How to register a company in Portugal

Register a company in Portugal

Portugal is a country whose chief exports are automobiles, machine, clothing, tomato paste, wine, plastic molds, cork and so much more.

It is rated 39 out of 190 countries by World Bank in ease of doing business. Opening a business in Portugal allows your company to tap into the European Union market.

This makes Portugal a great country to start a business for foreigners.

To open a business in Portugal, you will need to have a residency in Portugal as well as tax and social security numbers.

For a non-European Union citizen to be able to register a company in Portugal, you must obtain a Portuguese visa and a residency permit.

There are three main types of Portuguese Visas. They are:

-Short stay visas. The short stay visa applies for stay up to 90 days. Citizens of the European Union do not need this visa. The short stay visa is reserved for visiting family, tourism, airport transit as well as temporary travel visits. The short stay visa usually costs €80, while children between the age of 6-12 years old pay €40.

-Temporary Stay National Visas. This type of visa grants non-European Union citizens temporary stay in Portugal up to a year. There are many types of Temporary Stay Visa which are; a study visa, temporary work visa, internship visa, youth mobility visa and so on. A temporary stay national visa cost up to €75 but children under the age of 6 do not pay a fee.

-Long Stay National Visa. This is also known as the residency visa which allows stay in Portugal for over a year long. It is applicable to all non-European Union citizens. To apply for this visa, you will have to apply for a residency permit with the Portuguese Immigration and Borders Service. You will also have to show proof that you can financially support yourself throughout your stay.

Examples of Long Stay Visas are work visa, professional training visa, study visa, family reunion visa and so on.

Now that we are well acquainted with various types of work permit to be able to register a company in Portugal, here are the guidelines to help you with your registration process.

Are you looking to start a company in Portugal. Here are ways for how to register a company in Portugal.

Before you can legally start a company in Portugal, you need to have a Portuguese residency card, a tax number from the Portuguese tax office and a social security number. For a non-European Union citizen, you will need to obtain a Portuguese visa (as previously mentioned above) and a residency permit.

There are steps in choosing a company name. Your company name must be unique to only your company, it must be meaningful, simple and short. It is advisable to select more than one company name and to check if those names are available for your company to use.

To check if your company name is available or taken, you need to check through the Portuguese Register of Business names. If the company name you want to use is available, then register the name via a Validation Certificate known as the Certificate of Admissibility which is issued by the National Registry of Companies. This registration comes at a cost of €75 and it is usually valid for three months.

There are many types of legal structure for businesses in Portugal regulated by Portuguese Companies Code. You must select the best structure that fits your company. Here are the different legal structures for your company.

-Private limited company. This type of company needs a minimum of two partners and a minimum capital investment of €5,000. The shareholders need to pay a minimum of €100 per share and are all feasible for debts covered by the business assets.

-Public limited company. This type of company requires at least five shareholders and a minimum capital investment of €50,000. Shareholders are liable for debts that amount up to their share value.

-Partnership. It requires a minimum of two partners and their liability extends to personal assets that can be used to cover any company debts.

-Limited liability partnership. This also requires a minimum of two partners to run the business and have unlimited liability which includes personal assets. This means that their liability is limited to the amount they invested.

-Sole trader. This is a form of self employment whereby one person trades as a business. There is no minimum capital requirement and the entrepreneurs have unlimited liability for business debts.

Now that you have selected a company name as well as a legal structure, it’s time to set up your company by signing the deed of Incorporation. This procedure can be done online which allows you to set up your company quickly and it costs €360 and your company registration will be completed in two days.

Your company will be provided with a tax identification number (NIF) and a social security number. The deed includes specific information such as the type of company, each partner’s share capital, the name of the company and so on.

In Portugal, it is required to have your own business accountant. The duty of the accountant is to help set up a company account for you once you have signed the deed. With your International Bank Account Number (IBAN) number, your accountant will register your company’s activity with the tax office so you are ready to pay taxes.

1. Corporate Income Tax. Limited and incorporated businesses must pay Portuguese corporate tax. The corporate tax in Portugal has a flat rate of 21%of taxable profits.

2. Social security in Portugal. If you have any employees then you must contribute to social security. Portuguese social security also secures the basic rights of citizens and ensures equality in opportunities, and also provides measures of support such as employment, allowance, paternal leave and other financial support.

3. VAT in Portugal. Self-employed individuals and companies that produce, market or provide services must pay Value Added Tax (VAT) to the local authorities. The Value Added Tax is paid by consumers when they are purchasing these goods and services.

Simply put, the Value Added Tax money is kept by the company until it must be returned to the states, as it is being paid by the clients. However, there are three types of Value added Tax rates.

The normal value added tax rate applies to most taxable goods and services.

The intermediate value added tax rate applies to food and drinks’ goods and services.

The reduced value added tax rate applies to essential products and services like vegetables, transport, medicine and so on.

4. Work Compensation Fund and Guarantee Fund for Work Compensation. This was established to ensure the worker’s right to receive half of the compensation owed to them in case of termination of their employment contract.

Portugal is among the top 10 countries in the world in terms of easy registration of companies. The country provides a quick registration on the Spot, allowing companies to be created within one hour of filling out the right form.