Portugal is steadily becoming one of the most attractive countries in Europe for entrepreneurs. With a welcoming business climate, strategic location, and streamlined processes for setting up a company, it offers a promising environment for both local and international investors. This guide outlines everything you need to know to start a business in Portugal in 2025, from legal requirements to practical steps you can take to launch with confidence.

Why Choose Portugal for Your Business?

The Portuguese government has made it easier than ever to establish a business. The country offers a blend of economic stability, access to the EU single market, and a fast-growing digital infrastructure that supports startups and SMEs. Cities like Lisbon, Porto, and Braga are home to vibrant innovation hubs, co-working communities, and investment networks that foster new business ideas. Portugal’s corporate tax structure is competitive, and specific tax incentives are available for innovation, internationalization, and employment creation. Add to that a high quality of life, mild climate, and an increasingly English-speaking workforce, and you have a powerful recipe for success.

Choosing the Right Legal Structure

Before you can register your business, you’ll need to decide on the legal form it will take. The most popular structure for small and medium-sized businesses is the Sociedade por Quotas, or LDA. This is a private limited liability company that allows one or more shareholders and provides financial separation between personal and business assets. For larger operations or those looking to scale through external investors, the Sociedade Anónima, or SA, is more appropriate. This structure allows for public or private shareholding and is often used by corporations. For solo entrepreneurs, the Sole Trader format (Empresário em Nome Individual) is available, though it offers no separation between personal and business liability.

Getting Your Portuguese Tax Number (NIF)

One of the first steps for any entrepreneur is obtaining a Portuguese tax number, known as a NIF (Número de Identificação Fiscal). This number is essential for signing contracts, opening a bank account, or registering a company. If you're a foreign national, you will also need to appoint a tax representative in Portugal, typically a certified accountant or legal advisor. This person will ensure that your tax affairs are properly handled and that you receive notifications from Portuguese tax authorities.

Reserving Your Company Name

A unique business name sets the foundation for your brand identity. In Portugal, names must be approved and registered through the Instituto dos Registos e do Notariado (IRN). You have the option of submitting a custom name request or selecting a pre-approved name from the government’s official list. While choosing a pre-approved name can speed up the registration process, opting for a customized name may give your brand a stronger market presence and legal protection.

Registering the Company

Once your name is secured, you can move forward with the official company registration. Portugal offers two options: you can register online through the Empresa Online platform or visit an Empresa na Hora office for in-person registration. The online process is user-friendly and convenient, especially for residents or business owners familiar with the Portuguese language. However, many foreign founders prefer in-person support to ensure that documents are correctly filed. During registration, you’ll need to submit identification documents for all shareholders, provide your NIF, supply the company’s articles of association, confirm the business address, and show proof of your share capital deposit.

Setting Up a Business Bank Account

After registering your company, the next step is to open a corporate bank account in Portugal. You’ll be required to present the company registration certificate, NIF, identification of all company members, and proof of the company’s registered address. Most banks in Portugal offer modern online banking tools, and some even provide English-speaking support teams. It’s important to choose a financial institution that aligns with your business needs, especially if you anticipate frequent international transactions.

Meeting Tax and Social Security Requirements

Newly registered businesses in Portugal are obligated to register for Social Security within 30 days of starting activity. This step is crucial to ensure compliance with employment laws and to contribute to the national welfare system. Depending on the nature and scale of your business, you may also be required to register for VAT (known locally as IVA). Businesses that anticipate annual revenue above €13,500 or that provide services subject to VAT must complete this registration. Failing to meet these deadlines can lead to fines and complications with the tax authority, so it’s advisable to handle these obligations early.

Fulfilling Ongoing Accounting and Reporting Duties

Every business in Portugal must follow strict accounting rules as outlined by the Portuguese Tax Authority. This includes maintaining digital financial records, submitting periodic tax declarations, and preparing annual financial statements. The use of certified accounting software and the support of a licensed accountant are essential. Accurate reporting not only keeps your business in good legal standing but also helps you monitor growth and financial health. At FreeAcing, we provide certified accounting services designed to simplify this process and ensure full compliance with Portuguese laws.

Special Considerations for Foreign Entrepreneurs

If you are not a resident of Portugal, there are additional steps to consider. You’ll need a valid passport or EU national ID, a registered business address within Portugal (physical or virtual), and potentially a visa depending on your nationality. Many non-EU entrepreneurs apply for the D2 Visa, designed specifically for individuals who want to invest or start a business in Portugal. Our team at FreeAcing can guide you through the visa application and all necessary documentation to help you establish a presence in the country with ease.

Growing Your Business in Portugal

Starting a business is only the beginning. Portugal’s business landscape offers multiple growth pathways through local incubators, international trade programs, and government grants. Developing partnerships with local service providers, participating in business events, and investing in digital marketing can accelerate your success. Choosing the right advisors from day one will help you stay focused on your goals while minimizing risk and administrative hassle.

Ready to Start Your Business in Portugal?

At FreeAcing, we support entrepreneurs from the initial idea to full business launch and beyond. Whether you need help creating your company, managing accounting, or navigating compliance, our bilingual team is here to guide you every step of the way. Our experience in working with international founders ensures that your business gets off to a strong and sustainable start.

Let’s build your future in Portugal—together.
Contact us today to schedule your free consultation.