How to Setup a Company in Portugal – Ultimate Guide and FAQs

If you want to start a company in Portugal, then you’re not alone. There are many startups and entrepreneurs who are looking to make Portugal their home, and for good reason. In recent years, many investors and entrepreneurs have been favouring Portugal over other options, such as France or the United Kingdom, and for good reason. 

The growing interest in company setup in Portugal is partly due to the government’s financial assistance to startups that are committed to innovation and hiring local talent. 

Additionally, the Portuguese government also offers a stable marketplace for new businesses to compete with older, more established enterprises, opening the doors to new customers. Furthermore, setting up a company in Portugal gives businesses easy access to the EU market, which accounts for nearly 7% of the global population. 

However, there are some factors that one needs to consider before setting up a business in Portugal, such as going through all the legal requirements before starting your business. Keeping that in mind, this is going to be your guide on company setup up in Portugal. 

Can You Legally Be a Business Owner in Portugal?

The first question that you will need to answer before going through the company setup process in Portugal is whether can you legally start a company in Portugal; answering this question is especially important for those entrepreneurs who are not residents of Portugal. 

So, before you dive into the company setup process, you need to be certain if you are even eligible to start a business in Portugal. This will require having a Portuguese residency card along with a social security number and a NIF, also known as a tax number from the Portuguese tax office. Those who are non-EU residents, but wish to start a business in Portugal will require a Portuguese visa along with a residency permit. 

Name Your Company

Before starting a company setup process in Portugal, you will need to decide on the name of said company. It is important to brainstorm a few options and check to see their availability in the Portuguese Registry of Business Names.

Startups and new business owners can also register their company name in Portugal through a Validation Certificate, which is known in Portuguese as the ‘Certificado de Admissibilidade.’ The certificate is issued by the authority of the National Registry of Companies and will cost you around €75. This certificate will be valid for around three months and will have to be renewed later.

Types of Business Structures in Portugal

After you have found a name for your company and have verified its availability, you will need to choose the type of business structure that you wish to start in Portugal. This is an important portion of company setup in Portugal for legal and tax reasons. 

For instance, a Private Limited Company, also called ‘Sociedade por Quotas’, requires a capital investment of €5,000, and shareholders will have to pay €100 per share. A Sole Trader establishment is also called an ‘Empresario em Nome Individual’ and does not require any minimum capital. 

Individual Limited Liability Establishment is another option, also called the ‘Estabelecimento Individual de Responsabilidade Limitada’ and requires a capital investment of around €5,000. Single Member Limited Companies require a minimum capital of €5,000 and limit debt liability to assets owned by the business.

Other options include Corporations, limited liability partnership, partnership, and public limited company, which requires a minimal investment of €50,000.

Using ‘Espresa na Hora’

There are essentially two ways to establish a business in Portugal. You have the option of registering your company in person at one of the desk services or ‘Empresa na Hora’ or online with “Empresa Online.”

Empresa na Hora is the quickest choice for forming a corporation because it is instantly available in Portugal. You’ll need to schedule your meeting, gather all of the necessary information, and then begin your path to success with your new business. Before the appointment, you should gather all of your papers and documents.

If all of the prospective company’s partners are independent individuals, they will require:

• An ID card, passport, or residency permission
• Tax identification number (NIF in Portuguese).

To get your business up and running, you’ll need to hire a licensed accountant. If you don’t have one, you can choose one from the OCC listing while registering your business at “Empresa na Hora.” This will set you back a maximum of €50 + taxes.

Following that, the certified accountant will assist you in submitting the Declaration of Start of Activity. They can also assist you in other areas; however, any further services may incur additional fees that must be agreed upon with your certified accountant.

Shared sole proprietorships, quotas, and public limited corporations should apply using the Empresa Online program. A citizen card is required for this. You can also hire a lawyer or attorney to assist you with the procedure by employing a digital certificate. 

You may also apply in person through the process we talked about earlier called Empresa na Hora. This service is provided throughout the country in Espaços Empresa, and appointments may be scheduled in advance. 

If you want to start an internet business in Portugal, you should go through the normal registration process. However, there are a few additional criteria for internet enterprises. To begin, confirm that the organisation conforms to Portuguese legislation.

Paying Taxes

New entrepreneurs and startups who have gone through the company setup process in Portugal need to know that according to new laws, every company operating in Portugal is required to prepare all invoices in accounting software, which needs to be authorised by the Portuguese authorities, and should be linked to the tax authority in Portugal. 

This streamlines the process of taxation and paperwork that’s required by businesses to file for tax returns. Businesses can use Toc Online, which is the preferred accounting software of the tax authorities in Portugal, or Sage One, which also provides similar services. It is important for new business owners to weigh the pros and cons of using both of these services before settling for one to file their business taxes in Portugal. 

Speaking of taxes, the Portuguese fiscal year spans from January 1st to December 31st. If you have applied for NHR and other tax benefits, get the counsel of your accountant and attorneys for an accurate evaluation of your tax liability. Once a firm becomes successful, it will be taxed at 21%, one of the lowest rates in Europe. 

If you own a large corporation, your profits will be taxed progressively up to little more than 30%. Since taxes can be a complicated process in any country, the importance of hiring an accountant who is not only familiar with the taxation rules and regulations in Portugal but also knows English cannot be overestimated. 

Getting Familiar with the Portuguese Trade Register

All companies that are operating within Portugal are required to get their establishments registered with the Portuguese Trade Register. This requires a representative along with a power of attorney to get your business incorporated. This is also one of the reasons why having an experienced lawyer who can guide you throughout the process helps to ensure all legal requirements are met while the company is setup in Portugal. 

It is important to note that this entire procedure can be carried out online as well, and you will require an Articles of Association to the Portuguese Trade register either way. Other documents that will be required for setting up a company in Portugal include; a certificate of association, an electronic access code, an enterprise card, an access code for the permanent certificate of commercial registration, and a social enterprise security card. 

Hiring an experienced lawyer or a professional company setup service in Portugal can help you get all of the necessary documentation in order for a smooth and hassle-free company setup process in Portugal.

FAQs

Who can do business in Portugal?

This will require having a Portuguese residency card along with a social security number and a NIF, also known as a tax number from the Portuguese tax office

How much capital is required by a Private Limited Company?

A Private Limited Company, also called ‘Sociedade por Quotas’, requires a capital investment of €5,000, and shareholders will have to pay €100 per share.

How to apply for business registration in Portugal?

You may apply in person through the process called Empresa na Hora. This service is provided throughout the country in Espaços Empresa, and appointments may be scheduled in advance. 

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