How do I start a business in Portugal?

To start a business in Portugal, follow 6 steps: Obtain NIF (Tax Number), Incorporate via Empresa na Hora, Deposit Share Capital, Register for VAT and Social Security, Open Corporate Bank Account, Register with Local Municipality. The process takes approximately 42 days and costs around $430 USD.

What types of business entities can I register in Portugal?

Portugal offers 4 entity types: Private Limited Company (Lda) (min capital: $1, foreign ownership: 100%); Public Limited Company (SA) (min capital: $50000, foreign ownership: 100%); Sole Proprietorship (min capital: $0, foreign ownership: 100%); Branch Office (min capital: $0, foreign ownership: 100%).

Can foreigners own a business in Portugal?

Yes, foreigners can own businesses in Portugal. Private Limited Company (Lda) allows up to 100% foreign ownership. Public Limited Company (SA) allows up to 100% foreign ownership. Sole Proprietorship allows up to 100% foreign ownership. Branch Office allows up to 100% foreign ownership.

What is the minimum wage in Portugal?

The minimum wage in Portugal is $870/month (EUR). Average monthly wage is approximately $1600. Standard work week is 40 hours with 22 paid leave days per year.

How much does it cost to run a business in Portugal?

Estimated monthly overhead for a small business (5-10 employees) in Portugal is approximately $12000. Office rent averages $22/sqm/month. Skilled workers average $2500/month. Typical break-even: Tech 12 months, Services 10 months, Retail 16 months.

Countries PortugalBusiness Guide

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Start a Business in Portugal

Complete guide: entity types, registration, costs, taxes, labor laws, and break-even analysis

~42 days

Setup Time

~$430

Setup Cost

21%

Corporate Tax

100%

Foreign Ownership

#39

Ease of Business

Entity Types

Entity	Min Capital	Foreign %	Liability	Min Shareholders	Best For
Private Limited Company (Lda) Sociedade por Quotas	1 EUR	100%	Limited	1	Most popular entity for SMEs and foreign investors - flexible and low capital requirement
Public Limited Company (SA) Sociedade Anonima	50,000 EUR	100%	Limited	5	Larger companies, publicly traded firms, or those seeking institutional investment
Sole Proprietorship Empresario em Nome Individual	None	100%	Unlimited	1	Freelancers and sole traders - simple tax regime for low-revenue businesses
Branch Office	None	100%	Unlimited	0	Foreign companies establishing commercial presence without separate legal entity

Registration Steps

Obtain NIF (Tax Number)

Apply for a Portuguese tax identification number (NIF) at a local tax office or through a fiscal representative

1-3 days

Free

Tax Authority (AT)

Incorporate via Empresa na Hora

Use the Empresa na Hora (Company in an Hour) one-stop-shop to register company, choose pre-approved articles, and get NIPC

0-1 days

~$380

Empresa na Hora

Deposit Share Capital

Deposit the declared share capital into a corporate bank account within 5 business days

1-5 days

Free

Commercial Bank

Activate VAT registration with Tax Authority and enroll with Social Security for employer obligations

1-5 days

Free

Tax Authority / Social Security

Open Corporate Bank Account

Open a business account at a Portuguese bank (CGD, BPI, Millennium BCP, Novo Banco)

3-14 days

Free

Commercial Bank

Notify the local municipality of business activity and obtain any required operating licenses

3-14 days

~$50

Local Municipality

Total Estimated

42 days max$430

Tax Framework

Corporate Income Tax21%

Reduced 17% rate for SMEs on first EUR 50K of taxable profit. Municipal surcharge of up to 1.5% and state surcharge on high profits. NHR regime (ended for new applicants in 2024) offered flat 20% on Portuguese-source employment income.

IVA23%

Personal Income Tax13-48%

Capital Gains Tax28%

Dividend Withholding25%

Tax Treaties79 countries

Tax Incentive Zones

Madeira International Business Centre (MIBC) offering 5% CIT rate. Azores with reduced rates.

Labor Laws & Costs

$870/mo

Minimum Wage

$1600/mo

Average Wage

40 hrs/week

Work Hours

22 days/year

Paid Leave

1.7 weeks/year

Severance

23.75% of salary

Employer Social Security

11% of salary

Employee Social Security

Required

Foreign Worker Permit

Foreign Worker Quota: No formal quota. Tech Visa program fast-tracks permits for certified tech companies.

Visa & Immigration

D7 Visa (Passive Income)

For retirees and remote workers with stable passive income (min ~EUR 9,120/year). Leads to permanent residency after 5 years.

10 weeks

Processing time

$200

Estimated cost

Golden Visa

Investor

Investment in funds (min EUR 500K), job creation (10+ jobs), or R&D (EUR 500K). Grants residency with minimal stay requirement. Property route discontinued in 2023.

Digital Nomad Visa (D8)

Remote Work

For remote workers earning at least 4x Portuguese minimum wage (~EUR 3,480/month) from non-Portuguese employers. Valid 1 year, renewable.

Work Permit Process: Employer submits work permit application to IEFP. Tech Visa program offers fast-track for IAPMEI-certified companies.

Business Environment

#39/190

Ease of Business Rank

2.5 days

Starting a Business

1 days

Registering Property

547 days

Enforcing Contracts

62/100

Corruption Perception

83%

Internet Penetration

EUR

Currency

UTC+0

Time Zone

GoodCould be betterHover a dot for the threshold and source. Sources: World Bank, Transparency International, ITU.

Portuguese

Investment Zones & Provinces

Madeira International Business Centre (MIBC)

Free Zone

Funchal, Madeira

Incentives

5% corporate tax rate until 2027EU-compliant state aid regimeExemption on dividends paid to non-residentsNo withholding tax in qualifying cases

Key Sectors

Financial ServicesTradingHolding CompaniesIT Services

30-40% lower than Lisbon

Lisbon Tech Hub

Tech Hub

Lisbon

Incentives

Web Summit host cityStartup ecosystem with acceleratorsStation F Lisbon campusSIFIDE R&D tax incentive

Key Sectors

SoftwareFintechAIE-commerce

Porto Innovation District

Tech Hub

Porto

Incentives

Lower operating costs than LisbonStrong university talent pipelineGrowing startup ecosystemPorto Tech Hub co-working

Key Sectors

Software DevelopmentEngineeringCreative IndustriesBiotech

20-30% lower than Lisbon

Break-Even Analysis

Retail (months)

F&B (months)

Tech (months)

Manufacturing (months)

Services (months)

Typical Operating Costs in Portugal

Per-person or per-unit costs. Multiply by your team size for total estimates.

Office Rent	$22	per sqm/month
Skilled Worker Salary	$2,500	per 1 worker/month
Unskilled Worker Salary	$950	per 1 worker/month
Electricity	$0.21	per kWh
Business Internet	$35	per 1 connection/month
Est. Monthly Overhead (5-10 staff)	$12,000	total/month

Sources: World Bank Open Data, ILO, Numbeo Cost of Living Index, local government publications. Salaries reflect market averages and may vary by city, industry, and experience level. Last updated 2025.

Break-Even Calculator

Total Investment (USD)

Monthly Revenue (USD)

Monthly Costs (USD)

Tax rate applied: 21% (corporate rate)

months to break even

$2,370

monthly net profit

56.9%

annual ROI

$314,000

total cost to break even

Break-even progressModerate recovery

Next Steps

Your Action Checklist

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Key Considerations for Foreign Investors

Empresa na Hora allows same-day company incorporation - one of the fastest in Europe

Digital Nomad Visa (D8) and D7 visa make Portugal one of the most accessible EU countries for remote workers

Madeira International Business Centre offers a legitimate 5% CIT rate within the EU framework

Employer social security contributions are high at 23.75% - factor into total labor cost calculations

Tech Visa program fast-tracks work permits for startups certified by IAPMEI - ideal for hiring global talent

Strong quality of life attracts international talent - ranked among Europe's best for expat living

Property Golden Visa route was closed in 2023 - fund and job creation routes remain available

Last updated: 2025-Q4

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Start a Business in Portugal

Entity Types

Registration Steps

Tax Framework

Labor Laws & Costs

Visa & Immigration

Business Environment

Investment Zones & Provinces

Break-Even Analysis

Next Steps

Legal & Registration

Financial & Tax

Operational

Immigration & Visas

Key Considerations for Foreign Investors

Start a Business in Portugal

Entity Types

Registration Steps

Tax Framework

Labor Laws & Costs

Visa & Immigration

Business Environment

Investment Zones & Provinces

Break-Even Analysis

Next Steps

Legal & Registration

Financial & Tax

Operational

Immigration & Visas

Key Considerations for Foreign Investors