Portugal has been in the spotlight for startups, tech companies, and businesses in general for several years now. Today, we can confidently say that Portugal is becoming a popular destination for foreigners looking to start a company or grow a business. There are several logical reasons for this surge of interest from the business sector.
Why Set Up a Company in Portugal?
Strategic EU Location and Economic Stability
Portugal’s strategic location in the European Union is complemented by political and economic stability and strong support for entrepreneurs. The country promotes the development of SMEs and digitizes most registration stages, reducing bureaucracy and enabling you to register your company in Portugal with minimal effort. In 2023, the Startups Framework (Law no. 21/2023) introduced a number of business-friendly measures, including tax incentives.
Tax Incentives and Special Zones
The tax environment is favorable, with reduced taxes depending on the company’s size. Key benefits include:
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Exemption from income tax on stock options
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Lower corporate tax rates during the first years of a startup
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VAT exemption for real estate used in business activities
In addition, incentives may apply in regions such as the Madeira International Business Centre (IBC).
Registration Options: Fast and Flexible
Forget tedious paperwork and long procedures. There are three ways to register a company in Portugal, so there's something to suit everyone!
Online registration — efficient and remote; everything can be done from home via official portals.
Classical registration — requires a visit to public authorities. Ideal for those who prefer direct control or legal guidance.
Instant registration (Empresa na Hora) — one of the fastest options in Europe: you can open and register a company in Portugal right on the spot, and all the legal steps, tax issues, registration, and eventually obtaining a certificate will be completed within an hour.
Legal Forms of Business
Before registering a company, it’s important to choose the right legal form:
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LDA (Private Limited Company): Ideal for SMEs. Requires a minimum of one shareholder and low capital.
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S.A. (Public Limited Company): Requires five shareholders and a minimum capital of €50,000.
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Unipessoal LDA: Single-member version of LDA.
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Sole Proprietorship: Easiest structure, but full personal liability.
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Branch of a Foreign Company: No separate legal identity, no capital required, cost-efficient.
Step-by-Step Company Registration
1. Choosing and reserving a name — it must be unique and not used by any company registered in Portugal and approved by the registry.
2. Preparing the documentation — statutes, ID documents, and tax declarations. This process may be delayed depending on the availability and speed of the collection of the documents.
3. Obtaining a tax number (NIF/NIPC) — is required for each founder; without this number, it is impossible to set up a company in Portugal.
4. Opening a business bank account — mandatory to operate and deposit share capital.
5. Submitting to the registry and registering for VAT/social security.
6. Obtaining any required licences — depending on the sector.
All of these steps are essential for opening a company and establishing a solid foundation for future straightforward registration in Portugal. As you can see, there are a lot of mandatory steps, which may seem complicated at first. Therefore, it is important to trust professionals who can guide you smoothly through the entire process, resolve any issues quickly, and protect you and your business from potential delays.
Key Requirements
NIF/NIPC: Mandatory for registration, contracts, and taxes. This number is a prerequisite for company formation in Portugal, including opening bank accounts and signing contracts. The NIF/NIPC plays a key role in all matters relating to tax affairs and transactions within the Portuguese financial system, so it is useful to have one again here.
Local address: As in any other country, one of the essential elements of registering a company in Portugal is obtaining a local address. Needed for administrative and legal purposes.
NISS (Social Security Number): Assigned automatically after company registration.
Bank account: A bank account is an integral part of setting up a company in Portugal because it is the only way to conduct transactions, fulfill your tax obligations, and comply with the country's legal regulations. In order to open an account, you must first choose a trustworthy bank that meets your needs. To do this, you will need a registration certificate, proof of NIF, statutory documents, and identification documents for the founders. Depending on the bank, you may also be required to provide additional documents.
Articles of Association: It is essentially a handbook for your company — a key document that defines who you are and how you operate. It includes basic elements such as the company's name, type, founders' details, authorized capital, and company management procedure. This is the foundation of your future business success, so don't neglect this stage, and don't rely on luck. We advise you to consult professionals who can draft the necessary documents. Keep in mind that the Articles of Association are essential for the smooth and swift registration of your company and its long-term success in Portugal.
Costs: Setting up a company in Portugal requires you to raise a certain amount of money, which you also need to take into account. Of all the expenses, the crucial one is the registration fee, which ranges from €220–360. Costs vary depending on the chosen legal structure and level of support required.
Portugal Tax System & 2025 Reforms
After company formation, any business in Portugal must comply with tax obligations:
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VAT registration (IVA)
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Corporate income tax returns
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Quarterly and annual reporting
From 2025, new reforms include:
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Standard corporate income tax was reduced to 20%, with plans to reach 15% by 2027.
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SMEs are taxed at 16% on the first €50,000 of income.
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Madeira and Azores: effective tax rates as low as 8.75%.
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Deductions of up to 20% on capital contributions by shareholders.
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VAT relief on residential construction and rehabilitation.
IFICI+ (New Tax Regime Replacing NHR)
Portugal’s former Non-Habitual Resident (NHR) regime has been replaced by IFICI+, a new program to attract talent, startups, and foreign investment. Key benefits include:
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20% flat tax rate on employment and self-employment income.
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Exemption from Portuguese tax on most foreign-sourced income, including dividends and capital gains.
The regime is valid for up to 10 consecutive years
We advise you to hire trusted lawyers to help you open a company in Portugal. The professionals at Icon. Partners will guide you through every stage of the remote company formation process to ensure it is carried out properly. If you have any questions, please contact our team at my.office@icon.partners.
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