Starting a Business in Portugal

An introduction to, and explanation of the necessary steps to starting a business in Portugal. Includes information on the different types of business structure and the legal process involved in setting up a Portuguese business.

The process of setting up a business in Portugal has recently been simplified, and in many cases may be done in a single day.

Note: Requirements for licences and registration vary for different types of business and across business sectors, so this page can only give an overview of the process.

Invest in Portugal is a useful English website which gives a step-by-step guide to setting up a business and lists the licences and approvals that are required

Who can set up a business in Portugal?

Both Portuguese nationals and foreigners may set up a business through the intermediary of a lawyer, solicitor or notary in the possession of a digital certificate.

There are no restrictions on foreigners setting up a company in Portugal, as long as they are legal residents and have the necessary work permits and minimum capital investment to do so.

They must have:

A Residency Card (Cartão de Residência) issued by the Portuguese Immigration Service or SEF (Serviços de Estrangeiros e Fronteiras)
A Tax Number (Numero Fiscal de Contribuinte), whether the process of starting up the business has begun or not, those intending to work need to be registered for tax purposes
A Social Security Number (Cartão de Segurança Social): register at the Social Security Office (Repartição de Segurança Social). All foreign nationals intending to stay in Portugal over 180 days and work have to pay social security

Types of company

There are four types of company that may be set up in Portugal. The first two of these are the most common.

Private limited liability companies (Sociedade por Quotas, LDA): require at least two partners, although there are Sociedade Unipessoal por Quotas, which have a single partner (either an individual or a collective entity). The corporate entity (and not the individual) is responsible for any company liabilities. There is a minimum capital investment of €5,000
Public limited companies (Sociedade Anónima SA Corporation): requires at least five shareholders, unless one of the shareholders is the State, in which case only two shareholders are needed. The corporate entity (and not the individual) is responsible for any company liabilities
Limited co-partnership companies (Sociedade em Comandita, SC): These businesses have two categories of partners: Dormant partners (Sócios Comanditárias) whose liability is limited to the amount of their shares and Full partners (Sócios Comanditados) who are liable for any company debts
General partnership companies (Sociedade em Nome Collectivo, SNC): partners will bear unlimited liability for any company debts

Steps to Starting a Business

Preliminaries

There are many organisations that can offer advice or help with starting a business. These include local Municipal Councils, local Citizen's Shops (Loja do Cidadão) and local employment services. Some towns and cities have what are known as Business Formality Centres (Centros de Formalidades das Empresas, CFE), designed to facilitate the setting up of businesses. CFEs can inform entrepreneurs about exactly what documents are necessary, can advise on the best company structure, explain the complete set-up procedure and provide contacts with appropriate government bodies.

CFE helpline - Tel: 808 213 213
CFE website (in Portuguese)

While not legally essential it is useful to employ the services of a Portuguese business broker (Despachante) to help deal with administrative procedure. It may also be necessary to get an accountant (Contabilista) and a lawyer (Advogado). A business bank account (Conta Bancária) is required with clear indications as to who can issue and sign cheques.

Choose a name for the company

Any proposed name can be checked against a computer database. If the name has not already been taken that name can be registered via a Validation Certificate (Certificado de Admissibilidade) issued by the National Registry of Companies (Registo Nacional de Pessoas Colectivas or RNPC).

Setting up the company

Below is an outline of the basic steps necessary to set up a company:

Apply for a Validation Certificate (Certificado de Admissibilidade) and for a Provisional Company Identity Card (Cartão Provisorio de Pessoa Collectiva) from the Registo Nacional de Pessoas Colectivas, RNPC
Sign the deed of incorporation at a notary
Apply for a Start of Activity Declaration (Declaração de Início de Actividade para Efeitos Fiscais) at the Tax Office (Direcção-Geral dos Impostos - DGCI). This must be done within 90 days of the Provisional Company Identity Card being issued
Apply for registration of the company at the local Commercial Registry (Conservatórias do Registo Comercial), the registry will then organise the company's publication in the Portuguese Official Journal (Diário da República).
Register at the local Social Security regional centre
Register with the Commercial or Industrial Records Office (Cadastro Comercial or Industrial) at the Directorate-General of Enterprise (DGE) or the local regional office of the Ministry of Economy within 30 days

A person or collective, either national or foreign or a mixture of the two can create a business online or at any one of a number of One-Stop-Shops (Centros de Formalidades das Empresas) (Company Formalities Centres) or Conservatórias do Registo Comercial (Commercial Registries) in Lisbon and throughout the country in just one day.

Online company registration

The special online regime allows the creation of a company through the Internet and can be used both by individuals or collectives with an appropriate electronic certificate.

It will be necessary to have a Digital Certificate. This is a digital identification document, rather like the new digital passports and identity cards. It means that each of the partners (sócios) and solicitors involved can present their credentials in a digital format including a digital signature in order to prove their identities.

The online company incorporation is made through the Empresa Online website.
The National Registry of Companies (RNPC) is responsible for the process, regardless of where the company's head office is located.

Within this special regime applicants may choose a pre-approved and registered company by electronic means only or by sending a Certificate of Admissibility (Certificado de Admissibilidade) previously obtained from the RNPC by non-electronic means.

Company registration is immediate if the applicants choose one of the pre-approved social pacts or deeds of incorporation. If the applicants decide to submit their own social pacts and deeds of incorporation registration takes two days.

Create a Company in an Hour

Commercial and civil limited companies (unipersonal, anonymous, quotas, co-partnership) may use the Government's Create a Company in an Hour (Empresa na Hora) scheme.

This is done through the RNPC at any branch of a Centro de Formalidades das Empresas (CFE) or Conservatória de Registo Comercial. Ideally, all the partners should be present, with all their legal representatives and personal and collective documents.

The CFE will take all the necessary information and inform the Employment & Social Security Office (Inspecção-Geral do Trabalho & Segurança Social), the Tax Authorities (Direcção-Geral das Finanças) and the Commercial or Industrial Records Office (Cadastro Comercial or Industrial). There are representatives from all these departments in the CFE offices and they have all the necessary forms.

A fee is charged, plus 0.4 percent stamp duty (Imposto de Selo).

To find a local CFE office: Click here

Company Deeds

Note: In many cases company partners no longer have to obtain in advance a Certificate of Company Admissibility from the Registry of Companies (RNPC) or sign public deeds (Escrituras).

The Deeds of Incorporation or Association (Escritura Publica) can be signed in the presence of a notary (Notário). A copy of the company's articles of association and contract (Pacto Social e Certidão do Registo Comercial) can be submitted for evaluation and archiving.

If there are deeds they should include the following information:

Identification of the partners/shareholders
Name and type of company (Limitada, etc)
Activities of the company
Head office of the company
Share capital of the company
Each shareholder's/partner's capital share in the company
All assets that form the share capital in kind and cash

Once the company deeds are signed and all other procedures have been carried out (tax and social security), the deeds are sent to the local Conservatória do Registo Comercial in the area where the business is located. It is their responsibility to ensure the final registration of the company with the RNPC and its publication in the Diário da Republica.

After Registration

Inform the IDICT (Supervisory Entity for Working Matters) about the number of employees and managers at the company and the places where they work and timetable of working hours
The company must get two sets of company account ledgers: an inventory and balance book (Inventário/Balanço) and a diary/ledger book (Díario/Razão)
Register the Shareholders Meeting Book (Company Minutes) at the Conservatória do Registo Comercial in order to get a document called a Termo de Abertura e Encerramento (Opening and Closing statements)
Take out compulsory employees' accident insurance at a private insurer. This covers all salaried workers and managers