Rugged cliffs and picturesque seaside towns are just a fraction of the things beautiful Portugal has to offer to foreign investors. Apart from the booming tourism sector, Portugal has a thriving service-based economy and recent growth within the automotive, information, biotechnology, and renewable energy industries.
In fact, working in commerce and agriculture-related industries may also make you eligible for tax relief.
With its favorable climate, both geographical and business, investing in Portugal is both attractive and easy. Moreover, the land is conveniently linked to mainland EU as well as overseas markets via an extensive network of flights, roads, and railroads.
Portugal offers one of the lowest company operation costs in Europe and well as an incentive package for foreign investors. The country’s membership in the EU is also noteworthy since it opens up new markets for you to tap into.
With favorable tax incentives, a strategic location, proximity to lucrative markets, minimal legal requirements, and a simple process, Portugal is the destination of choice for many foreign investors.
Forms Of Companies in Portugal
- Lda. “Limitada”—limited liability company
- S.A “Sociedade Anónima”— public limited company
- CRL “Cooperativa de Responsabilidade Limitada“—limited liability cooperative
- SGPS “Sociedade Gestora de Participações Sociais”—holding cooperation
What is the difference between Lda. and SA companies in Portugal?
In Portugal, most foreign investors opt for one of the limited company types.
Most entrepreneurs choose to establish an Lda. in Portugal as the minimum capital deposit required by the government is only EUR 2.
A Portuguese SA corporation may trade at the Public Exchange Market and offers a minimum share of EUR 50 000.
Fundamentals Of A Limited Liability Company
Corporate Tax in Portugal
VAT in Portugal
Fundamentals of limited liability companies in Portugal
|Limited liability company||Sociedade Por Quotas (LDA)|
|Minimum Share capital||1 EUR each Shareholder(1200 EUR)|
|Registered office required||Yes|
|Physical office required||No|
|Min. number of Shareholders||1|
|Min. number of Directors||1|
|Local Director required||No|
|Bank signatory must travel||Yes|
|Timescale for company formation||5 days|
|Timescale for bank account opening||7 day|
|Timescale for obtaining VAT number||14 days|
|Statutory audit requirements||No, if income is below 3M|
|Shelf companies available||No|
How can I set up my company in Portugal?
Establishing a business outside your jurisdiction can be intimidating, but CompyCo is dedicated to making the process easier for you.
These are the steps:
First, we will collect due diligence documentation and ask you for 3 names for the company.
Once the name has been approved, we will draft the Articles of Association;
Setting up a business bank account requires a 1-day visit from the directors in most of the cases.
Procedures with the Portuguese authorities include registering the foreign Shareholder/s and Directors with the Tax Agency and obtaining their personal Portuguese Tax ID (Número de Identificação Fiscal or NIF).
Register for VAT and other social contributions.
For some business activities, obtaining business license is needed and this is the final step.
The process of your company’s registration can be done online as well; in this case, it takes only 5 days to form a company. CompyCo will advise clients to opt for this option in cases where they fulfil requirements.
For many foreign investors looking to break into European markets, Portugal offers the most viable opportunity. The country has stable political conditions and a number of international businesses, making it the perfect country to tap into.
CompyCo is committed to providing cost-effective, custom solutions that are tailor-made to all your business’s needs. Having helped businesses set up in Portugal over the years, we offer you the unique advantage of leveraging our network of experts.
Our network of professionals in the banking, taxation, incorporation, and HR sectors can guide you toward the best decisions for your business and help you enjoy the maximum benefits at minimal costs. From assisting you in selecting aa company form that suits your business activities to obtaining licensing and hiring employees, our full-service solutions ensure you have all the time and freedom to focus on your business’s operations while we handle the logistics.
Bank Account Opening
Portugal boasts of some of the most modern banking systems in the world, with a combination of private and public national banks, as well as international banks. For a business owner setting up outside your jurisdiction, it’s essential to meet this requirement for registering your company.
Opening one in the country where you’re setting up your company will lead to long-term efficiency and convenience for you.
Every bank has its own set of requirements, which may range from the type of business activity you’ll engage in to your country of residence. However, there are certain requirements that are usually common among all financial institutions; these are:
- Proof of business address for your company
- Any identifying documentation, which may include your passport or national identity card
- Your Portuguese NIF number
In some circumstances, you could open your bank account remotely, but you’ll have to consult our experts in Portugal to find out more about that before you go ahead.
Need more information about opening a bank account? Head over here.
Accounting & Taxation
Here are a few accounting and taxation obligations to take into consideration:
- The tax year is the calendar year in Portugal
- taxable profits are trading profits, investments and selling assets for more than their original cost
- All businesses must keep accounting books
- The corporate income tax is levied at 21%. Local tax of 1.5% (Derrama) is applicable in some cases
- In Portugal, the current VAT rate is 23% on most goods and services. Exceptions apply
Portuguese companies are issued VAT numbers with the format of the country code PT followed by a 9-digit number which ends with a letter
How can you employ staff in Portugal?
If you’re setting up your company outside your jurisdiction, especially when you don’t speak the language there, it can be difficult to hire the right people. Employment laws and regulations may vary among places and it’s essential to work with an expert who specializes in the field.
CompyCo can cater to all your recruitment and HR-service needs by offering unique, tailor-made solutions for your business. Working with our network of HR professionals in Portugal and our experienced team, we deal with employment agreements, recruiting new talent, onboarding new hires, ensuring your business is compliant with local regulations, and offering ongoing payroll services.
Non-resident employers often struggle to figure out how to register their company to employ a Portuguese employee, but CompyCo’s here to make that easier for you. If you only need to employ a person in Portugal to work from home, we can even help you avoid local company registration as an employer.
With a skilled, low-cost workforce available to you in Portugal, we ensure you make the most of cost-effective recruiting and HR solutions.
Have any questions? Take a look at our HR services page for more information about our International HR services!