Setting up a company in Portugal

Setting up a company in Portugal costs €4500 + VAT.

Why start a business in Portugal?

Portugal is one of the calmest countries in the world, with a relatively high quality of life. It also has a relatively young workforce. Investing in Portugal can be one of the best business decisions you make. The country’s economy is growing steadily, with an annual growth rate of around 0,8%.

Portugal’s membership of the European Union is another important factor to take into account when setting up a business in Portugal. Membership of the European Union means a single currency and free movement and trade across all Member States. Portugal is one of the leading members of the European Union in services, biotechnology and information technology.

Foreign investment is one of Portugal’s top priorities. The government considers it one of the most important factors for economic growth. Portugal therefore has fewer restrictions on foreign investment than other countries. This allows foreign investment in all private sector activities.  This is another reason why you should invest in Portugal.


Currently, different types of business forms can be set up in Portugal:

Sociedade por Quotas (LDA)

It is the most common type of company and the most common form of company. At any time, an LDA may choose to ‘switch’ to the SA form of company, which is described below. This type of company must have at least two shareholders and a share capital of at least 5000€

– Public Limited Company (SA)

A limited company with a minimum capital of 50000€, of which at least 30% must be paid up at the time of incorporation. The capital consists of freely transferable shares which may be issued to the applicant. There must be at least 5 initial shareholders before the company can be set up. A limited company is the most demanding form of company under the law and, irrespective of its size, its accounts must be audited annually by a chartered accountant.

– Holding company (SGPS)

If the LDA or SA is a holding company, it may have an additional legal status under the current regulations, called Sociedade Gestora de Participações Sociais (SGPS). The advantage of this legal status confers certain tax advantages.

– Branch (Sucursal)

Is a local extension of the represented entity, which is not a separate legal entity. It is treated as a Portuguese company for tax and compliance purposes. However, unlike other jurisdictions, Portugal does not require the filing of accounts by the management company and, unlike a local company, the distribution of the branch to the management company is tax exempt. A foreign company with a branch in Portugal is a popular structure for certain types of investments, such as real estate.

How is a company set up in Portugal?

Registering a company in Portugal is more convenient than ever – once selected, we offer our services to clients remotely, with professionals sending all the documents. The registration itself usually takes 3-4 weeks.

The prospective entrepreneur will receive a questionnaire and a list of documents to fill in. We will liaise with the notary and, if necessary, ask you for further details.

The minimum share capital of an LDA is €1 per shareholder. The capital must be paid up by the end of the year in which the company is incorporated (for example, a company incorporated on 01.01.2022 must be paid up by 31.12.2022).

Setting up a company in Portugal involves several types of taxes:


The standard VAT rate is 23% in Portugal, 18% in the Autonomous Region of Azores and 22% in the Autonomous Region of Madeira.


The current corporate tax rate in Portugal is 21%.


Dividend tax in Portugal applies to both residents and non-residents and has a flat rate of 28%.


Thanks to its geographical location, Portugal is an attractive hub for international connections: Lisbon International Airport offers flights to more than 100 international destinations. In addition, Portugal is ranked seventh in the world for proficiency in English as a second mother tongue.

Portugal is the 30th richest country in the world in terms of GDP and the 24th richest in terms of per capita income, according to the World Bank. The 2.2% economic growth also reinforces Portugal’s image as a modern, internationalised and increasingly prosperous country.

LCPC aims to provide you and your business with high quality assistance. Setting up a company is one of the first steps in building your business, and we will help you along the way!

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