A business owner who wants to create a new venture can choose Portugal as the location for their establishment because of the various benefits that Portuguese has to offer. Moreover, the process of business registration is fast and straightforward. The Portuguese government offers financial assistance to organizations so they can launch their business and flourish. Moreover, if you register a company in Portugal, you would have access to thousands of highly trained personnel. With Portugal company registration, you can access the marketplace of the EU.
This article will briefly cover the Portugal company registration process. Along with that, it will also list the various business entities, and documents required to do company registration in Portugal.
Reason to Register a Company in Portugal
- The most affordable for forming a firm and maintaining it in the European Union.
- Portugal was one of the top 25 business-friendly nations.
- Portugal has a desirable tax structure for companies as well as for work.
- Since most people are educated, it is simple to find qualified employees.
- 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.
Read our blog to know the various reasons to start a business in Portugal.
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 for your business
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 of the firm
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 that will be used in 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 minimum share capital required to register a company 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. Register with the National Registry of Collective Entities
Upon acquiring all the essential documents, 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.
Eligibility Criteria for Portugal Company Registration
- Number of stockholders: 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 formed with one director who may belong to any country.
- 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
Types of business entities for company registration in Portugal
The following are the various types of entities for Portugal company registration:
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 formed 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.
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.
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.
General Partnership
A general partnership has two members who 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 is no minimum share capital requirement for this kind of firm.
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.
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
The first year’s establishment fees are euro 5950, while subsequent years’ annual business charges are euro 600. The typical cost to start a Portuguese business is EUR 15,200, which covers all government expenses, business establishment, and establishing a native business bank account.
Conclusion
The following article briefly discusses how you can register a company in Portugal. If you want to do company registration in Portugal, you can consult our experts at OnDemand International. Our experts will help you acquire the necessary paperwork to do the Portugal company registration and will further guide you through the procedure to register a company in Portugal.
FAQ’s
- Portugal provides easy access to the markets of the European Union.
- Portugal’s market is stable.
- The process 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 form a Sociedade por Quotas (LDA) in Portugal, the following requirements must be met:
- 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.
- 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)
