Law Firm “First Legal Portugal” offers comprehensive services for registering a business in Portugal – from an introductory consultation to the actual registration of the company.
First Legal Portugal provides full support during the preparatory stage – helping with the choice of business form, obtaining a Portuguese tax number (NIF) for non-resident founders, helping to choose a name for the future company, an accountant, and obtaining a legal address.
After completing the company registration procedure, First Legal Portugal will help you open a bank account and obtain a NISS social security number for non-resident employees.
The most important thing in the process of registering a new business is choosing the form of activity
If there is only one founder of the business, the most popular options are to register as a private entrepreneur – Empresário em Nome Individual (ENI), Estabelecimento Individual de Responsabilidade Limitada (EIRL) or Sociedade por Quotas (Lda) Unipessoal.
Empresário em Nome Individual (ENI) - is the simplest form of company registration and business operation in Portugal for an individual entrepreneur. It does not require mandatory accounting, a legal address, authorized capital, or a business account. It is most convenient for small-scale personal entrepreneurship, self-employed individuals, and freelancers. The disadvantages of this form include the complexity of registration for non-residents and the absolute liability of the entrepreneur—all business debts are his debts.
Sociedade por Quotas (Lda) Unipessoal – the most popular form of company for a single owner. Limited liability company, minimum share capital requirement (from €1). The registration process is straightforward, but there are more mandatory requirements, such as keeping organized accounting records, having a manager (director), and having an account with a Portuguese bank. The disadvantages of this form are that a single owner cannot have more than one Unipessoal company, and the process of making changes to company data is more complicated and expensive, which forces owners to take the parameters of the enterprise more seriously at the stage of opening a company.
Estabelecimento Individual de Responsabilidade Limitada (EIRL) - is a sole proprietorship with limited liability, essentially a natural person with limited liability. The minimum authorized capital for this form is €5,000, which has significantly reduced the popularity of this form of company. Today, this form is rarely used.
The main differences from Lda Unipessoal are:
- The authorized capital of EIRL must be paid in full at the time of registration;
- Only a natural person can be the owner of an EIRL, while another company can also be the sole owner of an Lda Unipessoal;
- The owner of an EIRL pays social security contributions as a natural person entrepreneur (ENI), while the owner of an Lda Unipessoal pays social security contributions only if they are an employee or manager of the company.
If there are several founders, the company usually chooses the form of Sociedade por Quotas (Lda) – the easiest to manage and the most popular form for small and medium-sized businesses. A private limited liability company where liability is limited to the amount of each participant's contribution. In essence, it is the same form of company as Sociedade por Quotas (Lda) Unipessoal, but with more participants.
To start larger businesses, the form of a Sociedade Anónima (S.A.) company – a public joint-stock company – is usually considered. It is suitable for a large number of members, with a minimum capital of usually €50,000. As in Lda, the liability of members is limited to their contribution. The activities and reporting of Sociedade Anónima are usually more strictly regulated, with more rules and requirements.
Other, less popular forms of business include cooperatives, which are created to meet the economic/social needs of their members, Sociedade em Nome Colectivo (full partnership) — where all partners have unlimited liability, and Sociedade em Comandita — a mixed liability partnership, where only some partners have limited liability.
COMPANY REGISTRATION WITH A PREFERENTIAL TAX REGIME IN PORTUGAL (MADEIRA)
Along with the question of what type of company to register in Portugal, some non-resident founders also decide where to register. Most often, this is related to the owners' intentions to register a company in Madeira — a special economic zone that attracts with its low tax rates. However, unlike mainland Portugal, Madeira has more requirements and a more complex registration procedure.
Companies registered in Madeira can operate under two tax regimes: preferential and ordinary.
Companies operating under the standard tax regime are not required to meet any special conditions, as they do not enjoy any privileges. However, the standard income tax rate in Madeira is lower than on the mainland – 14.7% versus 21%.
Companies that register with the intention of operating under the preferential tax regime must meet one of two conditions: either create jobs for local residents or make an investment of at least €75,000.00.
WHAT NEEDS TO BE PREPARED BEFORE COMPANY REGISTRATION
An equally important step in preparing for registration is choosing an accountant.
While an ENI can be registered without an accountant, it is important for the company to provide the details of its future accountant before registration.
There are plenty of options when it comes to choosing an address – it can be a rented office, a legal address, or even the founder's home address. The main requirement is that the address must be able to receive correspondence.
The company name can be chosen from a free list of ready-made names or suggested from your own options. In this case, the first step in the registration process will be to check the uniqueness of the company name.
The company must have a manager (director). The director can be a hired person, or one of the founders can perform this function, even free of charge.
To register a company in Portugal, information about the future company's activities is also prepared – in a descriptive format and by selecting the appropriate activity codes from the current list.
Frequently asked questions (FAQ) about starting a business in Portugal:
1) Can I register a company in Portugal if I am abroad?
Yes, in this case, a lawyer can do it for you after receiving scanned copies of your documents.
2) Do I need to send any documents or a power of attorney by mail if I want to register a company remotely?
No, high-quality scanned copies of documents, which you can send us via email or WhatsApp, will suffice.
3) What documents are required to register a company?
If the founders are individuals, you will need a valid passport for each founder and their Portuguese tax number (NIF). If the founder is a legal entity, it will also need to provide a Portuguese tax number and documents confirming its existence from the country of registration, translated if necessary.
4) Can I register a company on the day of application?
In practice, this is quite difficult, especially if you are a foreigner and do not have a Portuguese tax number. In this case, you must first obtain a Portuguese tax number (NIF) and then begin the registration process. The speed of registration may depend on the method of submitting the registration application and the working hours of the registration authorities, so the actual time frame is from 1 day to several weeks.
5) What government fees are payable for registering a company? Will I have to pay them annually?
When registering a company, a fee of €220 is payable, or €440 in the case of urgent registration. If you want a pre-selected name for your company, there will also be a fee for checking the name for uniqueness, €75 per submission, or €150 for an expedited check. These fees are paid when registering the company and do not need to be paid annually. However, if you decide to make changes to the details of your existing company, a fee will be charged for making the changes.
6) Can my Portuguese company be serviced by an accountant from another country with whom I already work?
No, Portuguese companies are required to have a Portuguese accountant. Their details are specified at the registration stage.
7) Is it necessary to rent or buy office space to obtain a legal address?
No, it can be a rented virtual address, or even your personal address in Portugal. The main requirement is that the address must allow for the receipt of correspondence, as a lot of important information will be sent to the company's address by regular mail, and it is extremely important to be able to receive these items.
8) Is it necessary to open an account with a Portuguese bank?
It is not mandatory for company owners, but the company must have an account with a Portuguese bank, otherwise it will face a number of problems.
9) Which business form is better to choose?
The most popular business forms in Portugal are ENI (private entrepreneur/self-employed person) and LDA – the equivalent of a limited liability company. It is advisable to open an ENI if the activity does not involve significant costs and the company's turnover is small. LDA provides more opportunities for tax minimization, but involves higher payroll costs.
10) If I am the sole owner, can I register a company?
Yes, in this case, it is possible to register an LDA Unipessoal—a company with a single owner. However, it should be noted that such an owner cannot have more than one LDA Unipessoal company in Portugal.
11) Can I be both the owner and the manager/employee of the company?
Yes, this is possible. You can perform management functions on the basis of an employment contract, either free of charge or perform another function in the company, in accordance with your profession.
12) What taxes will the company pay?
The company pays income tax and VAT, but also pays social security contributions on the salaries of its employees.
13) I want to register a business in Portugal to obtain a D2 visa. Does it matter what type of business I register?
In general, it can be either an ENI or a company. However, it should be noted that there are currently difficulties in registering an ENI for non-residents, so this option is best considered by those who already have residency on other grounds.
14) If I want to obtain residency as a highly qualified professional, can I register a company and get a job there?
Yes, this is one of the options. In this case, an important factor will be your personal compliance with the qualification requirements—education, work experience, etc.