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

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.

Business immigration to Europe: Portugal, Malta or Spain?

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.

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.

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.

How to open a business in Madeira

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.

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.

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.

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.

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.

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.

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.