Doing business in Portugal involves several key steps, from choosing the right legal structure and securing necessary documentation to complying with tax and social security obligations.
The process is generally streamlined, especially with online options, but non-EU/EEA citizens will have additional visa and residency requirements.
Here is a step-by-step guide on how to start a business in Portugal:
1. Essential Pre-Registration Steps (Especially for Non-Residents)
- Obtain a Tax Identification Number (NIF): The Número de Identificação Fiscal (NIF) is mandatory for all business founders, directors, and shareholders, whether individuals or entities. Non-residents must appoint a Portuguese tax representative to obtain a NIF.
- Determine Visa/Residency Requirements:
- EU/EEA/Swiss Citizens: Do not require a visa but must request a Registration Certificate from the local city hall after three months.
- Non-EU/EEA Citizens: Must secure a visa or residence permit that allows business activities. Common options include the D2 Entrepreneur Visa or the StartUP Visa.
- Open a Business Bank Account: This is required to deposit the initial share capital for companies.
2. Choose Your Business Structure
Selecting the right legal form is crucial as it determines liability, minimum capital, and administrative requirements.
| Business Type (Portuguese Name) | Minimum Capital | Minimum Shareholders | Liability | Best Suited For |
| Private Limited Company (Lda.) Sociedade por Quotas | Generally €1 per shareholder (€2 total minimum for two) | 1 (Single-member) or more | Limited to the amount of capital subscribed. | Small and medium-sized enterprises (SMEs). This is the most common choice. |
| Public Limited Company (S.A.) Sociedade Anónima | €50,000 | 5 (or 1 if a corporate entity) | Limited to the value of shares. | Larger companies that plan to raise public capital. |
| Sole Proprietorship (ENI) Empresário em Nome Individual | None | 1 | Unlimited (owner is personally liable for all business debts). | Low-risk, small-scale ventures. |
| Freelancer Trabalhador Independente | None | 1 | Unlimited | Consultants, designers, or other service providers working as individuals. |
3. Company Registration Process
You can register a company either online via the Empresa Online service or in-person at an Empresa na Hora counter.
- Reserve a Company Name: Request a name approval certificate (Certificado de Admissibilidade) from the National Registry of Legal Entities (IRN), or choose from a list of pre-approved names.
- Deposit Share Capital: Deposit the required minimum capital into the company’s new bank account and obtain a declaration of deposit.
- Draft and Sign Articles of Association: These documents outline the company’s rules, activities (CAE codes), registered address, and capital distribution.
- Register the Company: Submit all necessary documents (name certificate, articles of association, NIFs, bank deposit proof) to the Commercial Registry (Registo Comercial).
- Obtain Corporate Tax Number (NIPC): The company will receive its corporate tax number (NIPC) upon successful registration.
4. Post-Registration Compliance
- Declare Start of Activity: Within 15 days of registration, the company must declare the start of its business activity with the Portuguese Tax Authority (Autoridade Tributária e Aduaneira). This is where you register for Corporate Income Tax (IRC) and VAT (IVA) if applicable.
- Register for Social Security: The company and its directors/employees must register with the Portuguese Social Security system (Segurança Social).
- Obtain Licenses and Permits: Depending on your industry (e.g., hospitality, retail, construction), you may need specific licenses from the Directorate-General for Economic Activities (DGAE) or other sector-specific bodies.
5. Business Taxation Overview
| Tax Type | Mainland Portugal Standard Rate | Description |
| Corporate Income Tax (IRC) | 21% (Reduced rates for SMEs on lower profits) | Tax on company profits (worldwide for resident companies). |
| Municipal Surcharge Derrama Municipal | Up to 1.5% | Tax levied on taxable profit by the municipality. |
| Value Added Tax (VAT/IVA) | 23% (Intermediate 13%, Reduced 6%) | Tax on the sale of goods and services. Rates vary by region (Madeira and Azores are lower). |
| Social Security Contributions | Approximately 34.75% total (Employer: ≈23.75%, Employee: ≈11%) | Paid on employee salaries. |
It is highly recommended to consult with a local lawyer or an experienced accountant (a Contabilista Certificado) to ensure compliance with all legal, tax, and administrative requirements, especially if you are a foreign investor. They can guide you through choosing the best structure and navigating the registration process.