Starting Your Business in Portugal: A Guide for Expats

Published on October 2, 2025 and written by Cyril Jarnias

Portugal has become a top destination for expatriate entrepreneurs looking to start their business abroad. With its favorable economic environment, high quality of life, and attractive tax incentives, the country offers numerous opportunities for international entrepreneurs. In this comprehensive guide, we will explore the essential steps to start your business in Portugal as an expatriate.

Understanding the Business Environment in Portugal

Before diving into starting a business in Portugal, it’s crucial to thoroughly understand the country’s economic and entrepreneurial context.

A Dynamic Entrepreneurial Ecosystem

Portugal has undergone a remarkable transformation of its entrepreneurial ecosystem over the past decade. The country is now recognized as one of Europe’s most dynamic technology hubs, attracting numerous startups and international entrepreneurs. Cities like Lisbon and Porto have become innovation centers, offering an environment conducive to creating and developing innovative businesses.

Attractive Tax Incentives

One of Portugal’s main advantages for expatriate entrepreneurs is its favorable tax regime. The country notably offers the Non-Habitual Resident (NHR) status, which provides significant tax benefits to new residents for a 10-year period. This regime can allow for reduced tax rates on certain foreign-source income, which can be particularly interesting for international entrepreneurs.

High Quality of Life

Beyond purely economic aspects, Portugal offers exceptional quality of life that appeals to many expatriates. The pleasant climate, relatively low cost of living compared to other European countries, cultural richness, and the country’s safety are all factors that contribute to its attractiveness for foreign entrepreneurs.

Choosing the Right Legal Structure

Choosing the legal structure is a crucial step in starting your business in Portugal. There are several options, each with its advantages and disadvantages depending on your activity and objectives.

Sociedade por Quotas (Lda) – Limited Liability Company

This is the equivalent of the French SARL and one of the most popular legal forms for small and medium-sized businesses in Portugal. It has the following characteristics:

• Minimum share capital: 1 euro per partner
• Minimum number of partners: 1 (Single-Member Limited Liability Company) or 2
• Liability limited to the amount of contributions
• Relatively simple incorporation formalities

Sociedade Anónima (SA) – Public Limited Company

This structure is generally chosen for large companies or projects requiring significant investments. Its main characteristics are:

• Minimum share capital: 50,000 euros
• Minimum number of shareholders: 5
• Liability limited to the amount of contributions
• More complex structure with a board of directors

Empresário em Nome Individual – Sole Proprietor

This option is suitable for entrepreneurs wishing to conduct business in their own name. It has the advantage of great administrative simplicity but involves unlimited liability on the entrepreneur’s personal assets.

Branch or subsidiary of a foreign company

For entrepreneurs already established abroad, it’s possible to open a branch or subsidiary in Portugal. This option can be interesting for testing the Portuguese market before establishing a permanent presence.

Administrative Procedures for Starting Your Business

Once the legal structure is chosen, you’ll need to follow several administrative steps to formalize the creation of your business in Portugal.

1. Obtain a tax identification number (NIF)

The Número de Identificação Fiscal (NIF) is essential for any administrative procedure in Portugal. As an expatriate, you can obtain it from the Portuguese tax authorities (Finanças) or in some cases, through a fiscal representative.

2. Choose a name for your business

You’ll need to check the availability of your chosen business name with the Registo Nacional de Pessoas Coletivas (RNPC). It’s possible to reserve a name for a period of 3 months.

3. Draft the company statutes

The statutes define the operating rules of your business. They must be written in Portuguese and may require notary intervention depending on the chosen structure.

4. Open a professional bank account

You’ll need to open a bank account in your company’s name to deposit the initial share capital.

5. Register with the Commercial Registry

Registration with the Registo Comercial formalizes the creation of your business. This procedure can be done online via the Empresa Online portal or physically at a registration office.

6. Obtain a social security number

Your business will need to register with Portuguese Social Security to be able to hire employees and pay social contributions.

7. Register with the tax authorities

You’ll need to declare the start of your business activity to the Portuguese tax authorities.

Tax Considerations for Expatriate Entrepreneurs in Portugal

Taxation is a crucial aspect to consider when starting your business in Portugal as an expatriate. The Portuguese tax system has certain particularities that are important to understand well.

Corporate tax (IRC)

The standard corporate tax rate in Portugal is 21%. However, there are reduced rates for SMEs and specific tax incentives in certain regions or business sectors.

VAT

The standard VAT rate in Portugal is 23%, with reduced rates of 13% and 6% for certain goods and services.

Non-Habitual Resident (NHR) Regime

This special tax regime can offer significant benefits to expatriate entrepreneurs. It notably allows for a reduced tax rate of 20% on certain income from activities considered “high value-added” for a 10-year period.

International tax treaties

Portugal has signed tax treaties with many countries to avoid double taxation. It’s important to understand these agreements well to optimize your tax situation as an expatriate entrepreneur.

Reporting obligations

As an entrepreneur in Portugal, you’ll have various reporting obligations to comply with, notably the annual corporate tax return (Modelo 22) and the simplified business information declaration (IES).

Funding Your Entrepreneurial Project in Portugal

Funding is often a major challenge for expatriate entrepreneurs. Fortunately, Portugal offers various options to finance your business project.

Equity and love money

Personal investment often remains the first source of funding for many entrepreneurs. “Love money,” meaning funds from family or friends, can also be an option to start your activity.

Bank loans

Portuguese banks offer different types of business loans. As an expatriate, obtaining a loan can sometimes be more complex, but remains entirely possible with a solid application.

Grants and subsidies

Portugal offers various grants and subsidies to encourage entrepreneurship and innovation. Programs like Portugal 2020 or the Programa Operacional Competitividade e Internacionalização (COMPETE 2020) can offer interesting funding opportunities.

Venture capital and business angels

Portugal’s startup ecosystem is dynamic, with many venture capital funds and active business angel networks in the country. These investors can not only bring funds but also valuable networks and expertise.

Crowdfunding and participatory financing

Crowdfunding platforms have developed in Portugal in recent years, offering an interesting alternative for innovative projects or those with strong social impact.

Incubators and accelerators

Portugal has numerous incubators and accelerators that can offer financial, logistical, and strategic support to startups. Programs like Startup Lisboa or UPTEC in Porto are particularly renowned.

Understanding Cultural Differences in Business Practices

The success of your business in Portugal will largely depend on your ability to understand and adapt to local business practices. Here are some key points to keep in mind:

The importance of personal relationships

In Portugal, personal relationships play a crucial role in business. Taking the time to build trust-based relationships with your partners, clients, and suppliers is essential.

Hierarchy and respect

The hierarchical structure is generally more marked in Portuguese companies than in some Anglo-Saxon countries. Respect for titles and positions is important.

Indirect communication

Portuguese people tend to prefer more indirect and diplomatic communication. It’s important to be attentive to nuances and context in professional exchanges.

Time flexibility

Although things are evolving, it’s common for meetings or deadlines to be treated with some flexibility in Portugal. It’s important to adapt to this rhythm while remaining professional.

The importance of networking

The professional network is particularly important in Portugal. Participating in networking events, trade shows, or entrepreneur associations can greatly facilitate your integration into the local ecosystem.

Resources and Support for Expatriate Entrepreneurs in Portugal

Numerous resources and support structures are available to help expatriate entrepreneurs succeed in establishing themselves in Portugal.

Chambers of commerce

Bilateral chambers of commerce, like the Luso-French Chamber of Commerce and Industry, offer valuable support to expatriate entrepreneurs, particularly in terms of networking and market information.

Expatriate entrepreneur associations

Associations like International Entrepreneurs in Portugal (IEP) or the Association of French Entrepreneurs and Business Leaders in Portugal (AEDEP) allow you to meet other expatriate entrepreneurs and share experiences.

Government agencies

AICEP (Agency for Investment and Foreign Trade of Portugal) and IAPMEI (Agency for Competitiveness and Innovation) offer support and information services for foreign investors.

Incubators and coworking spaces

Many incubators and coworking spaces in Portugal welcome international entrepreneurs, offering not only workspaces but also access to valuable networks and resources.

Specialized consultants

There are many consulting firms specialized in supporting expatriate entrepreneurs in Portugal, offering services ranging from business creation to tax and accounting management.

Acceleration programs

Programs like Lisbon Challenge or BGI Accelerator offer intensive support to startups, including those founded by expatriate entrepreneurs.

Starting your business in Portugal as an expatriate is an exciting adventure that offers numerous opportunities. With adequate preparation, a good understanding of the local environment, and the use of available resources, you can transform your entrepreneurial project into a success in the Portuguese market.

Remember that each entrepreneurial journey is unique and that flexibility and adaptability will be your best assets to navigate this new environment. With its exceptional quality of life, dynamic entrepreneurial ecosystem, and attractive tax benefits, Portugal offers fertile ground for expatriate entrepreneurs ready to take on the challenge.