Portugal is located in Southwestern Europe. It is a Roman Catholic Country. Do you want to register a Company in Portugal? This country has a rich culture. Mostly all the cities have theatres. Portugal has a population of 10.6 million (2011). People in Portugal are taxed on their income. These rates can be from 14.5% to 48% starting in 2021. For people without residency must pay only income tax. Non-residents pay a tax of 25% in 2021. Portuguese people are very friendly by nature. They are sincere which means they will do what they say. This can be a great advantage for starting a business in Portugal.
Why choose Portugal for Business?
Portugal is one of the best cities to live in. This country has a fantastic tech community. These types of facilities are some of the many reasons to start your business in Portugal.
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How to start a business in Portugal
If you are living outside Portugal and want to register a company in Portugal then these steps will help you.
Check your legal status for setting up a company in Portugal
Do you have the legal requirement to trade in Portugal?
- Portuguese residency card
- Tax Number from Portuguese Tax Office
- Social security number from Portuguese Social Security
Have a good business idea in Portugal
Starting a business requires a lot of research. Do market research in Portugal. Develop a strong business plan.
Meeting the Legal Residency Requirements
If you are a Non-EU/EFTA National you have to obtain a Portuguese work visa and residency permit. Likewise,
If you are from EU/EFTA National, you can travel to Portugal and work there. Opening a business to get a registration certificate from your local city council. This makes the residency formal and can cost around 15 euro.
How to register Company in Portugal
The first step to do is choose a business name. There is an easy way to do this. There is a pre-approved names list from where you can choose the name. If you want to use your own name then you have to get a Name or Denomination Approval Certificate before registering. You have to register a business address in Portugal.
After you have your name and address, you have to formally register your company with the Portuguese Government.
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Different ways to business registration in Portugal
If you are a foreigner then it is good to hire an accountant. This will save you time. Monthly costs can range from 100-250 euro. If you are confident enough to set up yourself then there are two easy ways to set up your business.
1. Setting up online (Empresa Online)
This will let you register online for around 360 euros. The time till be around 1-2 days with this process. But if you prefer to register your business by going then the next step will be necessary.
2. Establish on-the-spot (Empresa de Hora)
This method is fast and can be registered within an hour. The cost is around the same as setting up online. Around 360 euros.
There is also a symbolic initial capital requirement of 10 euros for limited companies.
Startups in Portugal business types
There are a few different legal structures for business in Portugal. These include sole traders to large incorporated companies. Portuguese Companies Code oversees the businesses in Portugal and states the legal forms. Examples are provided below:
Sole business owner
- Sole Trader
- Single-member Limited Company
- Individual Limited Liability Establishment
Multiple owners of a business
- Private Limited Company (Sociedade por Quotas)
Company in Portugal with a minimum of two partners and minimum capital investment of 5000 euro. Shareholders pay a minimum of 100 euro per share and are equally responsible for everything agreed in the Articles of Association.
Public Limited Company (Sociedade Anomina)
Portuguese company that needs at least five shareholders and the least capital investment of 50000 euro. Liabilities of debt are limited to business assets.
Partnership (Sociedade em Nome Colectivo)
Portuguese company with at least two partners whose liabilities extend to personal assets. These personal assets must use to cover debts.
Normal Corporate Tax in Portugal
This is the ‘normal’ corporate tax in Portugal. It is based on profit. The rate in Portugal is 21% and must be paid annually. In the case of SMEs, the first 15000 euro is taxed at 17% and the remaining is taxed at 21%. If you want to know more details about Income Tax in Portugal then this article is the best for you.
VAT For Company in Portugal
Companies have to pay VAT. It is liquidated through deductible expenses. It is important to deliver VAT to the state monthly or quarterly. VAT in Portugal varies in the type of goods or services and can have three rates- 23%, 13%, or 6%.
Other Values to Add
If you decide to have your company share capital completely or slightly to be paid up in assets then there are other values to add.
· Certificado de Admissibilidade, It can cost between 75 and 150 euro. It is valid for 3 months and only if you decide to choose a name of your choice.
- 50 euro per property
- 30 euro for each movable asset
- 20 euro for each vehicle with a cylinder capacity less than 50cm3. With a limit of 30000 euro
There is an extra cost for the brand. If you merge your brand with a class of products or services then there is an additional cost of 100 euro. This is done online.
What other costs you can have?
Registering for a company in Portugal might seem an easy process. There are other costs that need attention too. Costs can start adding from the beginning of a Company’s life.
A company needs a responsible person. A person who can handle submitting tax returns and handle all accounting. You must hire a Certified Accountant. The cost for a Certified Accountant can be over 100 euros per month. There is a cost for the billing software that is used by your Accountant.
There are free versions of this billing software. These software has limited functions. You can go for an average software to save cost. This will cost around 5-10 euros per month
Your employee, including managing partner, must have insurance. This insurance depends on the amount of the salary. You must have at least one filing insurance to protect the equipment. This insurance is not mandatory.
The cost to register a company in Portugal can start from 360 euro but can easily reach 1000 euro. There are monthly costs. It is important to keep your accountant close to help you with the tax contributions and keep them up to date. He can also help in having tax benefits for your company.