Starting a business in Portugal

Starting a business in Portugal

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If you want to start a business in Portugal, here's a guide on how to set up your business in Portugal.

Before setting up your new business in Portugal you should make sure you have made a balanced decision. Consider that the level of entrepreneurship in Portugal is still relatively low, but most businesses are small and self-employed. This means you might not make as much money as you hope.

The initiative to set up a company includes a range of risks that must be assessed and important decisions that must be taken, including defining the legal status of the company - in terms of the entrepreneur’s and the business’ liability. Business carried out by a single person must be in the form of one of the following;

  • Empresário em Nome Individual (Sole Proprietor),
  • Estabelecimento Individual de Responsabilidade Limitada (Individual Limited Liability Establishment) or
  • Sociedade Unipessoal por Quotas (Single Shareholder Limited Liability Company).

 

Businesses carried out by more than one person may take the legal form of one of the following;

  • Sociedade em Nome Colectivo (Partnership),
  • Sociedade por Quotas (Limited Liability Company),
  • Sociedade em Comandita (Limited Partnership),
  • Sociedade Anónima (Public Limited Company) or
  • Cooperativa (Cooperative).


If you plan on employing staff, you should be sure to evaluate the cost. You will have to pay not just a regular salary, but 14 months of salary a year, social security contributions, 14 paid public holidays and five weeks paid vacation time.

If you are preparing to start a business in Portugal your first obstacle will be the language barrier. If you do not speak and understand Portuguese fluently, you should hire a translator, as all official documents will be in Portuguese.

If moving to Portugal as a non-European Union national, you may find it difficult to obtain a residence permit on the condition of starting a business. European Union nationals with a residence card however, are free to become self-employed in Portugal.

The process of setting up a business has been simplified recently, and alternative ways have been introduced. These are; Empresa Online (a company can be set up over the Internet) and Empresa na Hora; which allows a company to be set up in under an hour by delivering documentation to one of the special offices: Lojas da Empresa (Business Formality Centres) or Conservatórias de Registo Comercial (Commercial Company Registers).

These simpler methods are not yet available for all legal types of company or in all regions of the country, so the traditional method may have to be used. The basic steps in this method are:

  • Apply for a Certificate of Eligibility and the respective legal entity provisional Identification Card;
  • Deposit the share capital in a bank account opened in the name of the future business;
  • Obtain a public deed executed by a notary (if needed);
  • Declare commencement of activity in a local tax office;
  • Register the company with the Conservatória do Registo Comercial (Company Register);
  • Enrol as a taxpayer.


Before starting your business, you should find a reliable lawyer. Obtaining legal advice will help you identify any tax breaks available and will help you navigate through the bureaucratic process awaiting you.

You should pay attention to the legislation governing the setting up of companies in certain areas of activity, which may require a licence. For some businesses it is illegal to start activity before being granted an official status in Portugal. You may need to have certain qualifications or certificates, and may even have to take a written examination in Portuguese to open a specific business. Lojas de Empresa (Business Formality Centres) can help you in formalising companies and licensing requirements for your particular sector of activity.

Eures / Expatica
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