starting & registering a business in portugal
Portugal has emerged as one of Europe’s most attractive destinations for entrepreneurs and business owners. With its strategic location, stable economy, and business-friendly policies, starting a business in Portugal is a relatively straightforward process that opens doors to the entire European Union market.
Why Start a Business in Portugal?
Economic Stability, Innovation, and EU Access
Portugal offers a stable and thriving economy with particularly strong performance in the technology sector, real estate market, and tourism industry. The World Bank ranks Portugal 39th out of 190 countries for ease of doing business, reflecting the country’s commitment to creating a favorable business environment.
As a full member of the European Union, Portugal provides entrepreneurs with direct access to the European single market, enabling the free movement of goods, services, and capital across 27 member states. This strategic advantage makes Portugal an ideal gateway for businesses looking to expand throughout Europe.
The country has developed into a thriving tech hub, attracting international companies and startups with its innovative ecosystem and digital infrastructure.
Government Support and Business-Friendly Policies
The Portuguese government actively supports entrepreneurship through comprehensive programs including grants, tax incentives, and financial support schemes. These initiatives are designed to encourage both domestic and foreign investment, making Portugal an attractive destination for business establishment.
Government support extends beyond financial incentives to include practical assistance through dedicated online platforms and streamlined registration processes that simplify business formation.
Top Locations for Entrepreneurs and Expats
Lisbon, Porto, and Braga have become particularly popular destinations for expats and international companies. These cities offer vibrant business ecosystems, excellent infrastructure, and strong international communities that facilitate networking and business development.
Each location offers unique advantages: Lisbon serves as the country’s economic and political center, Porto provides strong industrial and commercial foundations, while Braga offers emerging opportunities in technology and innovation sectors.
Language, Lifestyle, and Quality of Life Benefits
Portugal offers exceptional quality of life with its favorable climate, rich culture, and welcoming atmosphere. Most Portuguese nationals in urban areas speak English fluently, reducing language barriers for international entrepreneurs.
The country’s excellent education system ensures access to qualified talent, while the relatively low cost of living compared to other Western European countries makes it an economically attractive destination for business operations.
Who Can Start a Business in Portugal?
Requirements for EU/EEA/Swiss Citizens
EU, EEA, and Swiss citizens can start a business in Portugal with minimal bureaucratic requirements. They must obtain a Portuguese tax identification number (NIF), social security number, and a registration certificate from their local city hall (câmara municipal) within 30 days after their first three months in the country.
The process is straightforward and typically involves registering with tax authorities and acquiring the necessary documentation to operate legally within Portugal’s business framework.
Visa Options for Non-EU Citizens
Non-EU citizens must obtain appropriate visa authorization before establishing a business in Portugal. Several visa options are available depending on the nature and scale of the intended business activity.
The D2 Visa (Entrepreneur Visa) requires a comprehensive business plan, proof of economic viability and relevance to Portugal, and evidence of experience in the relevant sector. This visa is designed for entrepreneurs planning to establish significant business operations in Portugal.
The StartUP Visa is available for entrepreneurs participating in recognized startup incubator programs, providing a pathway for innovative business ventures with structured support systems.
The Golden Visa requires a minimum investment of €250,000 and provides residency benefits alongside business opportunities, making it attractive for high-net-worth individuals seeking both investment and lifestyle benefits.
The Digital Nomad Visa (D8) is suitable for freelancers and remote entrepreneurs who wish to base their operations in Portugal while serving international clients.
The Highly Qualified Activity Visa (HQA) is designed for those establishing innovative business projects or investments that benefit the Portuguese economy, particularly in technology and research sectors.
Key Pre-Registration Steps
Before registering a company, several essential steps must be completed to ensure legal compliance and operational readiness.
Obtaining Portuguese residency status, either temporary or permanent, is the first crucial step for non-EU citizens planning to establish a business presence in Portugal.
Applying for the NIF (Número de Identificação Fiscal), the Portuguese tax identification number, must be completed at the tax office (Finanças). This number is required for all business activities, banking operations, and tax compliance.
Obtaining the Social Security Number (Número De Segurança Social – NISS) is necessary for employment benefits and business registration with social security authorities, ensuring compliance with Portuguese labor and social security regulations.
Choosing the Right Legal Structure
Portugal offers various legal structures to accommodate different business needs and ownership arrangements, each with distinct advantages and requirements.
Sole Proprietorship Options
Individual Entrepreneur (Empresário em Nome Individual)
This structure allows individuals to sell services and products without minimum capital requirements, making it the most accessible option for new entrepreneurs. However, it offers no separation between personal and business assets, creating unlimited liability exposure where personal assets can be used to satisfy business debts.
Benefits include tax exemption from social security fees for the first year and suitability for low-risk business ventures requiring quick establishment. This structure is ideal for service providers, consultants, and small-scale operations where liability exposure is minimal.
Individual Limited Liability Establishment (EIRL)
The EIRL structure requires minimum share capital of €5,000 but provides crucial separation between personal and business assets. This structure limits liability to assets directly associated with the economic activity, offering greater personal asset protection than individual entrepreneurship.
This option is particularly suitable for businesses with higher risk profiles or those requiring equipment, inventory, or other significant asset investments where personal asset protection is essential.
Sole Proprietorship by Shares (Sociedade Unipessoal por Quotas)
Owned by a single shareholder with minimum investment of €1, this structure provides limited liability protection while maintaining simple ownership structure. It separates personal and business assets while protecting personal wealth from business debts.
This structure requires a separate bank account and professional accounting services, making it suitable for entrepreneurs who want limited liability protection while maintaining full control over business operations.
Partnership and Company Structures
General Partnership (Sociedade em Nome Coletivo)
This structure requires at least two partners with no minimum share capital requirements, making it accessible for collaborative business ventures. Each partner bears unlimited liability for company obligations, meaning personal assets can be used to cover business debts.
This structure is suitable for businesses where partners want direct involvement and shared responsibility, particularly in professional services or businesses where partners bring complementary skills and resources.
Private Limited Company (Sociedade por Quotas)
One of Portugal’s most popular business structures, the Private Limited Company requires minimum investment of €1 with shareholder liability limited to invested capital. Partners share quotas representing their ownership percentages, and liability is restricted to company assets in case of debt.
This structure offers ease of establishment combined with effective asset protection, making it ideal for small to medium-sized businesses planning growth or seeking investment. The flexibility in ownership structure and management makes it suitable for both local and international partnerships.
Public Limited Company (Sociedade Anónima)
A more complex structure with extensive regulations, the Public Limited Company requires at least five partners and minimum capital of €50,000. Partners own company stock, and shareholder liability is restricted to the value of their shares.
This structure is suitable for larger enterprises planning public investment or significant capital requirements. The formal governance structure and ability to issue shares make it appropriate for businesses seeking public investment or planning substantial expansion.
Limited Partnership (Sociedade em Comandita)
This structure requires at least two partners with a unique arrangement including managing partners who bear unlimited liability and limited partners whose liability is restricted to their investment amount. No minimum capital requirements make this a flexible option for businesses with distinct management and investment roles.
This structure works well when some partners want active management involvement while others prefer passive investment roles with limited liability exposure.
Cooperative Organizations
Cooperatives operate with variable capital requirements and function on non-profit principles focused on member benefits rather than profit maximization. These organizations are suitable for community-focused businesses or social enterprises with shared ownership and democratic decision-making structures.
Cooperatives are particularly effective for agricultural, housing, or service enterprises where member participation and community benefit are primary objectives.
How to Register a Business in Portugal
Online Registration via Empresa Online
The Empresa Online platform enables creation of sole proprietorships by shares, quotas, and public limited companies through a streamlined digital process. Registration requires a digital certificate such as the Citizen Card, and qualified lawyers can assist using their professional digital certificates.
The process typically takes a few days to complete, and progress can be tracked through the Dossier Eletrónico da Empresa system. This method provides convenience and efficiency for straightforward company formations.
However, this online method cannot be used when company capital involves contributions in kind (non-cash assets such as equipment, property, or intellectual property), which require traditional registration procedures.
In-Person Registration at Empresa na Hora
Available at specific desks in Espaços Empresa or Commercial Registry Offices, this service allows setup of sole proprietorships by shares, quotas, and public limited companies through face-to-face assistance. With all necessary documents prepared in advance, the process can be completed in under one hour at a single desk.
Appointments can be booked in advance for convenience, and this method is particularly useful for entrepreneurs who prefer personal guidance through the registration process or have complex formation requirements.
Traditional Registration Process
The traditional method involves completing sequential steps at different entities and various timeframes. This comprehensive approach includes applying for Certificate of Admissibility, depositing share capital in designated bank accounts, preparing memorandum and articles of association, submitting statement of beginning activity, completing commercial registration, and finalizing social security registration.
While more time-consuming than modern alternatives, this method accommodates complex business structures and specific requirements that cannot be handled through simplified online or in-person services.
Step-by-Step Guide to Business Registration
The registration process follows a logical sequence beginning with applying for the NIF (Portuguese tax identification number), which serves as the foundation for all subsequent business activities and legal compliance.
Choosing the appropriate legal form and company name comes next, with options to select from pre-approved names or request a Denomination Approval Certificate for custom names that require approval.
Opening a business bank account and depositing the required initial capital establishes the financial foundation for company operations and demonstrates compliance with minimum capital requirements.
Drafting the Articles of Association creates the governing documents that define company structure, management, and operational procedures according to Portuguese commercial law.
Acquiring Commercial Registration formalizes the company’s legal existence and enables it to conduct business activities legally within Portugal.
Declaring the start of activity with tax authorities ensures proper tax registration and compliance with Portuguese tax obligations from the beginning of operations.
Registering for social security completes the employment-related registrations necessary for hiring employees and meeting social security obligations.
Required Documents for Company Formation
Essential documentation includes the articles of incorporation (articles of association) which define the company’s structure and governance, the certificate of association proving legal formation, and the enterprise card providing official identification.
Electronic access codes enable online interaction with government systems, while the access code for permanent certificate of commercial registration provides ongoing access to official documentation.
The social enterprise security number links the company to Portugal’s social security system, and personal identification documents such as identification cards, passports, or residence permits verify the identity of company founders and representatives.
Registration costs approximately €360 with custom memorandum and articles of association, or €220 with pre-approved documentation templates. Additional trademark registration costs €100 for one class, plus €44 for each additional class, with costs potentially increasing for businesses involving real property.
Special Business Types and Their Requirements
Freelancers and Sole Traders
Freelancers operate as self-employed individuals requiring specific documentation including residence permits, work permits, NIF, social security numbers, and Portuguese bank accounts. Registration can be completed via Portal das Finanças or local finance offices, providing flexibility in the application process.
Freelancers bear responsibility for personal income tax calculations and social security payments, requiring careful attention to tax compliance and quarterly or annual filing requirements depending on income levels.
Online Businesses and E-Commerce Regulations
Online businesses follow regular registration processes but must comply with comprehensive Portuguese legislation governing digital commerce. This includes adherence to Price Law governing pricing transparency, Consumer Law protecting customer rights, Data Protection Law ensuring privacy compliance, Copyright Law protecting intellectual property, Publicity Law regulating advertising, and E-commerce Law specifically governing online retail operations.
These regulations ensure consumer protection while enabling digital businesses to operate effectively within Portugal’s legal framework.
Foreign Companies: Branch vs Subsidiary
Foreign companies can enter the Portuguese market through two distinct structures, each offering different advantages and obligations.
Branch Offices (Sucursal) function as extensions of foreign parent companies without separate legal personality, carrying out the same activities as their parent organizations. Registration costs €200 and requires comprehensive documentation from the origin country, including updated Commercial Registry documentation, General Meeting minutes granting powers, identification of authorized representatives, and parent company Memorandum and Articles of Association. All foreign documents must be professionally translated into Portuguese, and the branch must be declared at the Registro Central do Beneficiário Efetivo (RCBE) within 30 days.
Subsidiary Companies maintain separate legal personality from parent companies, following standard Portuguese company formation processes and becoming subject to Portuguese corporate taxation and regulatory requirements. This structure provides greater operational independence but requires full compliance with Portuguese corporate law.
Non-Profit Businesses and Cooperatives
Two primary legal forms exist for non-profit organizations: associations focused on social activities and cooperatives which can have commercial purposes while maintaining community benefit objectives. Both structures can be registered at local notary offices with specific formation procedures available through government resources.
These structures are particularly suitable for community development projects, social enterprises, and organizations focused on public benefit rather than profit maximization.
Buying a Shelf Company in Portugal
Foreign investors seeking rapid market entry can purchase shelf companies, which are pre-registered but inactive entities that allow immediate business operations without lengthy formation processes. This option provides quick access to Portuguese business registration while maintaining full legal compliance.
Shelf companies are particularly attractive for time-sensitive business opportunities or international companies requiring immediate Portuguese presence for contracts or partnerships.
Post-Registration Requirements
Setting Up a Business Bank Account
Establishing a separate business bank account is essential immediately after registration and requires careful research of different banks and their offerings including fees, online banking capabilities, and international transaction services. Required documents typically include company registration certificates, proof of NIF, articles of association, and identification documents for directors and shareholders.
Choosing the right banking partner affects daily operations, international transactions, and financial management capabilities throughout the business lifecycle.
Understanding Taxes and VAT
Portuguese companies face multiple tax obligations that require careful planning and ongoing compliance management.
Value Added Tax (VAT/IVA) varies between 6%, 13%, and 23% depending on the nature of goods and services provided, with payments required monthly or quarterly based on business volume and structure.
Corporate Income Tax (IRC) applies as a flat rate of 21% on annual taxable profits, with small and medium companies eligible for a reduced 17% rate on their first €15,000 of taxable profit.
Local Municipality Surcharges (Derrama municipal) can add up to 1.5% on annual profits, with additional charges applying to profits exceeding €1.5 million, varying by municipal jurisdiction.
Corporate Income Tax (IRC) and Simplified Regimes
Small businesses and sole traders with annual turnover under €200,000 can choose between organized and simplified tax regimes, providing flexibility in tax calculation and compliance requirements. Above €200,000 annual turnover, the organized regime becomes mandatory.
Under the simplified regime, tax calculations are based on turnover rather than profit, which can provide advantages for businesses with high expenses or complex profit calculations.
Corporate tax returns must be filed annually between April 16 and May 16, with penalties for late filing. Working with certified accountants is strongly recommended for accurate tax compliance and optimization of available tax benefits.
Social Security Contributions and Employer Duties
All businesses must register with social security authorities and enroll any hired employees in the Portuguese social security system. Employer contributions amount to approximately 23.75% of employee gross salary, while employees contribute around 11% of their gross wages.
Contributions must be paid between the 1st and 15th of the month following the payroll period, with monthly remuneration statements required for all employees. Failure to meet these obligations can result in significant penalties and legal complications.
Hiring Employees and Labor Law Basics
Portuguese employers can hire staff for fixed-term or permanent positions, with temporary contracts requiring minimum six-month durations. The 2024 minimum wage is €820 per month, and employers must ensure compliance with this requirement for all employees.
Understanding Portuguese labor law is essential for proper employment practices, including working hours, vacation entitlements, termination procedures, and employee rights. Recruitment can be facilitated through professional recruitment companies or the IEFP (Employment and Vocational Training Institute), which offers free services and provides hiring incentives for qualified candidates.
Licenses, Permits, and Sector Regulations
Sector-specific licenses and permits must be obtained through the Directorate-General for Economic Activities (DGAE) via the Balcão do Empreendedor (BDE) platform. Requirements vary significantly across industries, with some sectors requiring multiple permits from different authorities.
Municipal construction licenses are required for building or renovation projects, while retail permits may be necessary for physical store operations. Restaurants need specific licenses to serve alcohol, obtained from local municipalities (Câmara Municipal), and must comply with health and safety regulations enforced by ASAE (Economic and Food Safety Authority).
Documentation for alcohol permits typically includes business registration, identification documents, health and safety certificates, and detailed floor plans of the premises.
Business Insurance Obligations
Portuguese law mandates certain types of business insurance, with workplace accident insurance (seguro de acidentes de trabalho) being compulsory for all businesses with employees. This insurance protects both employers and employees in case of work-related injuries or accidents.
Credit insurance remains optional but is recommended for businesses extending credit terms to customers, providing protection against customer default and improving cash flow management.
Maintaining Legal Compliance
Ongoing legal compliance requires registration of any changes to company structure, authorized representatives, or share capital to ensure continued legal status. This includes mergers, acquisitions, and company dissolution procedures, all handled through the commercial registry system.
Regular compliance monitoring helps avoid penalties and ensures business operations remain within Portuguese legal requirements throughout the company lifecycle.
Government Support and Incentives
Financial Incentives and Grants for Entrepreneurs
The Portuguese government offers comprehensive public incentives through several specialized agencies designed to support business development and economic growth.
IAPMEI (Agency for Competitiveness and Innovation) provides extensive incentive schemes for innovation projects, SME qualification programs, internationalization support, and research and development initiatives. These programs offer both financial support and technical assistance for qualifying businesses.
Turismo de Portugal promotes tourism industry projects through venture capital investments, real estate investment programs, and mutual guarantee company partnerships, specifically supporting businesses in Portugal’s vital tourism sector.
Support for Foreign Investment
AICEP (Portuguese Agency for Investment and Foreign Trade) manages foreign investment projects that contribute meaningfully to the local economy through increased Gross Value Added, reduced trade deficits, and job creation opportunities. This agency provides specialized support for international businesses establishing Portuguese operations.
Foreign investment support includes assistance with regulatory compliance, identification of suitable locations, and connections with local partners and suppliers to facilitate successful market entry.
Startup Incubators and Youth Programs
Young entrepreneurs aged 18-30 can apply for the Investe Jovem program, regulated by IEFP, which offers both financial support and technical advice for qualifying business ventures. This program recognizes the importance of supporting young entrepreneurs in building Portugal’s economic future.
In Lisbon, Startup Lisboa provides private incubation services including professional mentoring, networking opportunities, investment connections, and physical office space for qualifying startups. Similar programs exist in other major Portuguese cities.
Helpful Government and Legal Resources
Key government resources include ePortugal, which serves as a comprehensive entrepreneurship guide, and Justica.gov, providing official company formation information including costs, required documents, and brand registration procedures.
Portal do Licenciamento offers detailed licensing information across all business sectors, while Ministério dos Negócios Estrangeiros provides comprehensive visa information for international entrepreneurs.
The official government website gov.pt serves as the central contact point for public services related to economic activity, providing a single access point for government business services.
Business Culture and CSR in Portugal
Business Etiquette and Communication Norms
Building personal relationships forms the foundation of successful business operations in Portuguese culture. Decision-making processes often take longer than in other European countries, reflecting the importance of consensus-building and thorough consideration of all stakeholders.
Punctuality and deadlines are often approached with flexibility, requiring patience and understanding from international business partners. Formal titles and respectful communication are commonly used, particularly in initial business relationships.
In-person discussions are strongly preferred over phone or email communications for important business matters, reflecting the relationship-focused nature of Portuguese business culture. While English is widely spoken in major cities, learning Portuguese demonstrates commitment to the market and enhances relationships with local suppliers and partners.
Corporate Social Responsibility and Recognition
Corporate Social Responsibility has become increasingly important in Portuguese business culture, with the country ranking 20th globally for sustainable development goals in 2022. While not legally mandatory, adopting comprehensive CSR standards can add significant value to business operations and market positioning.
The RSO network actively promotes CSR initiatives across Portuguese businesses, while the APEE (Portuguese Association for Business Ethics) recognizes and celebrates companies making substantial contributions to sustainable development goals.
Businesses can apply for formal CSR recognition through APEE programs, which provide marketing benefits and demonstrate commitment to sustainable business practices to customers, partners, and stakeholders.
Legal Assistance and Professional Guidance
Why Hiring a Lawyer is Recommended
Working with experienced legal counsel is highly recommended for all entrepreneurs, particularly expatriate business owners establishing Portuguese operations. Professional legal guidance ensures proper formation procedures, regulatory compliance, and optimization of available tax benefits and incentives.
The business formation process may differ significantly from procedures in other countries, and language barriers can create complications without proper professional assistance. Lawyers provide essential guidance through complex regulatory requirements and help identify opportunities for legal and tax optimization.
Finding the Right Legal Partner
Selecting law firms with specific experience in advising startups and international businesses ensures access to relevant expertise and industry knowledge. Experienced legal partners can identify opportunities for tax optimization, ensure compliance with evolving regulations, and provide ongoing support for business growth and development.
Professional legal guidance proves particularly valuable for navigating sector-specific regulations, employment law requirements, and complex tax structures that may benefit specific business models. The investment in professional legal assistance often pays for itself through avoided mistakes and optimized business structures.
Quality legal partnerships extend beyond initial formation to provide ongoing support for business expansion, regulatory changes, and strategic planning throughout the company’s development and growth phases.
This comprehensive guide provides essential information for starting and registering a business in Portugal. For the most current requirements and procedures, always consult official government sources and qualified legal professionals.