Setting up a Business in Portugal as a Foreign Resident

Setting up a business in Portugal as a foreign resident? It’s not as difficult as you might think. However, as it is a foreign country, it’s important to do your research and speak with an expert first so that you can maximise your profits and minimise your taxes! Here’s everything you need to know about establishing a successful business in Portugal, including the legal requirements and information on visas.

How do I legally start a business in Portugal?

While it is admittedly much easier to start a business in Portugal as an EU-resident, those from outside the EU still can if they have the correct work visas and residence permits. The additional legal requirements that allow you to trade as self-employed dictate that you must have:

• a Portuguese residency card
• a tax number from the Portuguese Tax Office
• a social security number from Portuguese Social Security (Segurança Social)

How do I go about setting up my business?

There are three ways you can set up your business – please note that it is illegal to start trading before you obtain your official status! You should also check locally whether you need a license or any other official documentation to trade in the area.

Traditional Method

The Criacao da Empresa method takes around 15 days and to register your business this way you will need to:

• apply for a Certificate of Admissibility to recognise your company’s name, a Company Card and a Collective Card with the Institute of Registries and Notaries (IRN)
• open a business bank account
• deposit initial capital into the account
• declare with your Local Tax Office that you have begun activity
• register at a Commercial Registry Office
• register as an employer at a Social Security Office

Simplified Methods

• The Empresa Online method (1-2 days) can be done via the Portal de Empresa website for a fee of €360.
• The Empresa de Hora method (on the spot) takes just one hour to set up a limited company or a sole trader and also costs €360. If you choose to use this method, please ensure that all partners and legal representatives are in attendance and that you bring all the legal documentation.

If you are unsure of how to go about setting up and registering your business, please get in touch for a conversation with one of our team!

Opening a branch of a foreign company in Portugal

If you wish to simply open a subsidiary or branch in Portugal, all you need to do is register the company’s name with the IRN and the company at the Commercial Registry Office. To do so, you will need the parent company’s incorporation documents, confirmation from their board of directors of the opening of the branch and a power of attorney.

Visa, Immigration and Tax Requirements

Non-EU residents require a work visa and a residence permit to open up a business in Portugal. One way to do this is through the Golden Visa scheme which is definitely something to consider if you are planning on investing in Portugal. For more information on starting a new life in Portugal, have a look at one of latest blog articles on moving to Portugal after Brexit.

In terms of taxes, your income will be considered Category B if you are a business or a self-employed worker; it is also a requirement for the self-employed to complete an annual tax return. For more information on taxes and finances, check out the website of our sister company, RHJ Accountants. You can also phone us our UK office on +0114 227 0070. 

The best way to ensure a smooth start to your business in Portugal is to have a lawyer to help you. They will be able to identify any available tax breaks; here at RHJ Law, we aim to find you the perfect lawyer for your specific needs, whether it be business, visa or family related. Contact us today to find out more!