Starting a business in Portugal: a key trade gateway to Europe and the Americas

The limited liability company (LLC), also known as an Lda (limitada), is the more common entity type for small and medium-sized enterprises. An Lda can be established with a minimum of two shareholders (if not a sole shareholder Lda), with a minimum share capital of €1 per shareholder. Liability is limited to the amount of capital subscribed, and the company is a separate legal entity from its owners, with 100% foreign ownership permitted. Portuguese corporate income tax is charged at the entity level.

A joint-stock LLC, or SA, is typically used by larger businesses or companies planning to raise capital, bring in multiple investors or potentially list on a stock exchange. An SA has a minimum share capital of €50,000 and shareholders’ liability is limited to the shares they have. There must typically be a minimum of five shareholders, and the company has more formal governance requirements than an LLC, including, in some cases, the need for a board of directors and a supervisory body. As with an Lda, an SA can be fully foreign-owned and is subject to corporate income tax.

An SGPS is a specialised sub-type of corporate entity designed to own and manage shareholdings in other companies. SGPS entities can be structured as an Lda or SA. Depending on the structure and the applicable legal and tax framework, an SGPS may offer group structuring and governance advantages, and may benefit from specific tax treatments in relation to dividend income and capital gains. This type of entity is commonly used for corporate structuring and risk management.

A branch office in Portugal is an extension of a foreign parent company rather than a separate legal entity. It can carry out commercial, revenue-generating activities, with the parent company remaining fully liable for the branch’s obligations. Branches must appoint a local legal representative and be registered with the Portuguese Commercial Registry. For tax purposes, a branch is treated as a permanent establishment and is subject to Portuguese corporate tax on profits attributable to its activities in the country.

A representative office allows a foreign company to establish a presence in Portugal for non-commercial activities only. These typically include market research, promotional activities and acting as a liaison with the parent company. Because a representative office can’t generate revenue, it isn’t subject to corporate income tax. This structure is often used by companies assessing the Portuguese or wider EU market before committing to a full operational presence.

Setting up a business in Portugal involves a range of costs, which vary depending on several key factors. These include your chosen entity, specific business activity and the location you want to setup in.

After understanding your requirements, we can provide a transparent and detailed cost breakdown for your incorporation:

• Registration and licensing fees: Costs associated with company incorporation in Portugal with the relevant authorities, such as the Portuguese Commercial Registry. These include company registration and an approval of the company name.
• Other relevant taxes and fees: These typically include the value added tax (VAT) registration and a mandatory declaration on the Beneficial Owner Register.
• Capitalisation costs: Capitalisation for most entity types is nominal. However, an SA may require a minimum investment of at least €50,000.
• Visa costs: Costs associated witharranging employment visas for expatriate employees, such as the D1 Visa, D2 Visa, Startup Visa, Golden Visa or the EU Blue Card.
• Office space rental: Costs for leasing office space, which can vary depending on the location, size and quality of the premises, especially in areas such as the central business district in Lisbon.
• Professional fees: Costs for engaging professional services, such as legal counsel, business setup consultants and accounting services.
• Other potential costs: These may include translation costs, bank charges and other miscellaneous expenses.

At Hawksford, we follow a carefully structured step-by-step process to ensure a smooth, efficient and compliant business setup in Portugal, customised to your specific needs and objectives. Our expert team can guide you through each stage, minimising potential delays.

We begin with a thorough consultation to gain an in-depth understanding of your business objectives, operational requirements and long-term goals. This allows us to provide an informed assessment of suitable legal structures, locations and relevant incentive frameworks suitable for your business.

Based on the initial consultation, we can develop and provide a strategic setup plan for establishing your business. This includes advising on Portuguese company incorporation and registration, corporate structuring, getting a Portuguese tax identification number and any specific legal considerations relevant to your industry and activities.

Our team provides expert assistance with the preparation and processing of the required documentation, ensuring accuracy and compliance with Portuguese regulations. This includes drafting legal documents, completing application forms and getting necessary approvals from relevant government or local authorities.

We can manage the company name registration process, sector-specific licensing and investment notification, where relevant, liaising with the appropriate authorities to secure the necessary approvals and complete the required formalities.

We can assist with the application and processing of employment visas for you and your employees, managing the documentation and liaising with the relevant authorities.

We can help with the opening of a corporate bank account in Portugal, providing guidance on the required documentation and liaising with banks to facilitate a smooth and efficient process. Our work assisting companies with market entry and expansion has enabled us to establish trusted relationships with several leading banks.

Beyond incorporation, we can support the ongoing governance and statutory compliance of your Portugal entity. This may include maintaining corporate records and registers and helping you meet key filing deadlines, which can keep your entity in good standing as your local operations scale.

We can also support you with ongoing accounting and tax compliance, including corporate tax, VAT registration and filing, financial statement preparation and bookkeeping.

The overall timeline for setting up a business in Portugal can vary depending on a range of factors, as outlined below. We’re dedicated to supporting you through the setup process and providing realistic and well-defined timelines for each stage.

• Chosen legal structure: The choice of entity type can influence the timeline. However, differences are relatively minor with incorporation typically completed within a matter of weeks.
• Complexity of business activity: Business activities that require special approvals from specific government entities may take longer to process.
• Special economic zone requirements: Each economic zone, such as the Madeira International Business Centre (IBC), has its own specific requirements, which, while typically not onerous, can affect the overall timeline.
• Efficiency of document processing: The time it takes the relevant authorities to process documents can also play a role.

Our expertise and proactive approach can help streamline your business setup process. We provide expert guidance on the required steps and potential bottlenecks, enabling you to meet deadlines and prepare effectively. We can also work with you to ensure all documentation is accurate, complete and submitted correctly, minimising delays that can be caused by errors or omissions.

• Initial planning and document preparation: Typically 1 to 2 weeks
• Company registration and licensing: Generally between 2 and 4 weeks
• Visa processing: Usually takes 4 to 10 weeks
• Bank account opening: Typically around 4 weeks

Our experts can coordinate with you to meet these estimated timelines. Our team will maintain consistent communication throughout the registration process, keeping you informed at each stage.