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What are the challenges of starting a business in Portugal as a non-EU resident?
Regardless of whether you are a resident or a non-EU citizen, anybody can start a business in Portugal. Compared to the United Kingdom, there are many advantages to starting a business in Portugal, or setting up a Portuguese branch of your existing company. However, non-residents, such as British nationals, may face certain obstacles which can easily be avoided with the help of an international commercial lawyer.
This guide will explore the common difficulties of starting a business in Portugal for non-EU residents, and highlight the benefits of instructing international and multilingual lawyers.
Click on the links below to jump to that section:
Find out what is needed to set up a business in Portugal if you are not a Portuguese citizen.
Discover the common issues non-Portuguese nationals face when setting up a business in Portugal.
Learn the benefits of setting up business in Portugal, and why you should consider instructing an international law firm.
Find out the most frequently asked questions on setting up a Portuguese business.
What do non-Portuguese nationals need to set up a business?
EU citizens must provide a NIF, social security number, and a registration certificate. However, those born outside of the European Union, such as British nationals, will need a work visa (D2 visa) to enter the country, alongside other documentation, including:
- Tax number (Número de Indentificação Fiscal)
- Social security number (Número de Identificação da Segurança Social)
- Business name registration
- Portuguese address
More information regarding the necessary documentation required to set up a Portuguese company, visit our Advice Centre.
Portuguese residence permit
After entering the country with a business visa, non-European Union citizens will need to change to a residence permit to enable you to live and work in Portugal. If they continue to live in Portugal for six years, non-EU citizens can apply to become Portuguese citizens.
At Giambrone & Partners, our international immigration lawyers can assist you by acquiring the correct documentation and offer legal advice during the process of becoming a citizen in Portugal.
Contact Giambrone & Partners today.
What are the common concerns when setting up a business in Portugal?
Although the process of setting up a company in Portugal is fairly straightforward, there can be certain problems that non-EU citizens may face.
Maintaining an unblemished record
As there will be various transactions that will need to be undertaken, a separate bank account should be opened for your new business or branch. In order to set up a Portuguese bank account, you will need a NIF and proof of a Portuguese address.
Giambrone & Partners has a team of banking and finance lawyers that can assist in setting up a bank account in Portugal.
Understanding Portuguese taxation
Once you have set up your new business bank account, there are certain Portuguese taxes that you should be aware of.
Portuguese companies are liable for;
- Corporate income tax (Imposto Sobre o Rendimento das Pessoas Coletivas or IRC), which is 21% paid annually.
- VAT (Imposto sobre Valor Acrescentado or IVA), which ranges between 6 and 23%.
- Derrama municipal, which is a tax on profits and is 1.5% paid annually.
Our international lawyers can guide you with both British and Spanish laws to ensure all transactions are legal. Our multi-lingual lawyers will liaise with you in your own language to avoid the risk of miscommunication.
Contact Giambrone & Partners’ Portuguese lawyers today.
Choosing a business structure
In Portugal, there are a variety of legal structures (forma legal) that companies can choose from. When setting up a company in Portugal, you should decide whether the business will be run as a sole trader or as a partnership.
There are different benefits for each type of commercial legal entity; for example, individual entrepreneurs (Empresário em Nome Individual) have tax exemption for the first year, whereas a general partnership (Sociedade em Nome Coletivo) requires no minimum share capital.
Find out more about the different types of commercial entities you can register in Portugal.
If you require assistance in choosing the most appropriate business entity, contact our international lawyers today.
Insufficient knowledge of Portuguese law
To ensure your business is legal and is compliant with Portuguese law, it is important to seek legal advice from an international law firm that can assist in setting up a company in Portugal and guide you through each step. This includes applying for the relevant visas and permits.
Giambrone & Partners are a team of international lawyers that have various global jurisdictions. Due to the various steps and issues that may arise, our Portuguese office can help ensure a simple company incorporation.
Contact Giambrone & Partners today for more information.
What are the benefits of setting up a business in Portugal?
Portugal is often stated to be one of the best countries for international expansion, due to certain benefits:
Strong business relationships
Portugal has established and maintained strong business relationships with its neighbouring countries within the European Union. Brexit, has made it much harder for British companies to trade directly with EU countries. Setting up a company in Portugal avoids this problem and improves international trade and expansion.
Portugal also has bilateral social security agreements with various countries, such as the United Kingdom.
Tax incentives
Portugal's Golden Visa programme provided tax incentives for citizens outside of the European Union. However, this visa has now been withdrawn. There are still a variety of tax incentives available in the Portuguese market.
The taxation system in Portugal differs from other countries, such as the United Kingdom. None the less, Portugal offers attractive tax benefits for entrepreneurs aiming to form a company in Portugal. In order to drive commerce, the Portuguese government has developed various tax incentives, including deductions and lower VAT rates.
If you are interested in setting up a company in Portugal, consider hiring international and multilingual lawyers.
Contact Giambrone & Partners today to find out how we can assist in setting up your company in Portugal.
Frequently asked questions
Applying for Portuguese citizenship
Portuguese nationality can be acquired at birth or by other means. If one of your parents are Portuguese, nationality is automatically applied. If you are married to or in a de facto union with a Portuguese national, citizenship can be applied for after a period of three consecutive years. You can also apply for citizenship by residence after legally living in Portugal for at least five years.
If you are interested in becoming resident in Portuguese you are strongly advised to instruct international citizenship lawyers who can assist in acquiring citizenship.
Contact Giambrone & Partners today.
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