Company registration in Portugal

The Portuguese Republic is located in the western part of the Iberian Peninsula. The capital is Lisbon. From the south and west, Portugal is washed by the Atlantic Ocean, and in the east and north, its borders converge with Spain. Portugal also includes the Madeira archipelago and the Azores, located in the Atlantic Ocean.

In terms of doing business, Portugal is considered one country with special conditions for this. According to experts, the Portuguese jurisdiction offers the most promising ground for business development in comparison with other European states. This is due to the fact that the conditions for organizing activities in this country are simpler than in others.

In addition, it should be noted that the Portuguese market is currently holding slightly behind the European one, which opens up wide horizons for future growth. In addition, the low rate of decline in the number of unemployed citizens and the high level of unemployment in general, forces the government to attract foreign investment in every possible way and in order to ensure the creation of new jobs.

The main reasons why registering a company in Portugal is beneficial for entrepreneurs:

• convenient conditions for doing business and developing your own business;
• the government encourages foreign investment in various ways;
• low rates for the taxation system.

Business registration forms in Portuguese jurisdiction

To register a company in Portugal, the following organizational and legal forms are mainly chosen:

• Sociedade anonima/Sociedade Aberta SA. This is an analogue of a closed joint-stock company or a joint-stock company. This form is mostly used by large organizations.
• Sociedade Limitada Lda. Similar to LLC. This form is the most common.

Key points of the LDA registration process in Portugal

• The company must hire 1 director. In general, the firm must have at least two members.
• Members of the Portuguese Lda are not owners of shares, but holders of shares in the capital of the company.
• The members of the company are liable for the financial obligations of the company in an amount proportional to their shares.
• Capital must be paid in full by the end of the first fiscal year.
• The size of the minimum authorized capital for the Portuguese Lda has not been established, however, the value of each of the quotas must be at least one euro.
• The company is allowed to issue only registered shares.
• Lda is managed by one director.

Key points of the SA registration process in Portugal

• The firm must have at least five members.
• As for the authorized capital, it is not fixed. The amount depends on the field of activity of the company, but the amount of capital must be at least 50 thousand euros.
• Upon registration, 30% of the total amount of the authorized capital is paid directly. The remaining 70% is payable for a maximum of the next 5 years.
• Companies are allowed to issue bearer and registered shares. In addition, the firm can issue common and preferred shares.
• Portuguese SA is managed by a Board of Directors.
• This organizational and legal form is required to create a reserve fund, which would be 20% of the company’s capital. As the fund is formed, at least 5% of the profit received must be allocated to it annually.
• The company’s registrar is required to approve the SA Articles of Association and the prospectus.

Accounting statements in Portugal

A company in Portugal, regardless of its organizational and legal form, must submit an annual audit report based on the results of its activities. The organization shall appoint a public auditor if, for two consecutive years from the date of registration of the company, two of the three conditions listed below are met:

• net assets account for EUR 1.5 million or more;
• the company’s revenues amount to 3 million euros or more;
• for the year, the average number of employees of the company was at least 50 people.

Tax system

Portugal has a flat tax rate for companies, excluding offshore zones. This rate is equal to 25%. Among other taxes, the following apply:

• interest – 25%;
• rental income – 15%;
• royalties – 25%;
• payment of winnings – 25-35%;
• dividends – 25%;
• added value – 23%;
• payments for services – 15%.

Each of the tax levies must be paid in advance payments on a quarterly basis, that is, 4 times a year.

You can purchase a company or register it in Portugal whenever you want. We will do everything for you. By registering a company in Portugal, you will discover the path to successful commercial activities and stable profits. You can contact our company for help – one of the most important areas of our work is the registration of organizations, and offshore in particular.

You can learn more about offshore companies in Portugal, especially Madeira, by talking to our lawyer.