Setting up a company in Portugal is a relatively quick process, but it involves a chain of steps in which an early mistake, such as a poorly drafted corporate purpose or a shareholder without a NIF, delays everything that follows. This guide walks through the process from start to finish, with attention to the particular issues faced by foreign shareholders.
1. Choosing the type of company
The forms most commonly used by small and medium-sized businesses are:
| Type | Shareholders | Minimum share capital | When it makes sense |
|---|---|---|---|
| Single-member private limited company (Unipessoal Lda.) | 1 | 1 euro | A single owner, limited liability |
| Private limited company (Lda.) | 2 or more | 1 euro per shareholder | Several shareholders, simple structure |
| Public limited company (S.A.) | Generally 5, or 1 if it is a legal person | 50,000 euros | Larger projects or projects with investors |
For most cases, the private limited company (sociedade por quotas, Lda.) is the right choice: shareholders’ liability limited to the capital, flexible management and contained running costs.
Although the legal minimum share capital is symbolic, a very low capital conveys little solidity to banks, suppliers and, in immigration procedures, to the authorities. The amount should be set with the business activity in mind.
2. Prior requirements for shareholders and directors
- Each shareholder and each director needs a Portuguese NIF. For non-resident foreign nationals from outside the EU, this means a tax representative. See our NIF guide.
- Foreign legal entities that are shareholders need a NIF as an equivalent entity and documentation proving their legal existence, apostilled and translated.
- Shareholders do not need to be in Portugal: the company can be formed by power of attorney.
3. Company name
The company name (firma) can be:
- a made-up name, which must be approved by the Registo Nacional de Pessoas Coletivas (the National Registry of Legal Persons) by means of a certificate of admissibility; or
- a name from the pre-approved list, under the Empresa na Hora (On-the-Spot Company) or Empresa Online schemes, which is quicker but less distinctive.
The certificate of admissibility takes a few days and is valid for a limited period.
4. Corporate purpose and CAE
The corporate purpose (objeto social) is the description of the business activity in the articles of association. It should be drafted for the actual activity, clearly and specifically. Copying the generic description of the CAE codes is a frequent mistake that can lead to requests for clarification and, in certain residence procedures, to refusals on the grounds of “non-specialised activity”.
The CAE codes (economic activity codes) are chosen in parallel and are used by the tax office and Social Security.
5. Articles of association
The articles of association (pacto social, the company contract) set out the share capital, shareholdings, registered office, corporate purpose, management and how the company is bound. You can use a simplified template or bespoke articles. With more than one shareholder, it is worth including rules on the transfer of shares, resolutions and the exit of shareholders, to avoid future deadlock.
6. Commercial registration
The company can be formed:
- through Empresa na Hora, in person at a commercial registry office, with a name from the list and standard articles, completed on the same day;
- through Empresa Online, on the Ministry of Justice portal, with a digital certificate;
- by private document drawn up by a lawyer and registered at the registry office, which allows bespoke articles and a made-up name.
Whichever route is taken, the result is entry in the commercial register and the issue of the certidão permanente (permanent certificate of registration), the document that proves the company exists and identifies its directors.
7. Obligations immediately after registration
- Registo Central do Beneficiário Efetivo (RCBE), the central register of beneficial owners: a declaration of the individuals who control the company, within 30 days. Without the RCBE the company cannot, for example, open a bank account or execute deeds.
- Declaration of start of activity with the tax office, within 15 days, including the VAT and IRC (corporate income tax) framework.
- Certified accountant: compulsory for companies.
- Company bank account and deposit of the share capital, where this was not done beforehand.
- Registration with Social Security of the company and its directors.
- Complaints book, licences or prior notifications, depending on the activity.
8. Costs and timeframes
Registration fees vary according to the route chosen and whether bespoke articles are used. On top of these come the cost of the certificate of admissibility, where requested, and the lawyer’s and accountant’s fees. With the shareholders’ documents ready, a private limited company is normally formed and registered within one to two weeks, including the RCBE and the start of activity.
How we can help
We form the company from end to end: structure, name, articles of association written for the actual business activity, registration, RCBE and start of activity, and we handle the NIF and tax representation of foreign shareholders. See our company formation in Portugal service or contact us.
This article is for general information and is not legal advice on your specific case.