Launching your business in Portugal: Steps, benefits and tips for success as an international entrepreneur

Do you dream of soaking up the sun and warm colors of Portugal while creating your business? You are in the right place. Opening a business in Portugal can be a great idea if you know how to navigate the complex Portuguese business landscape. Discover the advantages, the steps to follow and the conditions to meet to open a business in Portugal with our complete guide for foreign entrepreneurs.

Portugal is a vibrant country with a mild Mediterranean climate and magnificent beaches overlooking the Atlantic coast. Since the pandemic, many entrepreneurs have decided to set up their businesses in places that offer them a sunnier climate.

Thousands of new businesses are born in Portugal every year thanks to improving economic conditions and the growth of real estate and tourism.

Foreign entrepreneurs can benefit from attractive tax advantages by setting up a business in Portugal. Companies are exempt from taxes on dividends and capital gains for 10 years, allowing foreign investors to make significant profits without being taxed.

Additionally, the Portuguese tax system offers additional benefits to small and medium-sized businesses, such as tax exemptions for certain activities or sectors.

Portugal is considered a safe country for invest, because it offers political and economic stability. The Portuguese government actively encourages foreign investment by putting in place measures to make it easier to start a business in Portugal.

There are also specialized agencies that support foreign entrepreneurs throughout the process of creating their business.

The Portuguese market is very diverse and includes sectors such as agriculture, industry, commerce, financial services, tourism and real estate. These sectors have experienced rapid growth in recent years, making Portugal particularly attractive to foreign investors.

Investment promotion agencies

Many specialized agencies offer services to promote foreign investment in Portugal. They provide foreign entrepreneurs with information on the administrative procedures to follow to create a business in Portugal, as well as on the aid available to finance the project.

Job creation and support for the local population

Foreign companies setting up in Portugal help create jobs and support the local population. Foreign entrepreneurs can benefit from additional tax benefits if their business is able to create jobs for Portuguese residents.

Legal Conditions and Formalities to Take into Account

Foreign nationals should find out about the conditions for setting up a business in Portugal. It is important to understand the necessary formalities, as well as the documents required for registration and obtaining a specific activity permit.

Minimum capital deposit and company name

Any Portuguese company must have a minimum capital of €5,000 to be registered. The capital can be paid by one or more shareholders, but it must be deposited before the company is registered.

In addition, the name chosen for the company must be unique and not infringe the rights of third parties.

Documents required for registration

To register a company in Portugal, it is necessary to provide a series of documents such as a certified copy of the shareholders’ birth certificate, a certified copy of the shareholders’ passport, an extract from the company register and a document attesting that the minimum capital has been paid.

Obtaining a specific activity permit

Once registration has been completed, you must obtain a specific activity permit to carry out your commercial activity in Portugal. This permit is issued by the Ministry of Commerce and can take up to 3 months to obtain.

Taxation and social obligations

Once the permit has been obtained, you must pay the taxes applicable to your commercial activity in Portugal. Companies must also respect certain social obligations such as paying social security contributions and respecting labor laws.

Schedule and deadlines for opening offices

The time required to open offices varies depending on the type of business and industry. It is important to plan in advance the steps necessary to open the offices, in order to meet the deadlines.

Steps to Open a Business in Portugal

Once all the legal and formal requirements are met, it is time to move on to the practical steps to open a business in Portugal. These steps include market research, finding partners, reserving an office and recruiting staff, as well as obtaining licenses and registering the company.

Market research and partner search

Before starting a business in Portugal, it is important to carry out an in-depth study of the Portuguese market and the opportunities available to foreign entrepreneurs. It is also advisable to find local partners to facilitate the process and receive additional support.

Reservation of an office and recruitment of staff

Once you have found suitable premises for your business activity, you can start recruiting qualified staff for your business. It is important to take into account Portuguese labor laws and social obligations related to recruitment.

Obtaining licenses and registering the company

After finding premises and recruiting qualified staff, you can proceed to the official registration of your business in Portugal. You will need to provide all documents required by the Ministry of Commerce to obtain your specific activity permit.

Monitoring tax and social declarations

Once your business is registered, you will need to carefully follow all tax and social declarations applicable to your business activity in Portugal. Companies must also pay taxes applicable to their activity.