How to start a company in Portugal as a foreigner

When I moved to Portugal in 2021, I was already working as a freelancer, but over time, I realised that a company structure might suit me better. In 2024, I took the step and opened my company. However, I had many questions, and you may have some of the same if you want to start a business.

I worked with the lawyers from Fresh Portugal to streamline the process, and they have now assisted me in writing this guide. Starting a company in Portugal can be a great option for entrepreneurs, whether you’re local or a foreigner, but it’s important to know the pros and cons and determine the best business structure for your specific needs.

Anyone can open a business in Portugal, but there are specific requirements, steps, and regulations that must be followed to establish a successful business. I’ve met plenty of solopreneurs and people who set up an online business in Portugal since I moved, but this set-up is very different from starting a large company that will be hiring employees in Portugal.

This guide will provide lots of information on how to start a company in Portugal, including the company formation process, the entities that facilitate it, and the registration procedure with the Portuguese company registry. There will also be some information about opening a business bank account and insurance. 

What are the benefits of starting a business in Portugal?

Portugal has become an attractive destination for entrepreneurs, freelancers, and investors looking to start a business, whether you’re a local or relocating from abroad. Here’s why starting a business in Portugal is attractive:

• Access to EU benefits – As Portugal is part of the European Union, businesses registered here automatically enjoy access to the wider European market and benefit from European regulations that facilitate cross-border business. For example, Portugal adheres to EU tax rules, such as the Parent-Subsidiary Directive, which enables companies to avoid being taxed twice on the same profits when operating in multiple EU countries.
• Double Tax Treaties (DTTs) – Portugal has agreements with 78 countries, including the US, the UK, Canada, and most of the European countries, to prevent double taxation. That means if you live abroad or run an international business, you generally won’t pay tax on the same income twice.
• Corporate tax rates – Portugal has a progressive Corporate Income Tax (CIT) system:
  • 16% on the first €50,000 of profit
  • 20% on profits above that
  • There are also plans to reduce the lower rate to 17% by 2028, making Portugal even more attractive for small and medium-sized businesses.
• Portugal also offers attractive tax conditions for startups and investment funds, making it a growing alternative to traditional hubs like Luxembourg and Ireland.
• Tax-friendly regime for expats (TISRI)
  If you’re moving to Portugal and you set up a company here, you may qualify for the TISRI regime (successor to the old NHR scheme). Under this, various types of foreign-sourced income, such as dividends, capital gains, or pensions, can be exempt from Portuguese tax for up to 10 years. Curious to see how you can qualify? This article explains the new NHR 2.0.

In short, Portugal combines EU-wide benefits, tax agreements with other countries, and a growing number of expat-friendly incentives, making it an appealing place to launch a business.

Thinking about starting your own company? If you’d like professional guidance, Fresh Portugal can walk you through every step of the process.

Pros & cons of opening a company in Portugal

Everyone has different priorities, but it’s good to know the main pros and cons of opening a business in Portugal.

Pros:

• Favourable Tax Regimes – There are competitive corporate tax incentives, especially for small businesses and startups. Expats may also benefit from special tax regimes, such as the TISRI (successor to the NHR), which offers exemptions on certain foreign income.
• Access to the EU Market – As part of the EU, Portugal gives your company access to over 450 million consumers and free trade within the Schengen zone.
• Relatively Low Startup Costs – You can register an LDA (similar to an LLC) with minimal share capital (€1 per partner) and reasonable incorporation fees.
• Growing Startup Ecosystem – Lisbon and Porto are thriving tech hubs, hosting events like Web Summit, which offer numerous opportunities for networking, funding, and innovation.
• High Quality of Life –You can enjoy a mild climate, safety, excellent healthcare, and a rich cultural heritage, making it an attractive destination for entrepreneurs relocating here.
• Double Taxation Treaties – Portugal has treaties with 78+ countries, which help reduce international tax burdens for cross-border companies.

Cons:

• Complex Bureaucracy – Despite the use of digital tools, processes can still be slow and inconsistent. Non-urgent filings may take weeks unless you pay for expedited services.
• Language Barriers – Most legal and tax documents are written in Portuguese. While many lawyers and accountants speak English, you’ll likely need professional help.
• Mandatory Accountant – Portuguese law requires every company to have a chartered accountant (Contabilista Certificado), adding ongoing costs of around €150–€300 per month.
• Corporate Taxes Can Be Confusing – Between national corporate tax, municipal surtaxes, and social security obligations, the tax landscape can feel overwhelming for newcomers.
• Visa Requirements for Non-EU Founders – Non-EU entrepreneurs typically require a D2 Visa or a similar residency permit, which adds additional steps, paperwork, and costs.
• Slow Public Administration – Obtaining documents or getting questions answered can be frustrating, especially during holidays or peak times.

Portugal used to rank 39th worldwide in the World Bank’s Ease of Doing Business Index (2020 edition), which placed it around the middle among EU countries. This reflected the country’s strengths in areas like business setup and cross-border trade, but also highlighted ongoing challenges with bureaucracy and licensing.

The index was discontinued in 2021 after methodological issues, but people still search for it as a reference point. 

Who can start a business in Portugal?

In short, almost anyone, including Portuguese citizens, EU residents, and non-EU nationals, can create a startup or other businesses in Portugal. Individuals face minimal bureaucracy, with the only requirement being the obtaining of a Portuguese Tax ID Number (NIF). Foreign companies establishing subsidiaries are also required to obtain a Corporate ID Number.

Key business types in Portugal

When starting a business in Portugal, it is essential to select the most suitable legal structure for your business. The best type of business for you depends on factors like whether you’re working alone, hiring staff, raising investment, or managing significant risk.

Here is an overview of structures for businesses in Portugal, so you have an idea of which type of business you want:

Are you unsure which structure best fits your situation? Fresh Portugal can advise you on the best option for your business and assist with the registration process.

How to choose the right company type

Here’s a quick guide based on different situations:

Choose an LDA if…

• You want liability protection so your personal assets aren’t at risk – separating personal and business assets makes establishing a company in Portugal attractive
• You’ll have multiple clients or projects
• You plan to hire employees or grow over time
• You want a professional structure that’s trusted by Portuguese clients and banks

(This is the most common option for expats and small business owners.)

Choose a Unipessoal LDA if…

• You’re working alone but still want the legal protections of an LDA
• You want to keep things simple while maintaining credibility
• Many expats running one-person consultancies, travel services, or small online businesses pick this.

This is the business type I went for! I work alone as a travel writer and photographer.

Register your business as an SA (limited company) if…

• You need external investors or plan to list shares publicly
• You have a larger operation or international growth ambitions
• Typically chosen by startups raising venture capital, tech companies, and corporations.

One of the biggest advantages of setting up an LDA or S.A. is that your liability is limited to the company’s assets. This means if your company runs into financial trouble, only the business assets are at risk, not your personal savings or property.

By contrast, freelancers and sole proprietors are personally responsible for business debts, and the separation between personal and business affairs is a significant advantage when setting up a business in the country.

Choose ENI or freelancer status if…

• You’re a freelancer, coach, or consultant starting small
• You don’t want the ongoing costs of maintaining a company (e.g. accountant fees)
• You’re okay with being personally liable for debts or legal claims

However, keep in mind:

• If your annual revenue exceeds €12,500, you may need to start charging IVA (VAT).
• Many freelancers later upgrade to an LDA for liability protection and tax planning.

Step-by-step checklist to set up a company in Portugal

This is what the steps will entail in a nutshell, but we will dive deeper into each component afterwards. What you need also depends on the type of company, so some things may or may not be applicable to you. 

• Step 1. Get your NIF (Tax Identification Number)
  • Needed by all founders (Portuguese or foreign).
  • You can apply for a NIF online.
• Step 2. Choose your company type and name
  • Decide between LDA, Unipessoal LDA, SA, or other structures.
  • Select a name from the pre-approved list (fast and free) or request a custom name certificate (paid, with a slower processing time).
• Step 3. Request your NIPC (Corporate Tax Number)
  • This number identifies your company with Finanças and is required for the next steps.
• Step 4. Draft and sign the Contrato de Utilização (Articles of Association)
  • Defines your company’s purpose, structure, share capital, and shareholders.
  • Can use a standard model contract or a custom one prepared by a lawyer.
• Step 5. Submit the incorporation request at the Conservatória do Registo Comercial, part of the Instituto dos Registos e Notariado (IRN), the official authority responsible for company registrations in Portugal.
  • Pay incorporation fees (€220 standard, €440 urgent).
  • Once approved, your company is officially registered.
• Step 6. Receive your Certidão Permanente (Permanent Certificate of Registration)
  • Digital proof of your business registration.
  • Includes an access code for banks, partners, and authorities to verify your company details online.
• Step 7. Open a business bank account
  • Bring your Certidão Permanente, NIPC, and incorporation docs.
  • Portugal requires a minimum share of €1 per partner for an LDA and €50,000 for an SA.
• Step 8. Appoint a certified accountant (Contabilista Certificado)
  • Legally required within 15 days of incorporation.
  • They will register your company for VAT (if needed) and social security.
• Step 9. Register for Social Security (NISS)
  • If you employ staff or pay yourself a salary.
  • Your accountant usually handles this.

The steps look simple on paper, but Portuguese bureaucracy can be overwhelming. Fresh Portugal can handle the process for you, so you only need to sign when required.

Requirements for starting a business in Portugal

Before you can create your company, you’ll need to have a few key things in place. To start a company in Portugal, you’ll need:

• NIF (Tax Identification Number) – This is the first step for everyone, whether you’re Portuguese or an immigrant. Without a NIF, you can’t open a bank account, sign contracts, or register a business.
• NISS (Social Security Number) – Needed if you’re hiring staff or paying yourself a salary. For freelancers, this is usually set up when you first register with Finanças.
• Portuguese bank account – Required if you need to deposit share capital (for LDA or SA companies). Some banks are easier for expats than others, so it’s worth shopping around.
• Business plan & initial capital – Even if the legal minimum is only €1 for an LDA, it’s good practice to have some working capital ready.
• Corporate Object – This simply means defining the primary activity of your company (e.g., consulting, tourism services, IT).
• Company name – You can pick from a pre-approved list (fast and free), or pay extra if you want a custom name.

Note for non-EU citizens: If you plan to live in Portugal and actively manage your business there, you’ll need the correct visa, typically the D2 Entrepreneur Visa. This is something to sort out before incorporation.

Visas and residency permits for non-EU founders

If you’re from outside the EU/EEA/Switzerland, you’ll need the right visa or residency permit to live in Portugal and run your company here. The most common option is the D2 Entrepreneur Visa, which is specifically designed for business owners and startup founders.

To apply for a D2 Visa, you’ll need to:

• Show a business plan that demonstrates your company will contribute to the Portuguese economy
• Register your company in Portugal (or be in the process of doing so)
• Prove you have enough financial resources to support yourself and your business in the first year

Once approved, the D2 visa allows you to reside, and you can subsequently convert it into a residence permit in Portugal. It is typically valid for two years and can be renewed.

Other possible Portuguese visa routes are:

• Digital Nomad Visa (D8) – for remote workers or freelancers with foreign income, though less suitable if your business is fully Portugal-based
• Golden Visa – The Portugal golden visa program is still available through certain investment routes (not real estate), but less relevant for typical entrepreneurs

Tip: EU/EEA and Swiss citizens don’t need a visa. In this case, you only need a NIF and to register your residence locally if you plan to stay longer than 90 days.

If you’re a non-EU citizen, getting the right visa and residence permit is essential. Fresh Portugal specialises in helping entrepreneurs secure the D2 Visa and set up their company in Portugal.

The company registration process in Portugal

Setting up a company in Portugal is mostly done online, and technology has made the process easier, but not necessarily faster. Company registrations are handled by the Instituto dos Registos e Notariado (IRN) through the Commercial Registry Offices. Most applications can be completed online, although in-person registration is still available.

With urgent processing, your company will be registered within 3 to 5 business days. If you choose the standard (non-urgent) option, it typically takes around 10 business days. However, delays are common, so the processing time may be longer.

Here’s a breakdown of the main fees:

Tip: Most founders use the pre-approved list of company names. It’s faster and included in the standard fee. That’s why many Portuguese companies have unusual or random-sounding names. There’s no problem using one of these names, and it won’t affect your business.

If you prefer a specific company name for branding reasons, you can request a custom name. However, this incurs additional costs and can delay the process. For freelancers, consultants, and small businesses, choosing from the pre-approved list is usually fine.

If you’d like to register a specific company name instead of using the pre-approved list, you can request a Certificate of Admissibility through the official government portal.

The process itself is straightforward when handled by a Portuguese-licensed lawyer or company formation service. They’ll complete all the steps for you, and you’ll usually only need to sign the articles of incorporation. In-person registration is possible, but it takes longer, so most people opt for the fully online route.

Costs and taxes of starting a company in Portugal

The costs of opening and maintaining a business in Portugal depend on the structure you choose.

Here’s an overview of the most common options:

Tax rates in Madeira and the Azores are slightly lower than those on mainland Portugal. Madeira also has a special International Business Centre (IBC) where eligible companies may pay as little as 5% corporate tax. For most entrepreneurs, however, the setup process and requirements are the same across all regions.

Tax rules in Portugal can be complex, especially for expats. Fresh Portugal can provide tailored tax planning to ensure your company is compliant and tax-efficient.

Additional Portugal company costs to keep in mind

Bank account: Some company types (LDA, SA) require a Portuguese bank account to deposit share capital. Most banks have monthly fees.

Social Security (NISS): If you pay yourself a salary or are self-employed, you must register for social security contributions. Social Security payments can range from hundreds to thousands of euros per month.

VAT (IVA): If your annual turnover exceeds €12,500, your company must register for VAT. The standard rate is 23%, with reduced rates of 6% and 13% for certain goods/services.

Municipal Surtax (Derrama Municipal): Up to 1.5% depending on the municipality, applies to companies with profits.

What happens after incorporation?

Maintenance of Portuguese companies is relatively straightforward, with the only mandatory appointment being that of a chartered accountant (Contabilista Certificado or CC). You’re required to appoint an accountant within 15 days of incorporation (so about 2 weeks).

A competent accountant will make sure your company is kept on track with all its accounting and tax reporting obligations, leaving you with nothing to worry about except concentrating on developing your business. They will then handle your company’s registration with Finanças (the Tax Authority) and Social Security, as well as your ongoing tax and accounting obligations.

Accountancy costs are relatively low (€150–€300/month), with an all-inclusive annual cost of around €5,000 to €6,000 for companies with a revenue of up to €1 million.

Opening a business bank account in Portugal

Now it’s time to set up a bank account for your company. You’ll usually open the company’s bank account after you’ve reserved the company name and received the Certificate of Incorporation details, but before the company is fully registered.

This is because for certain company types (such as an LDA), it is necessary to deposit the share capital into the account as part of the incorporation process.

Setting up a bank account for your business can be confusing, and it takes time (it took me eight visits and more than a month to set up!). 

Step-by-step process:

1. Get your NIF (Tax ID number).
2. Select your company type and name (via Conservatória/ePortugal).
3. Request the company’s NIPC (Corporate Tax Number).
4. With your NIPC + draft incorporation documents, you can go to the bank to open the business account.
5. Deposit the share capital 
6. Provide proof of this deposit to the Conservatória do Registo Comercial to complete the incorporation.

Documents you’ll typically need at the bank

Each bank branch in Portugal may have slight variations, but generally, you’ll need:

• Your personal NIF
• Passport/ID card
• The company’s draft incorporation documents or articles of association
• The company’s NIPC (corporate tax number)
• Proof of residential address (for you and any partners/directors)
• Sometimes a business plan (especially if you’re a non-resident or opening an SA)

Extra bank tips

Many banks in Portugal (e.g. Millennium BCP, Caixa Geral, Novo Banco, Santander) are used to company setups, but the process can still be slow for immigrants, especially if you don’t speak Portuguese.

Some company formation services can help you open a bank account faster, sometimes even before you arrive in Portugal.

You might be asked to open a business bank account online, but if you don’t have a Portuguese residency card, it’s not always possible.

You can open the bank account once you have your NIPC and incorporation documents.

You’ll need to deposit share capital into it before the company registration can be finalised. The amount can depend on the bank and the company’s structure.

Business Insurance in Portugal

Once your company is set up and your bank account is open, it’s essential to consider insurance. Some types of insurance are compulsory by law, while others are optional but highly recommended depending on your business.

Compulsory Business Insurances

• Workers’ Compensation Insurance (Seguro de Acidentes de Trabalho):
  • Mandatory if you have employees, even if it’s just one person.
  • Covers workplace accidents and injuries.
  • If you’re a sole director and also working in the company, you may also be required to insure yourself.
• Professional Liability Insurance (Seguro de Responsabilidade Civil Profissional):
  • Compulsory for certain regulated professions, such as lawyers, doctors, architects, engineers, accountants, and real estate agents.
  • Protects against claims of professional negligence.
• Vehicle Insurance (Seguro Automóvel):
  • If your company owns a vehicle, it is mandatory to have at least third-party liability insurance.

Optional but Recommended Business Insurances

• General Liability Insurance: Covers accidents or damage caused to third parties on your business premises or through your services.
• Property & Contents Insurance: Protects your office, equipment, and stock against theft, fire, or other types of damage.
• Cyber Insurance: Increasingly relevant for tech companies and online businesses, protecting against data breaches or cyberattacks.
• Directors’ and Officers’ Liability (D&O): Protects company directors against claims related to management decisions.
• Health Insurance for Employees: Not mandatory, but a popular benefit in Portugal for attracting and retaining staff.

Social responsibility and ethical business in Portugal

Beyond the legal requirements, Portugal also encourages companies to focus on social responsibility and ethical business practices. This includes fair treatment of employees, sustainability, transparency, and community impact.

The Portuguese Association for Business Ethics (APEE) actively promotes these values and provides guidance to companies that want to align with international standards of responsibility and ethical business practices.

For many investors and entrepreneurs, following these principles isn’t just about compliance. It also helps build trust with clients, employees, and partners in Portugal.

Best business opportunities in Portugal today

Do you have an idea to start a business? There are some great options around the corner for locals, but Portugal is attractive for foreigners as well. Here are some ideas that work particularly well at the moment.

• Technology and Startups: Lisbon and Porto are thriving tech hubs, particularly in fintech, AI, and digital health.
• Tourism and Hospitality: Portugal remains a top travel destination, with strong demand for boutique hotels, travel services, and food tourism.
• Real Estate and Construction: Renovations, rental properties, and sustainable housing are on the rise.
• Renewable Energy: Green energy businesses (solar, wind, green hydrogen) are growing rapidly.
• Food, Wine, and Agribusiness: Portugal’s food and wine exports are globally recognised.
• Services for Expats: Businesses offering relocation, legal, real estate, and education services are thriving.

Sector-specific licenses and permits in Portugal

Once your company is incorporated, you usually don’t need a separate “business license“ to trade. However, certain industries are regulated and require extra permits or authorisations before you can legally operate.

Some common examples include:

• Tourism & hospitality → Alojamento Local license for short-term rentals, hotel/guesthouse permit. These are regulated by Turismo de Portugal, the national tourism authority.
• Food & beverage → Health & safety certification, food handling permits, alcohol license
• Transport → Taxi or passenger transport license
• Health & education → Accreditation from the relevant ministry
• Financial/legal services → Regulated professions (lawyers, accountants, doctors, real estate agents) must register with their professional body

Support for investors in Portugal

If you’re planning a larger investment or want to explore trade opportunities, Portugal also has an official government body that supports entrepreneurs and foreign businesses: the Portuguese Trade & Investment Agency (AICEP – Agência para o Investimento e Comércio Externo de Portugal).

The Portuguese agency for investment helps investors in Portugal by:

• Providing information on business opportunities and key sectors
• Supporting foreign trade and exports
• Assisting with large-scale investments and connections to local partners

You can learn more about the agency for investment and foreign trade on their official website: AICEP.

Setting up a non-profit company in Portugal

If your goal is not to make a profit but to run a charitable, cultural, educational, or social project, you won’t register a commercial company (like an LDA or SA). Instead, there are two main non-profit structures:

Associação (Association):

• The most common non-profit form.
• Requires at least two founding members.
• Profits must be reinvested into the association’s activities (cannot be distributed to members).
• Commonly used for community groups, cultural organisations, or sports clubs.

Fundação (Foundation):

• Created when one or more people (or entities) dedicate assets or capital to a long-term social purpose.
• Requires substantial initial funding and approval from the Ministry of Justice.Typically used for large-scale philanthropic or cultural projects.

Both associations and foundations can apply for public benefit status (utilidade pública) to access certain tax benefits and government support.

Need help setting up a business in Portugal? Fresh Portugal specialises in helping expats and entrepreneurs successfully open a company in Portugal. From paperwork and licensing to tax planning.

Frequently asked questions about starting a business

Ready to start your business in Portugal?

Opening a business in Portugal is more accessible than ever, thanks to simplified processes, low startup costs, and a friendly business environment. Whether you plan to launch a tech startup, a boutique hotel, or a consultancy, Portugal offers the tools and infrastructure to help you succeed.

The company set up in Portugal does take time! I started the process in August and was fully up and running by February. Although the ease of registering a company may seem straightforward, several factors can make the process lengthy. 

Need help setting up a business in Portugal? Reach out to Fresh Portugal. They specialise in helping expats and entrepreneurs successfully open a company in Portugal, from paperwork to tax planning.

Boa sorte – good luck – on your Portuguese business journey!

Learn more about moving to Portugal!

• Essential things to know before moving to Portugal
• How to move to Portugal visa guide
• How to move to Portugal from the US
• Moving to Portugal from the UK: Practical Guide
• D2 Visa Portugal: How to apply for the entrepreneur visa
• D7 Passive Income Visa
• D8 The Portugal Digital Nomad Visa
• Golden Visa Portugal: A Pathway to Portuguese Residency for Investors
• The new Portugal NHR 2.0: Everything you need to know
• How to legally start as a freelancer in Portugal
• How to start a company in Portugal as a foreigner
• Tips for buying a house in Portugal as a foreigner
• How to plan your Portugal wedding as a foreigner

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