BUSINESS IN PORTUGAL
Portugal is one of the Western European countries that has experienced the most tangible consequences of the global financial crisis of 2008. It is only thanks to the competent policies of the government, international financial aid and foreign investors that the Portuguese economy has recorded gradual growth over the past few years.
Therefore, business in Portugal in 2024 is quite promising, because the local authorities, as never before, are interested in foreign injections and maintaining the economic stability of the state. In addition, if certain conditions are met, own company will allow to obtain a residence permit in Portugal, and six years of permanent residence in the country will give the opportunity to obtain a Portuguese passport.
Family members of a foreign businessman will be able to get a quality education in one of the Portuguese universities, if necessary, find a job in Portugal and connect their lives with one of the most colourful countries in Europe, with a comfortable climate, ancient history and traditions. Further, we will learn how to open a business in Portugal, familiarise ourselves with the main procedural requirements, tax rates, forms of ownership and popular areas for investment.
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How to start a business in Portugal
According to the Doing Business agency, Portugal ranks 39th out of 190 countries in terms of accessibility of starting a business. The country has created the most comfortable conditions for quick registration of a company. For example, in all regions there are special offices that allow you to open a business literally within an hour with the help of Empresa na Hora procedure. Registration is also done via the Internet – Empresa Online.
In any case, a foreigner will need the services of local lawyers, accountants, notaries and tax consultants. Many types of business in Portugal require licences and permits. Sometimes entrepreneurs are required to have special qualifications and certificates, and foreign businessmen are even required to have proof of Portuguese language skills.
There are no other significant restrictions on foreigners to do business in Portugal under local law. The only obstacle for third-country nationals (from outside the EU) may be the process of obtaining a residence permit. It is not so easy to obtain a document, and for a full-fledged and long-term business it is a necessary condition.
Initially, the Department of Immigration and Border Control of Portugal (SEF) issues a residence permit for one year with the right of subsequent extension. For this purpose, the foreigner must first set up a company, register with the tax and social security authorities, and, if necessary, fulfil other requirements of the local authorities.
Entrepreneurs from third countries have the opportunity to significantly simplify the procedure of business immigration to Portugal and obtain a residence permit with the ‘Golden Investor Visa’. The document is issued upon fulfilment of one of the following conditions:
investing at least 1 million euros in the Portuguese economy;
purchase of property worth at least 500 thousand euros;
creation of at least 10 jobs.
Sometimes the amount of investment may be lower, but in any case it is not less than 250 thousand euros.
Procedure and cost of company registration in Portugal
As mentioned earlier, there are several ways to register a company in Portugal. Local specialists will need to be consulted in order to choose the most effective option.
Setting up a business within an hour – Empresa na Hora. The fastest way to register a company in Portugal. For this purpose, special offices of Centro de Formalidades das Empresas or Conservatória de Registo Comercial operate throughout the country. The registration documents of the company must be prepared in advance and the presence of all owners is mandatory. The cost of registration is 360 euros.
Online business registration – Empresa Online. The procedure allows you to register a company via the Internet within two days. To do this, each of the owners must have a special digital certificate confirming electronic signature and identity card. The cost of registration is also 360 euros.
The main stages of company registration in Portugal
Filing an application for the registration of the company name (Certificado de Admissibilidade) and temporary identification card (Cartão Provisorio de Pessoa Collectiva) with the Registo Nacional de Pessoas Colectivas (RNPC). Registration with a notary of the Act of Incorporation of the company.
Application to the tax office for the commencement of the company's activity. Made no later than 3 months from the date of receipt of the temporary identification card.
Registration with the Portuguese Commercial Register (Conservatórias do Registo Comercial).
Registration with the social security and accident insurance authorities.
Within 30 days, you must register with the local office of the Portuguese Ministry of Economy or the Directorate General of Enterprises (DGE).
To avoid difficulties with local bureaucratic procedures, foreign entrepreneurs often use the services of Portuguese business brokers (Despachante).
Forms of business ownership in Portugal
Depending on the number of owners, Portuguese law allows the following forms of business ownership:
Single owner:
Individual or sole proprietor (Empresário em Nome Individual)
Individual limited liability company (Estabelecimento Individual de Responsabilidade Limitada)
Sole shareholder (Sociedade Unipessoal por Quotas)
Multiple owners:
Partnership (Sociedade em Nome Colectivo)
Closed Joint Stock Company with Limited Liability (Sociedade por Quotas)
Limited liability company (Sociedade em Comandita)
Corporation or open-ended limited liability company (Sociedade Anónima)
Cooperative (Cooperativa)
The most popular in Portugal are considered to be:
Sociedade por Quotas. The most common form of ownership for foreign businessmen. The minimum requirements for the authorised capital are 5,000 or 1 euro, depending on the field of activity. The liability of the owners is limited to contributions. There must be at least two shareholders in the company.
Sociedade Anónima. Suitable for setting up a large business. The minimum requirements are an authorised capital of at least 50 thousand euros and at least 5 shareholders. The liability of the owners is proportional to the contributions.
Taxes in Portugal
The tax system in Portugal has a rather flexible structure and moderate rates. Double taxation treaties have been signed with most developed countries.
Rates of the main taxes in Portugal in 2024
Corporate income tax – 21%
VAT. General rate – 23%. Reduced rates of 13, 6% and 0% apply to certain goods and services, e.g. food, passenger transport, medicine.
Investment tax (interest, dividends) – 28%
Income tax – progressive rate – from 13.25% for annual income less than 7.7 thousand euros, to 48% for income over 81.2 thousand euros per year (from 1 January 2024).
For violation of the Portuguese fiscal legislation regarding the timeliness of submission of declarations and payment of tax liabilities by individuals, the fines range from 200 to 55,000 euros respectively. Depending on the circumstances, not only administrative but also criminal liability is envisaged.
Business Destinations in Portugal
Portugal has favourable conditions for the development of tourism and agricultural sector, services, construction, real estate, some industries, in particular, woodworking, production of textiles, clothing and footwear. Many foreigners seek to buy a ready-made business in Portugal, for example, a restaurant, a shop or a small hotel.
When analysing the Portuguese business environment, the obvious fact for a foreigner will be the huge competition with local entrepreneurs. Most companies are small and medium-sized businesses, often family-run. Lack of language skills and cultural differences serve as a barrier to business networking. However, today there are many determined investors who open and run quite successful businesses in Portugal.
