Portugal Company Registration in 2023-24
Portugal, one of the richest nations at the period of its colonization rule in Asia and Africa with multi-dimensional industrial deliverance with steady growth and advancement in the technology with regular association and support from the European Union invites the global industries to set up their operations in the economy and attain the benefits and the resources that it has to offer.
Portugal is primarily known for its large amount of contribution in the food and beverages and many other products and services.
There has been a rapid growth in the overall contribution by the tourism sector and travel industry. Though a major contribution by the European Union and the International Monetary Fund have helped this nation to stay afloat in the year 2011 from where the country has started showing a steady sustainable growth both in the economy and international trade.
The country on a regular basis has been inviting not only businesses but also working class immigrants from across the world which means there is a good base to set up an international unit with cheap and affordable manpower.
Reason to register a company in Portugal
- The most affordable way to form a firm and maintain it in the European Union.
- Portugal is one of the top business-friendly nations.
- Portugal has a desirable tax structure for companies as well as for work.
- Due to an inviting immigration policy manpower is available for a cheaper price
- Portugal has the most affordable living expenses in Western Europe.
- The most prevalent sector, tourism, accounts for 20% of the country’s GDP.
- In Portugal, there are free-trade areas.
- The Portuguese government has programs to assist various enterprises, both established ones, and new ventures.
Procedure for Portugal Company Registration
In order to register a company in Portugal, the following steps must be followed:
1. Select the type of business structure
The first step involved in company registration in Portugal is to select the type of business structure that you wish to establish in Portugal.
2. Select and reserve the name
Once you have decided on the type of company you wish to incorporate in Portugal, it is essential to select a name for the company. The selected name must be verified and reserved at the Portuguese Trade Register. This is done to ensure that the selected name is original and available, and not already being used by any other companies.
3. Develop the Article of Association
Before incorporating the firm, it is essential to draft an Article of Association of the firm. The Article of Association is used to define the duties and operations of the firm. Along with that, the corporation’s name, capital, and connections are also defined in the Article of Association.
4. Gather the essential documents
In order to register a company in Portugal, it is essential to gather all the essential documents which will be used for company registration in Portugal.
5. Create a business bank account
In order to do a Portugal company registration, you must create a business bank account. The amount of share capital required to register a corporation in Portugal is deposited in the corporate bank account.
6. Apply for licenses
To register a company in Portugal, you must acquire various licenses and permissions to conduct business operations in the nation.
7. Acquire the tax number
You need to acquire the Portugal Tax Number(NIF) and the tax identification number. The NIF number is a 9-digit number that is granted by the tax authorities of the nation.
8. Enroll with the National Registry of Collective Entities
Upon acquiring all the essential paperwork, Portugal Company Registration must be submitted to the National Registry of Collective Entities. Once every document has been verified and approved, an incorporation certificate will be granted to register a company in Portugal.
9. Recruit an accountant
You should employ an accountant to manage banking and business operations and to legitimately disclose taxes and social security.
Eligibility criteria for Portugal Company Registration
Number of shareholders
In order to do a Private Limited Company registration in Portugal, a minimum of one stockholder is required. As for a Public Limited Company, a minimum of 5 stockholders is necessary.
Number of directors
A private limited company can be established with a single director from any nation.
Minimum share capital
A minimum of EUR 5,000 is required to establish an LDA. A minimum share capital of at least €50,000 is necessary to establish a Public Limited Company.
Documents required for Portugal Company Registration
Company registration in Portugal can be done using the following documents:
- Name and operation of the business
- Shareholder’s and directors’ information
- Article of Association of the firm
- Proof of share capital deposit
- Incorporation documents
- Details of the registered office address
- Other essential documents
Various business entities for Portugal company registration
The following are the various types of entities for company registration in Portugal:
1. Private Limited Company
A Private Limited Company is also called Sociedade por Quotas (LDA). It is the most common company structure for locals or international entrepreneurs looking to conduct operations in Portugal. Although a Private Limited Company must normally have two partners, however, it can also be incorporated with just one quota holder. A private limited company can be established with 100% foreign ownership by non-residents. A minimum of one director and one stockholder is required to establish an LDA. A minimum of EUR 5,000 is required to establish an LDA. A minimum of one euro should be allocated toward every “quota” in the share capital.
2. Public Limited Company
Public Limited Company is also known as Sociedade Anomina (SA). Stockholders are responsible for debts up to the worth of their shares. In order to do a Portugal company registration, a minimum of five stockholders are needed and at least one director is required to establish a SA. Additionally, a minimum share capital of at least €50,000 is necessary.
3. Limited Partnership
A limited partnership is formed with at least 2 partners. One of the members is a general partner and the other is a limited partner. The General Partner is entirely responsible for the corporation’s debts, whereas a limited partner has limited responsibility.
4. General Partnership
A general partnership has two members that have complete responsibility for the company. They are capable of managing the business and share equal responsibility for choices made on behalf of the company. There isn’t any minimum share capital requirement for this kind of firm.
5. Sole Proprietorship
A Sole Proprietorship is a business entity with just one owner, who is solely accountable for all debts and liabilities of the firm. A minimum amount of capital is not necessary for the sole proprietor to launch a firm.
6. Individual Limited Liability Establishment (E.I.R.L.)
7. Branch Office
A branch office can be incorporated by foreign corporations that intends to do business in Portugal under the same name as its headquarters. It is relatively easy to set up a branch office as there are no minimum capital needs. Branches are seen as expansions of an international firm rather than as independent legal entities, hence the parent business is responsible for the branch office’s debts.
Advantages of company registration in Portugal
- Portugal provides easy access to the markets of the European Union.
- The procedure of establishing a company in Portugal is simple and affordable.
- Businesses are able to prevent double taxes on their income by taking advantage of the double tax agreements that Portugal has struck with other nations.
- Free economic zones are among the most advantageous places to launch a business because of taxational advantages, perks, import and export of commodities, duty reductions, and free capital movements.
Taxation in Portugal
If you register a company in Portuguese, you need to know about the various taxes that must be paid in Portugal:
- Corporate tax: On the whole proportion of taxable income generated by businesses that are tax residents in Portugal, a fixed corporate tax rate of 21% is applied. Small and medium-sized businesses in Portugal are subject to a lower corporate tax rate of 17% on the initial €25,000 of taxable profits.
- Value Added Tax: Portugal has three different VAT rates: 23%, 13%, & 6%, depending on the nature of products and services that the consumers use.
- Social Security Tax: The Social Security Tax (TSU) is equivalent to 34.75% of the gross wage of the laborer. Corporations are charged 23.75% of TSU while employees contribute 11% of the same.
Duties of an accountant for company registration in Portugal
- An accountant produces the invoices and certification in accordance with industry requirements.
- Provide both corporate and individual income taxes annually to the concerned tax authorities.
- Reports social security contributions to the appropriate taxation authorities on a monthly basis.
- Submit a quarterly VAT statement to the taxation department.
Cost of company registration in Portugal
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The first year’s establishment fees are Euro 5950, while subsequent years’ annual business charges are Euro 600. The typical charge for Portuguese engagements is EUR 15,200, which covers all government expenses, business establishment, and establishing a native business bank account.
Conclusion
The following article and the briefs about the country clearly state why a business should be incorporated in the Republic of Portugal. With an abundance of both natural and man-made resources and ease of taxation in the country, Portugal stands out with all the demanded requirements from a business to have a stable outcome and to establish better ROI in the book of accounts.
Contact the professionals at Odint Consulting if you’d want assistance for forming a corporation in Portugal. Our experts in business creation have years of expertise assisting clients with setting up their businesses. With the help and proper guidance of our experts, you can smoothly complete the procedure of company registration in Portugal.
FAQ’s
- Portugal provides easy access to the markets of the European Union.
- Portugal’s market is stable.
- The procedure of establishing a company in Portugal is simple and affordable.
- Businesses are able to prevent double taxes on their income by taking advantage of the double tax agreements that Portugal has struck with other nations.
- Free economic zones are among the most advantageous places to launch a business because of taxational advantages, perks, import and export of commodities, duty reductions, and free capital movements.
- The Startup Portugal initiative allowed for a huge rise in the volume of investment made into the various enterprises that incorporate Portuguese.
In order to establish a Sociedade por Quotas (LDA) in Portugal, the following requirements must be met:
- At least a single director and one stockholder is required to establish an LDA.
- A minimum of EUR 5,000 is required to establish an LDA. A minimum of one euro should be allocated toward every “quota” in the share capital.
- A private limited company can be formed with 100% foreign ownership by non-residents.
You require a social security number, and a tax identification number (NIF) issued by the Portuguese tax office, in order to establish a company in Portugal. If you are a citizen of a country outside of the EU or EFTA, Portuguese visas and residence permits are required to launch a company.
The various taxes that businesses must pay in Portugal are:
- Corporate tax
- Value-Added Tax
- Social Security Tax
- Work Compensation Fund (FCT)
- Name and operation of the business
- Shareholder’s and directors’ information
- Article of Association of the firm
- Proof of share capital deposit
- Incorporation documents
- Details of the registered office address
- Startup visas: Startup visas are residence permits for businesspeople designed to draw capital, talent, and creativity to Portugal.
- Tech visa: Tech visa is a certified scheme created for businesses looking to hire highly skilled and specialized personnel in Portugal.
- Semente: Semente offers tax advantages to entrepreneurs who contribute money to early-stage enterprises.
