How to Open a Company in Portugal: The 100% Legit Guide

Portugal is a beautiful country. There’s no doubt about it.

Widely known for its stunning landscapes, rich history, and vibrant culture, the country has been recognized as one of the best to build a tech team – with many entrepreneurs relocating for some time now. With its favorable business environment and strategic location, Portugal offers many opportunities for those who want to expand their business into the country.

That’s why we went through a detailed step-by-step so you don’t miss a thing. Learn how to open a company in Portugal with or without professional help.

What You’ll Learn:

• Open a Company in Portugal: The Reasons Why
  What Makes Portugal So Special for Businesses

• Subsidiary Incorporation in Portugal: The Step-by-Step
  Step 1: Choose the Type of Company
  Step 2: Register your Company
  Step 3: The Business Licenses and Permits

• 4 FAQs on Money, Nationality Requirements, and More
  1. How much does it cost to start a company in Portugal?
  2. Can a foreigner start a business in Portugal?
  3. Is Portugal a good place to set up a business?
  4. What is an LLC called in Portugal?

• So… Is Portugal Really Worth It?

Open a Company in Portugal: The Reasons Why

Portugal doesn’t stop thriving. The buzzing startup ecosystem is much praised, so it’s no surprise that you, too, want to start (or expand) your business in the country.

So, there are a few steps we need to go through. They’re similar but vary a bit depending on where you’re from: inside or outside the European Union – just like this official government guide explains. However, we’ll go through the most common to both situations.

But make no mistake: it’s not a walk in the park – neither way. Portuguese bureaucracy can get very complex, so we advise you to ask for help from the beginning if you want to stay legal and compliant.

Regardless of where you ask it (or if you ever do it), let’s go over the “whys” and the “hows” on how to open a company in Portugal.

What Makes Portugal so Special for Businesses

The European tech scene is thriving, and Portugal remains perfectly located for many businesses. The country is becoming a popular destination for many entities, including entrepreneurs and investors. And it’s easy to understand why:

• Strategic location: the country is in a perfect timezone for doing business in Europe or across the ocean, straight to the US and the rest of America. Portugal personifies the ideal entry to different markets on different continents – and you can’t ignore its strong ties to countries like Brazil or the United States.

• Investment-friendly environment: Portugal remains super attractive to international investment. In fact, the government offers plenty of benefits to those who choose the country to expand or start a business.

• Quality of life: we can’t mention only the obvious here (the good year-round weather, stunning beaches, delicious food, and generally low cost of living). We need to address the security, too. Portugal ranks in 7th place in the 2023 Global Peace Index as one of the safest.

• Highly-talented workforce: the Portuguese have always been known as reliable, skilled workers. Their academic background is solid, and their work ethic is valued worldwide. Plus, many are multilingual due to studying English very early. But that’s not all – there’s much more to know about why you need Portuguese on your team.

We’re speaking of one of the most sought-after countries in the world. Safety, good business relationships, and investment benefits are the reasons why many open a company in the country. So it’s time to understand this topic better – and what company structures you can open in Portugal.

Subsidiary Incorporation in Portugal: The Step-by-Step

If you’re convinced that Portugal is an exciting country for your business, it’s time to dive into the hard stuff. We won’t lie: it gets complex if you don’t dominate the country’s legal and fiscal scenes. So we hope we can make this process easier for you.

But, before anything else, you need 2 specific codes – which identify your business to the tax and social security entities. You need a NIF (Número de Identificação Fiscal) and a NISS (Número de Identificação da Segurança Social), respectively. After that, you’re good to go.

So, let’s start with the types of company structures you can open: individual or collective.

Step 1: Choose the Type of Company

This is the first legal, mandatory part. And you can go 1 of 2 ways.

If you’re the only one opening a company, open an individual company. Then, you must choose 1 of 3 options:

• Individual Entrepreneur

• Individual Limited Liability Establishment

• Sole proprietorship by shares

But, if you’re partnering with one or more people, you must open a collective company. There are 6 to choose from:

• General Partnership

• Private Limited Company

• Public Limited Company

• Limited partnership

• Cooperative

• Association

Choose your company’s name, and you’re good to move to the next step. You can pick one for free from a list of pre-approved names. However, you’ll have to pay the costs if you prefer another one.

This is also when you name some of the company’s roles and set out important information, such as:

• You need to name the shareholders of the company and their managing directors.

• What’s the social object of the company?

• Also, what will be the applicable articles of association? You can either draft them or use a local pre-approved template.

• Company office address: you must register a business address in Portugal. You can find many coworking spaces in Lisbon and elsewhere in the country, allowing you to use their address as your business address.

• Get a certified accountant: when registering your company, you’ll have to prove that you have a certified accountant (TOC), or you can also choose one from an available list at the registration desk. Also, if you decide to create a Public Limited Company, you need to have an auditor – Revisor Oficial de Contas (ROC) – as well.

• Get a lawyer: although not mandatory, getting a law firm involved can be a good idea, especially if you have a complex legal structure or require custom Articles of Association. Talk to us to know who’s the best lawyer for you.

Step 2: Register your Company

Once you pick the type of company you want, it’s time to register it. These are the 3 main ways to do it:

• Empresa Online: it lets you register sole proprietorships by shares, quotas, and public limited companies. You can then follow the whole process online without going to a support desk.

• Empresa na Hora: you can register sole proprietorships by shares, quotas, and public limited companies at the Empresa na Hora desks. And you’ll be able to do it in under an hour.

• The traditional way: if you choose this method, know that you must follow a series of steps in different entities, which means the process can be a bit slower.

Step 3: The Business Licenses and Permits

Bureaucracy in Portugal can be challenging. But it’ll ultimately depend on the type of business and also its industry. Why? Because some may stay at local licenses, while others need national ones.

So, yes, you guessed that right: this is the time for formalities.

Depending on your company’s activity, you need to meet specific requirements – otherwise, your activity won’t be legal in the country. This is when a lot of questions cross your mind:

• What do I have to do now?

• Which licenses and permits do I need?

• Where do I ask them? Where should I go?

• What documents should I submit?

• How much will it all cost?

• How long will it take?

• When can I finally open my business?

This is also when you tell the Portuguese Tax Authorities what you’re about to do and get your company’s tax number (a NIPC). At the same time, you’ll need to register your company and the initial employees at Social Security. Only then will you be able to pay all the monthly taxes. And please don’t forget to open a bank account for your company, which is mandatory in most company types.

And let’s not forget about registering who your business’s Beneficial Owner is.

If you’re still not planning on asking for professional help, that’s OK. We’ve prepared a much more in-depth eBook about how to open a company in Portugal – following all the legal and fiscal rules, including the before and after employee’ hiring.

4 FAQs on Money, Nationality Requirements, and More

Let’s now answer some of the most common questions about starting a business in Portugal.

1. How much does it cost to start a company in Portugal?

It depends (weren’t you expecting this already?). It does.

The cost of opening a company in Portugal varies depending on its structure, activity, services, location, and more. There are a lot of expenses related to business registration, legal assistance, accountants, renting or buying investments, notary fees, registration costs, and any necessary licenses or permits.

You can start spending around €400 but rapidly increase to €1000 or more. Ask for a custom proposal before jumping to any conclusions.

2. Can a foreigner start a business in Portugal?

Absolutely.

In fact, the Portuguese government actively encourages foreign investment and entrepreneurship. Whether you’re an EU citizen or not, you can establish and operate a business in Portugal. However, non-EU citizens must go through a more lengthy process to obtain a Portuguese Work Visa and a Residence Permit.

3. Is Portugal a good place to set up a business?

It is, and you already know some of the best reasons why.

Its strategic location provides faster access to European and international markets. Also, the government offers different incentives, including tax benefits and support programs for entrepreneurs. The country’s quality of life, skilled workforce, generally low cost of living, and nice weather make it an attractive destination for both business and living.

4. What is an LLC called in Portugal?

In Portugal, a Limited Liability Company (LLC) is called Sociedade por Quotas.

This business structure is famous among small and medium-sized businesses due to its limited liability to its shareholders. Still, these companies must adhere to Portuguese company laws and regulations. As you know by now, this is one of the several available setups to incorporate a business in Portugal.

So… Is Portugal Really Worth It?

That’s up to you to decide – but we think it’s worth it!

Now that you have all the step-by-step instructions, it’ll be simpler to know how to open a company in Portugal – following all the legal and fiscal requirements. However, if you’re feeling overwhelmed right now, don’t worry. We can act as your interim country manager and do it all for you. Yes, you read that right.

Speak to our experts, and let’s make your business grow.