Set Up Business in Portugal

Portugal Expansion Guide

Global Upside helps companies set up, hire, and operate in Portugal. Set up a legal entity quickly and easily with our solutions for branch, subsidiary, and rep office. Looking for an alternative to permanent establishment? Hire and pay employees in Portugal without a legal entity by using our PEO & employer of record services. Once your business is set up, our teams can support with recruitment and staffing, human resources, employee benefits, payroll, accounting, and tax.

Capital City



Euro (€)




Representative Democracy

Country Overview

Situated in the Iberian Peninsula, Portugal’s economy has been mostly dominated by services. While manufacturing comprises a substantial share of output, agricultural output is relatively lesser. Economic growth had improved living standards in the early 21st century with raised incomes and reduced unemployment.

  • Portugal ranks as the 49th largest economy in the world in terms of nominal GDP.
  • Portugal is the 20th largest economy in the EU.
  • Portugal is one of the leading exporters of tungsten.

Portugal ranks as the world’s 25th best country for business.

Options for setting up a legal entity in Portugal include:

Private Limited Liability Company (LDA)

A private limited liability company (LDA) requires at least 1 investor and the minimum share capital is €1. It requires to be one or more directors who will manage and represent the organization.

Joint Stock Company (SA)

A Joint Stock Company (SA) is a form of an entity set up that requires a minimum of 5 investors if the company is not a sole investor.

Limited Liability Partnership (Sociedade em Comandita)

A Limited Liability Partnership (Sociedade em Comandita) is an establishment that can operate in its own name, gaining rights and acquiring liabilities. One partner is subject to unrestricted personal liability concerning the partnership’s obligations, while the other partners’ liability is restricted to the amount of the share capital taken up.

Partnership Company (Sociedade em nome Colectivo)

A Partnership Company (Sociedade em nome Colectivo) is an establishment that can operate in its own name, gaining rights and acquiring liabilities. However, besides the company’s assets, the investors’ assets may also be asserted by beneficiaries for the payment of company deficits.

It takes approximately 2 to 3 weeks to establish a legal entity set up in Portugal.

The primary sources of employment law are the:

  • Portuguese Constitution
  • European Legislation
  • Portuguese Employment Code (Law No.7/2009 of 12 February 2009)
  • Regulation of the Employment Code (Law No.105/2009 of 14 September 2009)

The terms that need to be stipulated in a Portuguese employment contract are:

  • Name and address of employer
  • Job location
  • Job description
  • Contract date and period
  • Annual leaves
  • Termination policy and notice period
  • Remuneration
  • Working hours
  • Collective bargaining agreement (if applicable)

The payroll frequency is monthly in Portugal and there 14 salaries in addition to 12 months, holidays, and Christmas allowances.

Being a member of the European Union (EU), Portugal is subject to the accounting, assessing, and financial reporting prerequisites ratified in EU Regulations and Directives as rendered into national laws and guidelines. The Decree-Law No. 98/2015 Código das Sociedades Comercias, also called the Companies Code, drafts the fundamental accounting standards in all business establishments and necessitates organizations to maintain accounting reports and prepare annual financial statements.

Corporate Tax

The corporate tax rate in Portugal is 21%.

Value Added Tax (VAT)

The standard VAT rate is:

Portugal: 23%; Intermediate: 13%; Reduced: 6%.

Madeira: 22%; Intermediate: 12%; Reduced: 5%.

Azores: 18%; Intermediate: 9%; Reduced: 4%.

The Portuguese Law No. 58/2019 of 8 August, known as the Data Protection Law, regulates personal data processing in Portugal.

Anti-Bribery & Anti-Corruption Law

The Portuguese Criminal Code has stipulated bribery and corruption in:
• Article 372 (Unlawfully Receiving an Advantage)
• Article 373 (Passive Corruption)
• Article 374 (Active corruption)

1. Bribery of Officials:

For Individuals:
i) Imprisonment for up to 8 years
ii) Monetary fine
iii) Confiscation of advantages received
iv) Exclusion from public procurements tenders

For Businesses:
i) Monetary fine
ii) Confiscation of advantages received
iii) Exclusion from public procurements tenders