Company registration in Portugal can be completed in just one week. We provide guidance on how to correctly undertake this process and the organizational processes involved.
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Why is it Beneficial to Start a Business in Portugal?
Starting a business in Portugal is advantageous for several reasons:
- EU membership: Enables free movement across Schengen Area countries;
- Eligibility for the “Golden Visa,” granting the right to reside in Portugal for up to 5 years;
- Access to financial incentives from the state: Contractual tax benefits such as SIFIDE (for scientific, research, and development work) and RFAI (investment tax support – tax exemptions or reductions).
Portugal has two free economic zones (Madeira and Azores) and offers the possibility of rapid company registration within a week.
Legal Business Structures in Portugal
In Portugal, you can conduct business in one of the following forms:
- Sole Proprietorship. Owned by an individual/entity with unlimited liability for debts incurred during business operations.
- Individual Limited Liability Establishment (E.I.R.L). Owned by an individual/entity, separating personal assets from business assets, with only the latter being liable for company debts.
- Single Shareholder Company. Ideal for businesses with one shareholder, where the capital amount is freely specified in the articles of incorporation.
- Public Limited Company. Partners have unlimited and joint liability.
- Private Limited Company (LDA). More than one shareholder, with the share capital reflecting the sum of partners’ quotas. The company name must include the abbreviation LDA.
- Partnership Limited by Shares. Features two types of partners: limited and general. The company name must include one partner’s name followed by “Em Comandita.”
- Cooperative. Autonomous, non-profit entities with variable capital and membership, aiming to meet members’ needs by providing goods below market prices or by eliminating middlemen. Liability is typically limited to the share contribution.
- Association. A group of individuals united by common goals and interests, comprising a general assembly, a board, and an audit committee, operating freely without state intervention.
For accurate business form selection, consult First Legal Portugal.
Legislative Requirements for Company Registration
Foreign nationals often choose LDA and SA structures for business.
For LDA:
Small business owners in Portugal have limited liability for debt obligations. Opening a company requires depositing the share capital corresponding to partners’ quotas and appointing a director. The share capital for some forms cannot be less than €5,000, payable in cash, goods, or rights subject to claim.
For SA:
Suitable for those planning to collaborate with the Portuguese Stock Exchange. The company must have at least five founders and a minimum of €50,000 share capital for registration. Partners have equal liability only if they contribute equally to the share capital.
Documents Required for Registration
Initially, obtain a taxpayer identification number and draft the Articles of Association, detailing the company name, founders’ information, business area, duties, and share transfer rights. Subsequently, you will need:
- Passport;
- Founding document.
All documents must be in Portuguese and notarized.
Process Duration and Steps for Business Registration
You can register a business in Portugal within a week by:
- Creating and verifying the legal entity’s name in the Register;
- Appointing a tax representative;
- Drafting the Articles of Association;
- Opening a bank account and depositing the share capital;
- Obtaining a taxpayer number;
- Paying fees and duties;
- Submitting company registration documents;
Registering with the tax office and social security fund.
This can be done independently or by engaging the services of First Legal Portugal.
Cost Overview for Company Registration
Costs vary depending on your legal structure:
- Government fee – from €220;
- Tax identification number creation – €150 per taxpayer;
- Bank account opening – from €250;
- Accountant payment for three months – from €900;
- Tax representation for three months – from €300.
Additional payments for trademark registration, tax office, and social security fund registration, and obtaining a physical company card are required.
Subsequently, monthly taxes and VAT payments are necessary. Their rates depend on the company’s registration location, ranging from 5 to 21%, with some business owners eligible for tax exemptions or reductions.
Benefits of Remote Registration
In Portugal, you can open a company without being physically present in the country or legal bodies by engaging a mediator to assist from naming your enterprise to tax authorization. First Legal Portugal legal services are recommended.
The main advantages of remote business formation include eliminating the need for:
- Renting accommodation in Portugal;
- Spending on travel and stay in the country.
Contact First Legal Portugal’s lawyers and legal advisors. We guarantee security and reliability, save your time, and maintain peace of mind by navigating all bureaucratic stages of company creation on your behalf.