funds.

Alternatively, in these two conditions, it is possible to make a lower investment (from 250,000 €), as long as the investment is made in some pre-established areas such as local Portuguese heritage or artistic production.

start a company in portugal

What types of company regimes are there in Portugal?

In Portugal, there are various types of companies, each with its characteristics and requirements. There are three types of single enterprises: 

Entrepreneur in Individual Name 

Only one person owns an individual company. It is a way of establishing a business halfway between self-employed workers and a single-person society. Because individual companies are easy to set up and do not require capital formation—that is, compel you to make an initial financial deposit—they are ideal for small businesses that don’t need significant investments. 

Individual Limited Liability Establishment 

It allows for the establishment of a commercial activity through the allocation of a portion of a natural person’s assets, the value of which corresponds to the initial share capital. Business debts may not be paid with personal assets except in bankruptcy. The share capital may not be less than 5,000€. 

Unipersonal Society by Quotas 

A suitable type of company for those who wish to develop an economic activity as a single partner. It can be converted, at a future time, into a quota company with additional partners. An official accountant must validate your accounts, and your invoicing is taxed at the IRC headquarters. 

Collective undertakings 
Company in Collective Name 

It makes it possible to constitute a kind of unlimited liability company in which the members are liable without limit and subsidiarily to the company and in solidarity with each other to the social creditors. This type of company has no minimum amount of compulsory share capital. As such, the partners have unlimited liability for the company’s obligations; that is, their personal assets can be called upon to answer for corporate debts. 

Company by Quotas 

It allows the creation of an appropriate type of company for those who wish to develop an economic activity with two or more natural and legal persons in which the company’s share capital is divided. The share capital of the Shares is freely established (as long as it exceeds 1€) and corresponds to the sum of the shares subscribed by the members. 

Anonymous Society 

It allows the formation of a type of company in which the capital is divided by easily transferable representative securities (shares) and in which each member limits its responsibility and share to the value of the shares it has subscribed to. These societies must have a minimum of five members, except when a company is a partner: in these cases, it is possible to constitute a company with a single partner. 

Society in Comandita 

It allows the formation of a company with two kinds of members and different liability regimes. Committed partners assume liability for the company’s debts under the same terms as the partners of the collective companies. However, committed partners are not liable for any liabilities of the society, as is the case with the members of the joint-stock companies, only by responding to their contributions. The minimum share capital to constitute a Comandita Company is 50,000€. 

Cooperative 

Cooperatives are not for profit but are not prevented from making a profit. According to the legislation in force, they have variable capital and composition and aim “to satisfy the economic, social or cultural needs and aspirations” of their members through cooperation and mutual assistance. To form a cooperative, at least five members are required. 

Association 

Although the associations are listed on the Portuguese government portal as collective enterprises, they often have quite different objectives from traditional enterprises. Even though they can be endowed with wealth and make financial movements, the associations are not for profit. The associations comprise three organs: the general assembly, the management, and the fiscal council. 

create a company in portugal

How to Start a Company in Portugal: Steps to Follow

Foreigners who want to create a company in Portugal face a few obstacles. However, some peculiarities should be considered. The process of opening a company in Portugal covers three types of modalities:

  • Creation of an Hourly Company. Build your company quickly and easily on an Hourly Company counter. This service allows you to create joint-stock, single-person, joint-stock, and non-profit companies.
  • Online Company Creation. The Company Online service can help you create your business quickly and conveniently. You no longer need to move to a desk to form commercial societies and civil societies in commercial form. This service allows you to create societies by quotas, unipersonal by quotes, and anonymous.
  • Traditionally establish the company. The creation of the company by this method involves a series of steps in different Entities and at other times, such as the application of the Certificate of Eligibility, the deposit of the share capital of the enterprise, the preparation of a company pact or constitutive act, the delivery of the declaration of commencement of activity, the commercial registration and the registration in the Social Security.

Setting up business in Portugal: Where to Start

  • Choose the company name: The company name must be unique and followed by legal standards. You can check the availability of the company name on the Commercial Register website.
  • Establishment of the company: Among the mentioned schemes, define the type of company and the share capital. The minimum share capital varies depending on the kind of company. Draw up the company statutes and sign the constitution contract before a notary.
  • Elaboration of the social pact: The social agreement is a document that defines the company’s rules of operation.
  • Open a bank account: The company needs an account to carry out financial transactions and deposit the required minimum share capital.
  • Get the necessary records: The company must register with various public bodies, such as the Commercial Register, Social Security, and Finance.
  • Licences and Authorizations: Obtain the necessary licenses and authorizations to operate your business according to your activity. Likewise, the company needs to contract civil liability insurance.
What are the mandatory requirements for starting a company in Portugal?

The requirements for opening a business in Portugal vary depending on the type of business. Nevertheless, some elements are mandatory:

  • At least one of the partners, or a representative, must be a tax and legal resident in Portugal
  • Foreign members must have a registration NIF, even if they are non-residents
  • Bank accounts based in Portugal
  • Hire a certified Portuguese accountant
  • Having a commercial postal address in Portugal

What documentation is required for starting a business in Portugal as a foreigner?

  • Proof of identity (Citizen Card or Digital Mobile Key)
  • Tax Identification Number (NIF)
  • Forms of Enterprise Opening
  • Statement of liability
  • Signature of the Social Covenant
  • Proof of Bank Account
  • Commercial Register
  • Tax certificate (if an accountant and invoicing system is associated with the company)
What taxes do I need to pay? 

Even before starting a business as a foreigner, you should study the tax issue in Portugal better, seeking to know more about the tax obligations in Portugal, namely the taxes to which a company is liable, such as: 

  • VAT (value-added tax)
  • IRS (Income Tax of Natural Persons
  • IRC (Income Tax of Corporate Persons)
  • Municipal depreciation on IRC taxable profits – varies from municipality to municipality
  • IMI (Municipal Real Estate Tax – varies from municipality to municipality)
  • IMT (Municipal Tax on Expendable Transmissions of Real Estate)
  • Seal tax

How can Pearls of Portugal help?

Opening a company in Portugal as a foreigner can be challenging. But, with proper planning and knowledge of local legislation, foreign entrepreneurs can successfully establish the foundations of their business in Portuguese territory. Luckily, Pearls of Portugal can help you throughout the whole process – from setting up your NIF and bank account to fiscal advice and accountant recommendations. Our mission is to make the steps toward this goal as transparent, risk-free, and effective as possible!

FAQ – Frequently Asked Questions

Yes, foreigners can open a company in Portugal, as long as you all the necessary requirements.

The cost of opening a company in Portugal varies according to the type of company, the number of partners, and the services you hire. In addition, the opening processes also have their costs. Creation of an Hourly Company and Online Company Creation both are around 360€. 

The process can take several weeks, depending on the complexity and formalities required.

Business and Entrepreneur visas, such as the D2 and D3, are the most appropriate for this purpose. For your non-EU workers, a D1 Visa (Work Visa) is adequate.

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