Home > Starting a Business in Portugal as a Foreigner
Published at 17 November 2023
While previously, Portugal has long been known for holidays in the sun, it has now emerged as one of Europe's top destinations to start a business as an expat.
But why Portugal? Why not any other European country? Well, let's break it down.
Portugal, with its rich history of explorers and traders, has always been a melting pot of innovation and commerce. Today, this legacy continues, with the country offering a diverse and dynamic business ecosystem that beckons entrepreneurs from every corner of the globe.
While Portugal's charm lies in its traditional industries like cork production, wine-making, and textiles, the nation is rapidly evolving. Here's a glimpse of the sectors that are catching the eye of foreign entrepreneurs:
Navigating a new business landscape can be daunting, but you're not alone! Portugal's local chambers of commerce and various business associations play a pivotal role in guiding foreign entrepreneurs. They offer:
Starting a business in Portugal is an exhilarating journey, and one of the first crossroads you'll encounter is selecting the appropriate business structure. This choice will influence everything from your tax obligations to your personal liability, so it's crucial to get it right.
Portugal offers a range of business structures, each tailored to different needs:
For most foreigners starting out in Portugal, the LDA often emerges as a favourite due to its flexibility, limited liability, and relatively simple setup process. However, your unique circumstances, business goals, and risk appetite will play a significant role in this decision.
Starting a business in Portugal can be an exciting and rewarding experience, but it's important to navigate the registration process with precision. As a foreigner, there are some additional considerations to keep in mind. Here's a step-by-step guide to ensure you're on the right track:
Starting a business in Portugal can be a rewarding experience, but it's important to navigate the registration process with precision. Here's a step-by-step guide to ensure you're on the right track, using only official government links:
1. Make sure you can legally start a business in Portugal: Ensure you meet the legal requirements, including having a Portuguese residency card, a tax number from the Portuguese tax office, and a social security number. If you are a non-EU/EFTA national, you'll need to obtain a Portuguese visa and residency permit.
2. Choose a name for your company: Select a unique name for your business in accordance with Portuguese regulations.
3. Reserve your company name: Before registering your business, you may reserve a unique company name with the Portuguese Commercial Registry.
4. Obtain a fiscal number: You'll need a fiscal number, or NIF to conduct any financial activities in Portugal. Visit a local tax office or use online platforms to obtain it.
5. Open a bank account: Establish a business account to manage your company's finances.
6. Draft and notarize articles of association: Depending on your business structure, you'll need to draft and notarize the articles of association, outlining the company's objectives and share distribution.
7. Register with the Commercial Registry: Head to the Commercial Registry (Registo Comercial) to officially register your business once all your documents are in order.
8. Obtain necessary licenses and permits: Depending on your industry, you might require specific licenses or permits. Ensure compliance to avoid legal issues.
9. Register for social security and VAT: Ensure you're registered for Social Security and VAT (IVA in Portuguese) if applicable, as it is crucial for tax compliance.
1. Legal Representation: If you're not residing in Portugal, you might need to appoint a legal representative to act on your behalf during the registration process. Source
2. Documentation: Ensure all foreign documents are translated into Portuguese and notarized. Some might also require an apostille stamp for validation.
3. Stay Updated: Regulations can change, so ensure you're always updated on any changes that might affect your business.
It's worth noting that Portugal's business-friendly environment and the thriving expat community offer ample support. Take each step with care, and soon enough, you'll be part of Portugal's vibrant business landscape.
Navigating the financial landscape of a new country can be a maze, especially when you're setting up a business. But fear not! Portugal offers a robust banking system and a transparent tax structure that, once understood, can be a boon for your entrepreneurial journey. Let's dive into the essentials:
Having a dedicated business bank account is not just a recommendation—it's a necessity. It ensures clear financial records, simplifies tax filings, and offers a professional front when dealing with clients or suppliers.
Portugal's tax system is comprehensive, but with a bit of understanding, it's manageable:
In the realm of finance, knowledge is power. By understanding the banking and tax essentials in Portugal, you're setting a strong financial foundation for your business. And remember, when in doubt, seek local expertise. Portugal's welcoming business community is always ready to lend a hand.
Starting a business in Portugal can be challenging, but the country offers loads of resources designed to support, nurture, and propel your business forward. Here are some of the resources you can tap into:
Portugal's government recognizes the value of startups and foreign investment. As a result, there are several programs and incentives in place:
Building connections is crucial, especially when you're new to a country. Portugal offers a vibrant scene for networking:
Remember, by leveraging the resources Portugal offers and immersing yourself in the local entrepreneurial community, you're positioning your business for success.
Starting a business in Portugal as a foreigner is an exhilarating journey, filled with opportunities and the promise of new horizons. However, like any entrepreneurial endeavour, it comes with its set of challenges. But fear not! With the right approach and resources, these hurdles can be transformed into stepping stones. Let's delve into some common challenges faced by expat entrepreneurs in Portugal and arm you with strategies to tackle them head-on.
Challenge: Portugal, like many countries, has its share of red tape. From business registration to obtaining licenses, the administrative process can seem daunting, especially if you're unfamiliar with the local system.
Challenge: While many Portuguese professionals speak English, official documents and some business interactions might be in Portuguese.
Challenge: Every country has its unique business culture. Understanding and adapting to Portuguese business etiquette is crucial for successful collaborations and partnerships.
Challenge: As a newcomer, building a local business network can be challenging.
Challenge: The Portuguese market, with its unique demographics and consumer preferences, might differ from what you're accustomed to.
While challenges are an inevitable part of the entrepreneurial journey, they're not insurmountable. With the right mindset, resources, and support, you can navigate the Portuguese business landscape with confidence and flair. Remember, every challenge is an opportunity in disguise, waiting for the bold entrepreneur to seize it!
Portugal, with its sun-kissed beaches, rich history, and vibrant culture, is not just a dream destination for tourists but also a land brimming with business opportunities. The nation's steady economic growth, coupled with a supportive entrepreneurial ecosystem, makes it a beacon for foreign entrepreneurs looking to make their mark.
No, you don't need to be a resident to start a business in Portugal. However, non-residents might have additional requirements or paperwork, so it's essential to consult with a local expert or legal advisor.
While Portuguese is the official language, English is widely spoken, especially in business circles and among the younger population. However, official documents and contracts are typically in Portuguese, so it might be helpful to have a translator or understand basic Portuguese.
Portugal has a thriving tech startup scene, especially in cities like Lisbon and Porto. Other sectors like tourism, real estate, and agriculture also offer ample opportunities for foreign entrepreneurs.
Portugal boasts a skilled and educated workforce. With numerous universities and technical institutes, finding local talent, especially in the tech and service sectors, is relatively straightforward.
Compared to other Western European countries, Portugal offers a lower cost of living and competitive business operational costs. This affordability is one of the reasons why many foreign entrepreneurs find Portugal attractive.
Yes, Portugal offers several tax incentives and benefits, especially for startups and SMEs. It's advisable to consult with a local tax expert to understand the specific benefits you might be eligible for.
Portugal has a long history of trade and exploration, making the Portuguese generally open-minded and welcoming to foreigners. The growing expat community and the success stories of foreign entrepreneurs further foster a positive environment for international businesses.
Business risks are a part of the entrepreneurial journey, irrespective of the location. Portugal offers a supportive environment, and even if a venture doesn't succeed, the experience and learnings can be invaluable. Moreover, the country provides mechanisms for businesses to pivot, restructure, or even wind down if necessary.