Are you interested in setting up a company in Portugal? Have you been surfing the web in search of answers? Have trouble locating an english source of information regarding “empresas” in Portugal? Look no more, as you have just stumbled upon a detailed article that will shed light on the process of company formation in Portugal. Read on to find out all you ever wanted/needed to know regarding the matter. But don’t worry though, I’ll keep it short and informative!
First things first. Regardless of your nationality and country of residence – you will require a Portuguese Tax Number (NIF) and registration with the Social Security. After you take care of this matter you are officially eligible for company creation in Portugal.
Next step is choosing the name. Now in Portugal there are two paths that you can follow. The first one is simple – you can choose a name from the list of pre-approved names. It is available online on the government services website (with an english version too). If you do not like any of the pre-approved names, you can always create a custom one and request a company name certificate that will be valid for 3 months after the issue date (this is also done online on the government services website).
After you got the name question settled, it’s time to actually register! This process can be done two ways. You can complete registration online, on the government services website, however bear in mind that it can be a bit tricky and not advised to do without qualified help unless you know what you are doing. Or you have the more “traditional” way – where you go physically to the local office and file the registration there, this process is referred to as “Empresa na hora” and literally translates to “Business on the spot”. Regardless of the option you choose, you will have to pay the state fee of 360 euro.
Next step is accounting! If you want to do business in Portugal you are obliged by law to employ a certified local accountant. Moreover an accountant is needed to declare the start of commercial activity for your newly formed company. So obviously you will need to find a proper, local accountant that will take care of this issue for you. Luckily this shouldn’t be a problem, as there is an abundance of english speaking accountants in Portugal. Their services usually range from 200-300 euro per month. Please note that according to Portuguese legislation you will also need to be using registered accounting software that is digitally linked to the tax authorities.
When all this is taken care of, it’s time to talk about… TAXES. As a good friend of mine once said people in America are only afraid of taxes and death, and in Europe – only death. While this is a bit of a humoristic approach, there is a grain of truth here. Although the taxation regime in Portugal is very soft, flexible and most definitely friendly, one can never forget to pay the taxes.
In Portugal tax year lasts from 1st January until 31st of December. Corporate tax is at 21% however it might be raised up to 30%+ depending on the size of your business and the profits. Regarding taxes on the salaries, the rates include a social security tax of 11% (paid by the employee) and a 23.75% levee paid by the company. In addition, there is a progressive Income Tax that is partly paid by the company. Your accountant will need to send you a salary sheet with your social security and income tax payment codes .
If you are looking to employ staff, there are a number of things to take into consideration. First of all, you will be obliged to pay your employees 14 salaries annually (due to the holiday pay and Christmas bonus that each account for a monthly salary). Moreover you have to pay social security contributions. In terms of holidays – there are 14 “red” calendar days and also a guaranteed 5 weeks of paid leave per year.
Business banking will not be an issue as there are plenty of banks that offer such services with decent digitalization. We for one recommend Novo Banco. On the other hand there are also a number of “Neo” banks that will be more than happy to assist you.
Even if your business does not require a physical office, you will have to register a legal address nevertheless. An upside is that this address can be the same as your domicile address.
To wrap up, incorporating a company in Portugal is relatively easy and hassle free. However as you noticed it gets rather complicated if you are not a local. Regardless of how it may seem, in reality this process can be simplified immensely. If you are considering registering a company as a foreigner, all you have to do to ease the burden is to access our online platform. We will take care of the whole process from the very beginning. We offer a complete service package that encompasses all steps and subtasks related to company incorporation. Just register an account with us, complete an online form, upload the documents and pay the fees. It doesn’t get easier than that!