How to Start a Business in Portugal as a Foreigner: First Steps

Starting a business in Portugal as a foreigner is possible, and you do not need to become a Portuguese tax resident simply to own or create a Portuguese company.

But registering the company is only one part of the process.

Before you incorporate, it is worth understanding how your business structure, personal tax residency, immigration status and plans for taking income from the company fit together. Decisions made at the beginning can affect how the business operates and how you are taxed later.

Here are the first things to consider if you are planning to start a business in Portugal.

Can a foreigner start a business in Portugal?

Yes.

Portugal allows foreign individuals and foreign companies to establish Portuguese companies. The Empresa na Hora system allows any person or legal entity to create a company, and individual shareholders can use a passport or residence permit as identification. They will also need a Portuguese tax identification number, known as a NIF. 

This means that you do not have to be a Portuguese citizen or Portuguese tax resident simply to become a shareholder in a Portuguese company.

That distinction is particularly important for international founders who may want to establish the business before relocating to Portugal.

Do you need to be a Portuguese tax resident to open a company?

Company ownership and personal tax residency are separate questions.

You can obtain a Portuguese NIF as a non-resident. Portugal's Tax Authority confirms that requesting a NIF does not, by itself, require a non-resident to appoint a Portuguese tax representative. Different obligations can arise later if the person establishes certain tax connections with Portugal. 

Becoming a shareholder in a Portuguese company also does not automatically make you personally tax resident in Portugal.

Portuguese tax residency generally depends on factors such as spending more than 183 days in Portugal during the relevant 12-month period or having a home here in circumstances indicating an intention to use it as your habitual residence. Portuguese tax residents are generally subject to Portuguese taxation on worldwide income, while non-residents are generally taxed in Portugal on Portuguese sourced income. 

So, the more useful question is often not simply whether you can open the company.

It is where you will personally be living when the business starts operating, and how the company will pay you.

1. Decide whether you actually need a Portuguese company

Before incorporating, consider what you are planning to do.

Someone providing consulting services alone may have very different needs from someone building a company with employees, investors, physical premises or multiple shareholders.

For some entrepreneurs, operating as a self-employed professional may be appropriate. For others, creating a separate Portuguese company may make more sense.

This decision can affect liability, accounting, taxation, Social Security and the way you receive income from the business.

If you expect the business to change significantly within the first few years, it is also worth considering whether the structure you choose today will still work later.

2. Get a Portuguese NIF

A NIF is one of the first practical requirements for doing business in Portugal.

For individuals creating a company through Empresa na Hora, the Portuguese registration authorities require identification and the NIF of each shareholder and/or manager. 

Having a NIF does not mean that you are automatically Portuguese tax resident. It is simply your Portuguese tax identification number and is used for interactions with the Portuguese tax system.

For international founders, this is often one of the first administrative steps before incorporation.

3. Choose the right type of company

Portugal has several legal structures for businesses.

Two of the most common structures for smaller and privately held businesses are the Sociedade Unipessoal por Quotas, which has one shareholder, and the Sociedade por Quotas, which has two or more shareholders.

Both types of companies can have a minimum quota of €1. Portugal also allows companies to be created as a Sociedade Anónima, where different rules and a minimum share capital of €50,000 apply. 

The minimum legal capital should not be the only factor in deciding which structure makes sense.

Ownership, liability, investment plans, the number of founders, future shareholders and how you expect the company to grow should all be considered.

4. Define what your company will actually do

When creating a company in Portugal, you need to identify its economic activities.

These are registered using Portuguese economic activity codes, known as CAE codes.

Under the current CAE Rev.4 system, a company created through Empresa Online 2.0 selects one principal CAE and can initially include secondary activities. The company's corporate purpose must also clearly describe what the business intends to do. 

This can sound like a minor administrative detail, but it is worth considering carefully.

A software business, consultancy, property company, online retailer and regulated professional service may all have different tax, licensing or regulatory considerations.

Your CAE codes should reflect what the business will be doing rather than simply what is easiest to select during registration.

5. Decide how you will incorporate the company

Portugal currently offers both in person and online routes for company formation.

Empresa na Hora allows certain companies to be incorporated at a registration office. It can be used for Sociedade Unipessoal por Quotas, Sociedade por Quotas and Sociedade Anónima structures. The standard service currently costs €360. 

There is also Empresa Online 2.0, which allows companies to be incorporated digitally. Foreign citizens can access the system using eligible digital authentication, including a Chave Móvel Digital associated with a passport or European eIDAS authentication. Lawyers, notaries and solicitors can also create companies through the online system using their professional digital credentials. 

The right route can depend on who the shareholders are, whether they are individuals or companies, where they are based and the documentation available.

6. Think about tax before the company starts trading

This is where company formation becomes more than an administrative exercise.

Before a business begins operating, its tax position needs to be established correctly.

Questions may include corporate income tax, VAT, accounting, salaries, director remuneration, dividends and how profits will eventually be distributed.

For international founders, there may also be tax consequences outside Portugal.

For example, you may live in one country, own a Portuguese company and receive salary or dividends from that company. The treatment of that income can depend on your personal tax residency, Portuguese tax rules and any applicable double taxation agreement.

This is why it can be useful to consider the business and personal tax position together before deciding how the company will operate.

7. Do not confuse company ownership with immigration status

Owning a company in Portugal does not automatically give you the right to live or work here.

This distinction matters particularly for founders from outside the European Union, European Economic Area and Switzerland.

Portugal has a D2 visa route for entrepreneurs and independent professionals. Official Portuguese guidance confirms that non-EU and non-EEA citizens who want to work independently in Portugal generally need an appropriate visa or residence authorisation. 

So, it is possible to have a situation where someone can legally own a Portuguese company but still needs the appropriate immigration status before relocating to Portugal and actively working from here.

If moving to Portugal is part of the business plan, immigration should therefore be considered at the same time as company formation.

8. Understand what happens after the company is created

Registration is not the final step.

After incorporation, there are additional corporate, accounting and tax obligations.

For companies created through Empresa na Hora, the Portuguese registration authority notes that the company's beneficial ownership information must generally be declared within 30 days. There are also rules concerning the deposit of share capital following incorporation. 

The business will also need to deal with its tax registration and accounting obligations before trading.

For self-employed activity, the Portuguese Tax Authority requires the declaration of commencement of activity before the activity begins. Where organised accounting applies, the declaration must be submitted by a certified accountant. 

Depending on the business, other issues may include VAT registration, invoicing, payroll, Social Security, insurance, licences and sector specific requirements.

What if you are planning to move to Portugal as well?

This is where planning becomes particularly important.

Starting a Portuguese company, moving to Portugal and becoming Portuguese tax resident are three separate events. They do not necessarily happen on the same day.

For example, someone might establish a Portuguese company while still living abroad, relocate several months later and only then become Portuguese tax resident.

The timing can affect personal taxation and how income from the company is treated.

If you are considering a Portuguese tax incentive such as IFICI, your professional activity, company structure, timing of the move and eligibility for the regime may also need to be considered before making decisions.

The order in which things happen can matter.

Can you start as a freelancer instead?

Possibly.

Creating a limited company is not always the first step required to do business in Portugal.

Portugal allows individuals to register as independent professionals and carry out self-employed activity. Independent workers generally need a NIF, must register the activity with the Portuguese Tax Authority and are subject to the applicable tax, VAT and Social Security rules. 

For someone starting alone with relatively straightforward professional services, this may be worth comparing with incorporating a company.

For someone who plans to employ people, bring in shareholders, raise investment or separate business liabilities more clearly, a company structure may be more appropriate.

The right answer depends on what the business is expected to become.

Starting a business in Portugal: what should you decide first?

Before registering anything, try to answer three questions.

• What type of business are you building?
• Where will you personally live while operating it?
• How will you receive income from the business?

Those answers can influence almost everything that follows, from company structure and immigration to personal tax residency and accounting.

Portugal gives foreign entrepreneurs several ways to establish and operate a business. The important part is not simply getting the company registered. It is making sure the structure fits what you are planning to do.