Portugal offers several ways to establish a business, from freelance activity to limited liability companies and subsidiaries. The choice depends on whether the founder is acting alone, working with partners, expanding an existing foreign company, or using the business as part of a Portuguese residence strategy.
Why Portugal is considered for business
Portugal is presented as a favorable jurisdiction for entrepreneurs because of its business environment, startup laws, startup visa, tech visa programs, English-speaking population, tax incentives, and access to the European market.
Portugal can also be used as a relocation destination for business owners who want to live in the country while operating their company.
Main business structures in Portugal
Portugal offers several structures for starting a business.
Freelancer
A person can start an activity in Portugal as a freelancer without incorporating a company. This means the person operates individually and issues invoices through the Portuguese system.
This can be suitable at the beginning of a business activity. The transcript suggests that when income reaches around €30,000–€40,000, it may be time to consider incorporating a company.
Freelancers may need to choose the appropriate tax/accounting regime, such as the simplified regime, depending on income and costs. The transcript does not provide detailed tax rules for freelancers.
Unipessoal LDA
A Unipessoal LDA is a one-person limited liability company. It is designed for a solo founder who wants to operate without partners.
Its main advantage is limited liability protection: personal assets are separated from company assets. If the business has problems, the founder’s personal belongings are generally protected.
This structure is described as popular for the D2 visa and startup-related projects because it is straightforward and flexible. Additional shareholders can be added later if the business grows.
LDA
An LDA is the Portuguese equivalent of a limited liability company. It is one of the most common company structures in Portugal and is suitable for two or more shareholders.
Key features include:
- Simple management structure
- No complex board of directors required
- Limited liability
- Minimum legal capital of €1 per shareholder
- Practical recommendation of around €5,000 to cover initial operating expenses
An LDA can have one or more shareholders, and shareholders may be foreigners. Portuguese citizenship is not required.
A shareholder or manager does not need to be resident in Portugal. A person living in the U.S., Australia, or another country can open and manage a Portuguese company remotely.
SA
An SA is designed for larger-scale businesses with multiple investors or more complex structures.
Requirements include:
- Minimum share capital of €50,000
- At least 30% paid up at incorporation
- Appointment of a statutory auditor
Unless a business is significantly scaled, the transcript suggests that an SA may not be the most practical structure.
Subsidiary
A subsidiary is used when an existing foreign company wants to establish a presence in Portugal.
In this model, the foreign company is the shareholder of the Portuguese company. The Portuguese subsidiary is a separate legal entity with its own contracts, employees, and operations.
The foreign parent company has limited liability. If something goes wrong with the Portuguese subsidiary, it does not automatically affect the parent company.
A subsidiary may be suitable for tech, industrial, or service companies looking to enter the European market.
Company incorporation process
The company formation process can be handled remotely through a power of attorney.
Step 1: Portuguese tax number
The first step is obtaining a Portuguese tax number, known as a NIF, for every shareholder and manager.
The NIF is needed to sign contracts, open bank accounts, and carry out official actions in Portugal.
A NIF can be obtained remotely through a power of attorney. The timeline mentioned is usually 7 to 10 working days after submitting the required documents.
Step 2: Registration of a foreign corporate shareholder
If a foreign company will be the shareholder of the Portuguese company, the foreign company must first be registered in Portugal and obtain its own Portuguese tax number, the NIPC.
This applies to subsidiary structures.
The process typically requires a certificate of good standing from the foreign company’s home country, confirming that the company exists.
If the shareholders are individuals rather than a foreign company, this step is not needed.
Step 3: Company name approval
Portugal offers two options for the company name.
The first option is to choose a custom name. The name is submitted to the relevant authority, which checks whether it is unique and not too similar to an existing company. This process usually takes around five working days, although approval may sometimes be immediate.
The second option is to use a pre-approved name from an official list. This is faster but may not match the founder’s preferred branding.
The transcript distinguishes between:
- Legal name: the official company name used in contracts, invoices, and government documents.
- Commercial name: the brand name used for customers, marketing, and websites.
Step 4: Company registration
After the name is approved, incorporation documents are prepared. These include details such as:
- Approved company name
- Corporate purpose
- Share capital
- Managers
- Registered address
The registration can be done remotely using a power of attorney.
There are two timelines:
- Standard process: around two months
- Premium process: around one week, sometimes faster, with higher government fees
The premium process is often used when the founder wants the company operational quickly.
Step 5: UBO declaration
After the company is registered, the Ultimate Beneficial Owner declaration must be submitted.
This identifies who ultimately owns and controls the company. It is mandatory under Portuguese law and part of wider European transparency rules.
The transcript states that this is usually handled within 24 to 48 hours after company registration.
Step 6: Corporate bank account
Opening the corporate bank account is often the longest step because it depends on the bank’s compliance procedures.
Portugal offers both digital and traditional bank options.
Traditional banks may take longer and may require the manager to appear in Portugal in person. A hybrid approach is suggested: open a digital bank account soon after company registration while pursuing a traditional bank account in parallel.
Documents needed
For shareholders and managers, the basic documents mentioned are:
- Passport
- Portuguese tax number
- Proof of address, such as a bank statement from the home country
The transcript states that notarized or apostilled documents are usually not required in most cases.
For a foreign company shareholder, a certificate of good standing is needed.
Registered office and virtual office
A company does not need a physical office in Portugal, but it must have a registered office address.
A registered office is the company’s legal domicile. It does not need to be the place where the business actually operates.
A virtual office can be used as the company’s registered address. The transcript mentions a Lisbon address and receipt of official correspondence as part of this service.
Compliance after incorporation
After registration, a Portuguese company has ongoing obligations.
Certified accountant
Every Portuguese company must have a certified accountant. This is mandatory.
The accountant maintains the accounting records and prepares and submits annual financial statements.
Social security
If the company has employees, it must pay social security contributions.
The transcript also states that if a person is the director of a Portuguese company and does not earn any salary elsewhere in the European Union, they are obliged to have salary deducted in Portugal. Social security of 30% on top of the salary was mentioned.
Corporate updates
Changes must be reported and registered, including:
- New shareholders
- Change of address
- New managers
- Share capital increases
The commercial registry must be kept updated, and specific timelines apply.
Corporate taxation overview
The transcript gives a brief overview of Portuguese corporate tax.
A reduced rate applies to the first €50,000 of income. For 2026, this reduced rate is 16%.
After the first €50,000, the standard rate is stated as 19% for 2026.
The transcript states that the Portuguese government intends to reduce the standard rate further:
- 2026: 19%
- 2027: 18%
- 2028: 16%
Dividends distributed from the company to shareholders are taxed separately. The dividend rate mentioned is 20%, although tax benefits may reduce the rate if specific requirements are met.
Business-related visa options
Several visa routes are connected to business or work in Portugal.
D2 visa
The D2 visa is the main business visa discussed. It can apply to people who incorporate a Portuguese company or operate as freelancers.
For a business founder, the first step is incorporating the company. The applicant then applies for the visa in their country of origin, later converts it into a residence permit in Portugal, and may then become a Portuguese tax resident.
The main requirements discussed are:
- A Portuguese company or freelance activity
- A business plan showing intent to establish and grow a business in Portugal
- An individual Portuguese bank account
- Approximately €12,000 deposited for the main applicant
If the applicant brings a spouse or children, the required funds increase.
The transcript emphasizes that applying for this visa means committing to live in Portugal. The residence requirement mentioned is six consecutive months or eight non-consecutive months in Portugal.
A person who already has another residence visa, such as a D7 or D8, can still establish a company in Portugal. The company does not need to be directly connected to the visa type.
Startup visa
The startup visa is for projects with more substance and innovation.
The project must be submitted to an accelerator or incubator in Portugal and reviewed by a public entity. Approval can lead to a visa and later a residence permit.
D8 digital nomad visa
The D8 visa is for freelancers or employees working remotely for foreign entities.
The key difference from the D2 visa is that the D8 is based on foreign employment or foreign clients, while the D2 is based on business activity in Portugal.
The income requirement is described as around four times the Portuguese minimum wage.
The applicant must prove foreign employment or foreign client relationships.
D1 and D3 work visas
The D1 visa is a work visa for people with an employment contract from a Portuguese company. There is no special salary threshold mentioned beyond the ability to earn at least the Portuguese minimum salary.
The D3 visa is for highly qualified workers. It also requires an employment contract with a Portuguese company, but the applicant must have a degree and a higher salary. The salary mentioned was approximately €2,600, though the speaker was uncertain on the exact figure.
The D3 process was described as faster, with part of the visa process potentially granted in 30 days.
Freelance activity and visa choice
A person can operate in Portugal as a freelancer and may use this structure for a D2 visa.
For example, a self-employed massage therapist in the UK could potentially move to Portugal, register as a freelancer, and apply under the D2 route if the requirements are met.
A person working for a UK company without a remote contract could potentially create a Portuguese activity or company, invoice the UK company from Portugal, and consider the D2 route. The correct structure depends on the income, contracts, and tax/accounting analysis.
Citizenship pathway
The transcript states that Portugal currently allows citizenship applications after five years of residence, but the government is discussing extending this period to 10 years.
During the first five years, a person would hold temporary residence permits. After five years, they may apply for permanent residence, even if the citizenship timeline changes.
The transcript emphasizes that visas can still provide a residence pathway even if citizenship rules are amended.
Practical takeaway
Portugal allows business formation by foreigners, including fully remote incorporation and foreign-owned companies. The most common structure is an LDA, while freelancers can start without a company and foreign companies can use a subsidiary.
The key planning questions are:
- Whether to start as a freelancer or incorporate a company
- Whether the activity supports a D2, D8, D1, D3, or startup visa
- Whether the founder will live in Portugal and meet residence requirements
- Whether a digital or traditional bank account is needed
- Whether accounting, social security, and corporate update obligations are planned from the start
A company can be created quickly, but the business is not complete without a tax number, registered address, UBO declaration, bank account, certified accountant, and ongoing compliance.
