How to start a business in Portugal - company formation, residency & visas, accountants & taxes

A natural hub for trade between Europe and America, Portugal has an open economy and actively seeks to attract foreign investment, with plenty of incentives available. (See our articles about Portuguese Tax Breaks and Why Startups Are Moving to Portugal).

What are the main types of company in Portugal?

There are two main forms of corporate structure for foreign companies:

  • Public company (S.A.)
  • Private limited company (Lda)

Requirements for company formation in Portugal:

  • The minimum share capital for a Lda is now €1.
  • The minimum share capital changes with the amount of shareholders.  One shareholder €1, two shareholders €2. This lower share capital amount is dependent on the business activities of the company and does not require any authorisation. The shareholders will have to make a declaration that the share capital was deposited.
  • Banks may require more than this figure in order to set up an account and provide good financial conditions.  They should be able to show that the company has good collateral and a solid business plan.
  • You will need to sign documents with a notary and sign forms for the bank account within 15 days of the company formation.
  • An electronic post box is required in order to receive the Portuguese tax correspondence. These are issued through the Portuguese Post Service (CTT) with a specific ID code and password. The account must be checked on a regular basis.
  • An accountant should be appointed prior to incorporation as VAT registration or the filing of tax returns without the intervention of a chartered accountant is not permitted. We can provide expert accountants along with a registered address for the company. But if you have your own accountant, confirmation is needed to prove they can provide a registered office address for the company.

What are the main features of a public company?

  • This is the standard format for large businesses
  • Minimum share capital is €50,000
  • Minimum number of shareholders is five
  • Stringent accounting and auditing requirements

Is it complicated to set up a company in Portugal?

Portugal has streamlined its incorporation procedures in recent years, although professional advice remains absolutely essential. Our network of local experts in Portugal will be there to guide you.

Golden Visas and resident permits in Portugal

Portugal has many accommodating options for immigration, particularly the ‘Golden Visa’. The Golden Visa is a citizenship scheme that involves making a substantial investment in exchange for residency. Investments can be in capital, property or targeted employment, although the majority of successful applications are for property. An investment of as little as €350,000 in an area of urban renewal, or €500,000 for property in any location, secures a visa with a guaranteed route to permanent residency. Golden Visa holders only have to reside in Portugal for seven days in their first year, and 14 days thereafter. They also receive the benefit of free travel within the Schengen zone of 22 countries. By investing in Portugal, a business could move or expand to a lucrative, settled country in the EU with a high quality of life. Business owners can still live and work in their home country, and only take the odd trip to Portugal to oversee their enterprise, also potentially gaining a route into the EU, making it easier to trade goods and resources, and to take advantage of EU standards.

How easy is it to recruit staff in Portugal?

Portugal has a strong and highly developed recruitment industry. There is no shortage of well-qualified applicants for jobs, but it is important to make certain that you are dealing with a recruitment agency that you can trust. It’s also worth noting that Portuguese labour laws protect the employee and it’s essential to take advice before entering into a contractual arrangement. We have a panel of recommended recruitment and employment law specialists in Portugal who will be happy to help you on this issue.

What is the regulatory environment like?

For centuries Portugal has relied on international trade and this is reflected today in the liberal nature of its economy. The regulatory environment is easygoing, while maintaining standard EU rules. Foreign companies are free to invest as they wish, although there are limits in certain strategic sectors. There are no obstacles to capital entering the country, nor any restraint on the repatriation of profits or dividends.

Are there financial incentives available?

Portugal offers generous incentives, many of them backed by EU funds, to attract foreign companies wishing to invest. Special incentives are available for large investment projects and for proposals that would impact positively on tourism, science and the environment.

What about banking facilities?

Most major international banks and financial institutions have a base in Portugal and offer a full range of banking facilities to investors. The local financial sector is also more than capable of meeting the needs of the international investment community. You will need a bank account if you want to open a company in Portugal which we can help you with.

For more information about company formation, including registering a business addressVAT servicesaccountants or bank accounts, please call us on 0033 (0)1 53 57 49 10 or email us from our contact page and we’ll be happy to help.