Setting up of a company in Portugal

Portugal is a popular destination for business start-ups, particularly for UK-based entrepreneurs. The Portuguese government has implemented a number of incentives to encourage small businesses which are perceived as the backbone of the Portuguese economy.

Foreign nationals aiming to start a business in Portugal will require the following to legally set up a business in Portugal:

1. Portuguese residency card
2. A tax number
3.  A Social Security number 

You will also need to have a name for your business and a Portuguese address to be able to set up a company. 

There are immigration and visa requirements.  Non-EU nationals will need a Portuguese work permit and a residence permit.

Set up

There are three main methods of setting up a company in Portugal, two online facilities and a method that follows traditional lines.

The online methods are differentiated as follows:

1.    An online setup – Empresa Online – currently takes between one to two days.  An electronic certification is required.

2.      Setting up an on-the-spot entity – Empresa de Hora - generally used for sole traders and limited companies can be set up through a government scheme. The principals of the company must be present together with the documentation required.  It is also advised to include your legal representatives as well.

3.      Setting up a company by a traditional method involves obtaining a Certificate of Admissibility through the Institute of Registries and Notaries (IRN) which will enable your new company to be formally identified.  The main business identity is established by a Company Card and a Collective Card, also from the IRN.

You will need to open a business bank account and make an inaugural deposit.  The local Tax Office must be informed of the commencement of your commercial activity.  Registration at both the Commercial Registry Office – to register your Portuguese business and at the Social Security Office - to register as an employer.

Types of Business Entity

Businesses in Portugal have a variety of legal structures, from a sole trader to a large incorporated organisation, they range from:

A single owner

• Sole trader
• Single-member limited company
• Individual limited liability establishment

Private Limited Company (Sociedade por Quotas).  A business owned by more than one person

• A Portuguese company with at least two partners requires a capital investment of €5,000. Each shareholder pays a minimum of €100 per share.  They have joint responsibility for all matters agreed in the Articles of Association. They are also liable for any debts up to the value of the business assets.          

Public Limited Company (Sociedade Anomina) a business requiring at least five shareholders

• A minimum capital investment of €50,000 is required. Liability for debts is limited to the value of the business assets and the shareholders are personally liable for the value of their shares.

Partnership (Sociedade em Nome Colectivo)  Portuguese company with a minimum of two partners

• The partners’ liability extends to their personal assets that can be used to cover debts accrued.

Limited Liability Partnership (Sociedade em Comandita) a company with a selection of types of partners.  General partners running the business with unlimited liability whose personal assets can be seized.  Sleeping partners, investment partners that provide capital, with liability limited to the extent of their investments.

A Cooperate and not-for-profit organisation runs on the principle of mutuality for the benefit of the members.  Portuguese cooperatives are regulated by Antonio Sergio Cooperative Sector Institute (Cases)

Branch or Subsidiary for a Foreign Company

A foreign business wishing to establish a branch or subsidiary in Portugal will have to register the branch office’s name with the IRN and also register with the Commercial Registry Office.  The parent company’s incorporation documents will be required, as well as the board of directors’ confirmation confirming the opening of a branch.  A power of attorney is required.

For more information about business startup or setting up a branch office in Portugal please click here