The reasons to start a business, especially in Portugal, abound. Whether you simply want an extra revenue stream, or you have an idea that could revolutionise an industry, starting
a business is an excellent way to take command of your future. And the current low levels of entrepreneurship in Portugal means that if your business is viable it will have room to succeed
and grow. This also means, you might not haul a massive income and your business plan must be vigorous. This article will address the process of starting a business in Portugal and profile
common types of businesses here. Firstly, ensure that you can legally set up a business in Portugal. Particularly if you are a foreign resident. Do you meet the legal requirements for self-employment in Portugal? Here are a few items you will need:
By the time you have written a viable business idea and decided on its legal structure, you have probably already given it a great name as well as a physical address at which it can both
send and receive mail. Now you are ready to choose an official set-up method. One method of set-up can be accomplished online (Empresa Online), which allows certain types
of Portuguese businesses to register within 1-2 days, at a cost of EUR360. A printable electronic
certificate will be supplied. The Portal de Empresa website for doing this can be found here. Alternatively, you can go to an official office and set up on-the-spot (Empresa de Hora), which is
available for sole-proprietors and limited companies, can be created in an hour. The cost remains EUR360. All partners in the business should be present, along with the requisite
documentation, as well as any legal representatives. Further details on using Empresa de Hora can be found here.
If, for any reason, you are unable to register your business using Portugal’s Empresa Online or Empresa de Hora, you can use the traditional method (Criacao da Empresa), by
following the steps outlined below:
1. Attain from the Institute of Registries and Notaries (IRN) a Certificate of Admissibility in order to formally identify your business name;
2. Apply for both a Company Card and Collective Card (your primary business ID) from the IRN;
3. Open a dedicated business account at a Portuguese bank and deposit your initial capital;
4. Announce the inauguration of your business activity at a local Portuguese tax office;
5. Enrol your Portuguese business at a Commercial Registry; and finally
6. Register as a local employer with a Social Security office.
Please note that some businesses cannot legally commence activity before Portugal grants an official status. Thus, before “throwing open the doors” double-check to see if your
specified business activity or industry has additional requirements, such as a license or certified
qualifications. Upon completion of all these steps, which should take approximately 15 days, you can then start your business in Portugal. As alluded to above, different types of businesses, and not to mention the industries in which they operate, often have specific regulations to which they must adhere. You are probably already aware of the several distinctive legal structures for businesses, ranging the gamut from sole-proprietor businesses with few to none employees to large incorporated businesses with multiple employees. The Portuguese government provides a comprehensive list of regulatory codes that define the different legal structures and govern their operation. The following page (Practical Guide For Your Business) should help you successfully navigate the legal and bureaucratic channels with relative ease. Here is a list of basic, legal business structures that you will want to get acquainted with early on in your endeavour.
Businesses owned by one individual: a sole-proprietor (or trader) works well for most freelancers, as it’s the simplest and cheapest; a single-member limited company provides extra legal and financial protections for businesses that utilize expensive assets or operate with high liability, but requires a minimum capital investment; and an individual limited liability establishment, though similar to the previous business type, offers greater protection and stipulates that the minimum investment capital must consist of cash, a minimum of two-thirds.
• Businesses owned by more than one person: a private limited company (Sociedade por Quotas) possesses a minimum of two partners and a minimum capital investment, while shareholders pay a nominal sum for each share they possess, making them jointly responsible not only for everything agreed to in the Articles of Association but also debts incurred by the assets the business owns; a public limited company (Sociedade Anomina) requires a minimum of five shareholders and, of course, a minimum capital investment, but importantly each shareholder is liable only up to the amount of their investment; a partnership (Sociedade em Nome Colectivo) is similar to sole proprietorship, though requiring a minimum of two partners, each of whom will be personally responsible for all liabilities and assets; a limited liability partnership (Sociedade em Comandita) is a company structure, minimum of two partners, with a mix of general partners who operate the business, which permits them unlimited liability (including personal assets) as well as “sleeping partners” who, like shareholders, provide capital whose liability is limited to the amount invested; a cooperative, on the other hand, is a non-profit organization established on the principles of mutual cooperation and assistance by all members of the business, possessing various compositional structures and income models. Note well, that a special department, the Antonio Sergio Cooperative Sector Institute (CASES) regulate Portuguese cooperatives. Again, this is just a brief overview. There are many situations and circumstances not addressed here that require further research and, in all probability, professional legal guidance. Setting up an off-shore company, registering a foreign-based company, obtaining business visas, workers’ rights, and applying for immigration, not to mention, acquainting yourself with tax laws and accounting procedures are topics for further articles. Your head might be swimming right now with all the possible variables, unless you already have a firm idea of what your business will look like and how it will function. You owe it to yourself to do your homework and research as much as possible, before writing your business plan, much less starting the official registration process.
Yet, even if you do have a notion of what is required of you to move ahead, we urge you. to hire legal counsel fluent in your native language. There might be beneficial tax breaks of
which you are unaware or zoning restrictions that could hamper development. Hiring the right guidance can save you time, money, and headaches.
For Further Reading:
• EXPATICA: STARTING A BUSINESS IN PORTUGAL
• E-PORTUGAL: COMPANIES AND BUSINESSES
• PORTUGUESE MINISTRY OF THE ECONOMY
• BRITISH-PORTUGUESE CHAMBER OF COMMERCE
• PROGRAMME OF SUPPORT FOR LOCAL EMPLOYMENT INITIATIVES
• PORTUGAL VENTURES (OFFERING HELP TO START-UPS AND ENTREPRENEURS)
• PORTUGAL GLOBAL (OFFERS SUPPORT TO BUSINESSES AND SELF-EMPLOYED)
• INFORMATION ON PORTUGUESE BUSINESS CENTRES WHERE YOU CAN GO TO SET UP YOUR COMPANY ON-
THE-SPOT AND GET ADVICE ON BUSINESS ISSUES