Business and taxes

Business in Portugal: how to quickly open a company and get a residence permit?

Portugal is confidently among the European countries most attractive to investors from all over the world. Some of them consider the Pyrenean country as a place to relax or an opportunity to invest in real estate. And many seek to open a business in Portugal.

We figure out whether it is profitable and what advantages the presence of your own company in Portugal provides.

Business in Portugal: how to quickly open a company and get a residence permit

Why starting a business in Portugal

In subsequent years, the country’s Government relied on attracting private investment in the economy, creating the most loyal conditions for doing business and reducing taxes.

According to the results of 2019, Portugal was among the top 25 countries in terms of doing business. In 2021, the country was ranked 36th in terms of economic competitiveness in the IMD ranking.

Portugal is in the top ten in the world in terms of ease of registering a company. The Portuguese system of quick registration on the Spot Firm allows you to create a company in just over an hour, filling out just one form.

Portugal Golden Visa Program offers residence permits by eight investment options, including starting a business in Portugal.

 Business opportunities in Portugal:

  • possibility to obtain a residence permit under a simplified procedure and citizenship in 5 years;
  • a precise and fast procedure for opening a company;
  • simple administration of the company;
  • withdrawal of capital to the zone of economic stability and hard currency;
  • doing business in a civilised and transparent environment, without corruption;
  • attractive taxation system and working tax incentives;
  • profitable industries, the ability to gain a foothold in the international market;
  • accommodation in a comfortable climate, some of the best beaches in the world.

What business to invest in in Portugal

The tourism industry is the most popular among investors. It brings Portugal about 20% of its GDP, while the country receives more than 25 million tourists annually.

20% of GDP
Tourism is one of the largest industries in Portugal

Other industries that are in demand for investment in Portugal include:

  • grape growing and wine production;
  • growing olives and citrus fruits;
  • production of cork tree bark;
  • production of meat, poultry and products from them;
  • furniture manufacturing;
  • production of ceramic products and tiles;
  • port logistics;
  • fishing and fish processing.

Where to open a business in Portugal

Portugal is divided into seven regions. Of these, two are autonomous regions in the Atlantic Ocean.

There are free economic zones in the Azores and Madeira. These are the most profitable regions for starting a business in Portugal in terms of taxation, benefits, import and export of goods, exemption from duties and free movement of capital.

Investments in the hotel business in the seaside resorts of the Portuguese Riviera, the Algarve, the Azores and Madeira also attract investors. These regions are home to some of the most famous beaches in the world with a considerable number of luxury hotels.

Recently, the Portuguese Government has stepped up the issuance of licences to develop certain deposits of precious metals, mainly in Alentejo. Port complexes, for example, in Aveiro, need investments. Traditionally attracts investors and the capital of Lisbon.

Map of regions of Portugal — Immigrant Invest

Governmental support for starting a business in Portugal

The Portuguese Government has initiatives to support small and medium-sized companies. A practical guide for your business provides information on how to start and manage a business in Portugal and other related information in English.

Startup Portugal is a link between the Government and entrepreneurs by identifying the ecosystem’s needs. It helps to design and implement public policies and private initiatives that react to the community and attract the best foreign talent, founders and investors.

In 2018, the Portuguese Government announced a new set of initiatives for startups and investors and, here are some of them:

  • Startup Visa is a residence visa for entrepreneurs, which aims to attract investment, talent and capacity for innovation to Portugal.
  • Tech Visa is a certification program designed for companies that wish to attract highly qualified and specialised staff to Portugal, nationals from non-Schengen Area countries. 
  • Pitch Voucher promotes the strengthening of the relationship between start-ups and large undertakings. Through the Startup Centre platform, undertakings can raise technological challenges and start-ups can respond with innovative solutions.
  • Semente provides tax benefits to investors who inject capital into early stage startups. Creating a more favourable tax regime for capital gains obtained through startup investment.

Popular among the expats, the Startup Voucher program, Momentum programme and Incubation Valley are no longer active.

How to open a business in Portugal: a registration procedure and company types

All company registration procedures take 2—3 days and are carried out in two stages.

1. Registration through the On the Spot Firm system takes about an hour. The cost of registering a company is €360. 

The investor selects the company's name from the proposed list. It must be done in advance: no later than 90 days before registration. If the investor decides to use the name of the shareholders for the company name, the approval is made directly during registration.

The investor is not limited in choosing the form of a legal entity.

Forms of Portuguese legal entities 

Form of a legal entityConditions for opening and conducting activities
Limited partnership (Sociedade em Comandita)Some partners are liable for all their property, and the other part only with the amount of their shares (limited partners)
Open joint-stock company with limited liability (Sociedade Anónima, SA)The company is established by at least five shareholders, individuals and legal entities. The minimum authorised capital is €50,000. Of these, 30% is paid at registration.

Office in Portugal is mandatory.

The company can issue registered and bearer shares.
Closed joint-stock company with limited liability (Sociedade por Quotas, Lda.)Shareholders are liable in connection with financial obligations in proportion to their shares.

The minimum authorised capital is €1.

The company issues only registered shares.

The minimum number of participants is 2 people, and one of them is a director.

An office in Portugal is mandatory.
Company with a single shareholder (Estabelecimento Individual de Responsabilidade Limitada, EIRL)The founder and sole owner of the business is an individual or legal entity, a resident of any country.

The company’s owner can manage the enterprise themselves or hire a director.

The minimum capital is €2,000, which must be paid in full upon registration.

The company has unlimited liability for debts and obligations.
Cooperative (Cooperativa)A common form in agriculture, which allows you to associate with other individuals in the agricultural sector.

The responsibility of members is limited to shares in the authorised capital.

The minimum number of members is two people.

Upon registration, the investor will be offered ready-made sets of standard constituent documents, depending on the type of company chosen. Thanks to this, there is no need to notarise them. You can also get the articles of association and trade registration there.

The investor needs a tax identification number or an identity card. Legal entities provide an extract from the entry in the commercial register. In return, the applicants get:

  • a certificate of registration of a legal entity;
  • a corporate identification card;
  • a company registration certificate;
  • a social security number.

You can also register a company online via the Empresa Online service

2. Registration of the company in the regional social security centre and the body of social insurance against accidents at work.

Taxes for businesses in Portugal

Corporate tax is levied at the standard rate of 21% in mainland Portugal and 14.7% in the Azores and Madeira.

21%
The standard corporate tax rate in mainland Portugal

The value-added tax (VAT) has a standard rate of 23%. 

In the restaurant and flower business, as well as partly in the production of food products, the rate is 13%. For individual enterprises that produce food products, and medical devices that provide services in the hotel business, there is a preferential rate of 6%.

Enterprises operating in insurance, education, financial and health services do not pay VAT.

VAT rates in the Azores and Madeira are lower than in mainland Portugal. Preferential rates apply to specific categories of goods and services.

VAT rates for businesses in Portugal

Type of goods or servicesMainland PortugalMadeiraAzores
Most goods and services (the standard VAT rate)23%22%18%
Food, books, newspapers, magazines, medicines, medical equipment, and transport services.
Full list
6%5%4%
Energy production, waste recycling, prepared meals and canned food, and musical instruments.
Full list 
13%12%9%

Portuguese legal entities also pay the following taxes:

  • 23.75% — social security contributions;
  • 0.3 to 0.8% of the appraised value — the property tax;
  • 28% — the tax on dividends for residents;
  • 28%— the capital gains tax;
  • 25% — the tax on interest. 

The procedure for paying taxes and the current rates are in the Portugal tax guide.

How to get a Portugal residence permit by business investment

If an entrepreneur wants to move or spend a relatively large part of the time in Portugal, he can open a company and get a Golden Visa in the shortest possible time.

The Golden Visa program for investors has been operating in Portugal since 2013. Unlike ordinary applicants, the investor receives many advantages when applying for this status:

  • they can get a residence permit for a period of 2 months;
  • there is no need to take a language proficiency or history exam;
  • investors do not need to permanently reside in the country, as 7 days a year are enough;
  • the status is obtained by the investor’s entire family, including parents;
  • investors can apply for Portuguese citizenship in 5 years;
  • new residents can get tax benefits.

Entrepreneurs can choose one of the two investment options to obtain a Golden Visa:

€500,000 + 5 new jobs
Investments in a new or existing business
10 new jobs
Opening a company in Portugal

To obtain a residence permit, the investor passes Due Diligence, receives a Portuguese tax number (NIF) and undertakes to provide certified financial statements regularly. Medical insurance with a one-year validity period is also required. It must cover all medical expenses, including emergency medical care and possible repatriation.

The most important thing is that an entrepreneur can participate in the government-approved program that provides a residence permit.

One can try to start a business in Portugal on their own, but their proposal may not be of interest to local authorities. Thus, the businessman will stand in line with hundreds of applicants, waiting for a “window” in quotas for residence permits.

Participation in the investment program is a real chance to get a residence permit in the European Union as quickly as possible.

Frequently asked questions

Is Portugal good for business?

Yes, Portugal is among the top 25 countries in terms of doing business. Portugal is in the top ten in the world in terms of ease of registering a company. The Portuguese system of quick registration on the Spot Firm allows you to create a company in just over an hour, filling out just one form.

How much to invest in a business to get a Portugal Golden Visa?

The Portugal Golden Visa Program offers four business investment options. They differ in conditions and minimum investment amount:

  1. Invest at least €500,000 to set up a company in Portugal with 5 jobs. The second option is to invest the same amount in an existing business to create or retain 5 jobs. 
  2. Create at least 10 new jobs. The investor opens a business and registers a head office in the country. When applying for a Golden Visa, they must provide documents confirming the fulfilment of the conditions. For example, employment contracts concluded between the investor’s company as an employer and citizens of Portugal.
  3. Buy shares of investment funds in the amount of €500,000. At least 60% of the investment of the selected fund must go to sponsor a Portuguese business. The maturity of shares at the time of purchase is from 5 years.   
  4. Transfer capital in the amount of at least €1.5 million to the country. For example, buying securities from Portuguese companies. It can be done personally or through a legal entity of which the investor is a shareholder.

In addition to business, you can invest in real estate, scientific research and projects to preserve the cultural heritage of Portugal.

What business to start in Portugal?

The tourism industry is the most popular among investors. It brings Portugal about 20% of its GDP, while the country receives more than 25 million tourists annually.

What tax benefits does a Portugal resident with a Golden Visa get?

A Golden Visa holder can become a Portuguese tax resident and benefit from preferential rates. To do this, the investor must reside in the country for at least 183 days in a row and formalise their tax status.

An investor with the “Non-Habitual Resident” tax status is entitled to pay taxes on business income at a flat rate of 20% for 10 years. Global income is not taxed.

The investor’s business is taxed under the country’s laws.

How to start a business in Portugal?

Choose a type of business and a Portuguese region. There are free economic zones in the Azores and Madeira. These are the most profitable regions for starting a business in Portugal in terms of taxation, benefits, import and export of goods, exemption from duties and free movement of capital.

What other options does the Portugal Golden Visa Program offer?

In addition to investing in a business, the Portugal Golden Visa Program allows you to invest in real estate, scientific research and the country’s culture.

Investment in real estate involves the purchase of residential or commercial properties in one of two ways:

  1. Acquisition of real estate for a total amount of €500,000. 
  2. Purchase of a building of cultural and historical significance for renovation, the minimum transaction amount is €350,000.

When buying property in an area with a low population density, the minimum investment is reduced by 20%. Thus, in the first case, it will be €400,000, and in the second — €280,000.

It is allowed to lease properties, and the sale is possible after 5 years of ownership.

Sponsoring research will cost the investor €500,000. Research activities must be carried out per Portugal’s scientific and technical program.

It is necessary to invest €250,000 in the objects of cultural heritage. It may be a purchase of art objects or support for restoration and renovation projects.

What business opportunities are there in Portugal?
  1. Government support.
  2. Possibility to obtain a residence permit under a simplified procedure and citizenship in 5 years.
  3. A precise and fast procedure for opening a company.
  4. Simple administration of the company.
  5. Withdrawal of capital to the zone of economic stability and hard currency.
  6. Doing business in a civilised and transparent environment, without corruption.
  7. Attractive taxation system and working tax incentives.
  8. Profitable industries, the ability to gain a foothold in the international market.
  9. Accommodation in a comfortable climate, some of the best beaches in the world.
What benefits does an investor get with a Portugal Golden Visa?

The investor benefits as a resident of an EU member state and as a participant in the Golden Visa Program. The list of the main opportunities includes:

  • travel within the Schengen Area without visas and stay in any EU country for up to 90 days in a row;
  • Portugal citizenship in 5 years if the investor remains a resident throughout the entire period and confirms the Portuguese language proficiency at the A2 level;
  • access to services of European banks. In addition, opening an account with a Portuguese bank is a prerequisite for participation in the Golden Visa Program. It is convenient for life and business: with the help of such an account, you can keep savings and simplify foreign exchange transactions;
  • access to a beneficial taxation system;
  • the period of mandatory stay in Portugal is 7 days a year;
  • a “safe haven” and the opportunity to move to Portugal, an EU country with a warm climate and a stable economy.
Can foreigners start a business in Portugal?

Yes, there is no restriction for foreigners to start a business in Portugal.

How much does it cost to start a business in Portugal?

It depends on company type and region. If you choose to open a business in Portugal under the Golden Visa Program, you will pay $500,000. Besides, investor will get residence permit in Portugal.

Which other EU countries grant residence permits for business investments?

Besides Portugal, several other EU states grant residence permits for business investments. The list includes Spain, Greece, and Cyprus.

Spain offers two business options:

  1. A purchase of shares in local companies for €1,000,000.
  2. Opening a company in the country. The Spanish Government must approve the project. 

The Greece Golden Visa is issued for purchasing shares in local companies for €400,000.

Cyprus permanent residence is granted to investors who buy shares of local companies for at least €300,000. The company must be profitable and have at least five employees. The owner of the company may be the applicant for permanent residence.

How do I register as a sole trader in Portugal?

There are a few document requirements to register a sole proprietorship in Portugal:

  • a Portuguese residency card;
  • a NIF — Número de Identificação Fiscal in Portuguese, assigned by the Portuguese Tax Office;
  • a Security Number, assigned by the Portuguese Social Security institution.
Is Portugal good for startups?

Yes, Startup Portugal provides several programs for companies and investors. It helps to design and implement public policies and private initiatives that react to the community and attract the best foreign talent, founders and investors.

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Business in Portugal: how to quickly open a company and get a residence permit?