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In recent years, Portugal has emerged as a thriving hub for entrepreneurs and businesses looking to establish a presence in Europe. The country’s strategic location, favourable business environment, and a slew of incentives make it an attractive destination for setting up an entity, particularly for online brands. If you’re considering expanding your business or launching a new venture, this guide will provide you with valuable insights on how to set up an entity in Portugal for your online brand, the benefits of doing so, the types of legal structures available, and the steps involved, including the specific considerations for non-residents. Ready to dive in? Let’s go!
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How to Set up an Entity in Portugal
Setting up an entity in Portugal for your online brand involves a series of steps, and understanding the process is crucial for a smooth and successful establishment. Here’s a step-by-step guide on how to go about it:
1. Define Your Business Structure
Before you dive into the process, it’s essential to determine the most suitable legal structure for your business. Portugal offers several options, each with its own set of advantages and requirements. The most common business structures in Portugal include:
• Limited Liability Company (Sociedade por Quotas, LDA): If you have a small to medium-sized business, setting up an LDA might be a good choice for your online brand. It offers limited liability to shareholders and can be established with a minimum share capital, which in Portugal is 1€.
• Sole Shareholder LLC (Sociedade Unipessoal Por Quotas): This is the same as a regular LLC, but it only has one shareholder, which can be a natural person or a foreign company.
• Branch Office (Sucursal): If you have an existing foreign company and want to expand into Portugal, you can set up a branch office. This type of business structure operates as an extension of your parent company and is subject to the same regulations.
• Public Limited Company (Sociedade Anónima, SA): SA is ideal for larger businesses looking to raise capital through the stock market. This type of business structure requires a higher minimum share capital (50,000 €) and is subject to more extensive regulations, and the number of statutory members, among other specificities.
If you still need some clarification about which type of company is best for you, our team of legal whizzes are eager to help by showing you the implications of each structure. Together we can navigate the best path forward when setting up an entity in Portugal for your online brand.
2. Register Your Business
Now you know the right business structure to set up an entity in Portugal for your online brand – great! Next, we’ll register your entity with the relevant Portuguese authorities. This involves the following steps:
• Choose a Business Name and Activity of the Company: First, you should select a unique name for your business. Once you have your winning name, we will verify its availability with the National Registry of Legal Entities (Registo Nacional de Pessoas Coletivas, RNPC), in addition to searching for the activity codes that the company will carry out.
• Obtain a Portuguese Fiscal Number (Número de Identificação Fiscal, NIF): An important step of the process is obtaining an NIF from the tax authorities. This number is essential for tax compliance and conducting business transactions. Remember, all shareholders and managers of your company need an NIF number so you don’t get in trouble!
• Draft the Articles of Association: If you have a Limited Liability Company (LDA) or a Public Limited Company (SA), you’ll need to draft articles of association outlining the company’s structure, purpose, and governance. These documents must be notarized.
• Submit Registration Documents: You’re almost there! The next step is to prepare and submit all necessary documents to the Commercial Registry Office (Conservatória do Registo Comercial.)
• Registration of the Ultimate Beneficial Owner: This is a mandatory step you should be aware of. All entities incorporated in Portugal need to register the ultimate beneficial owner. The reason is to identify all the people who control the company.
• Open a Business Bank Account: Now, you should open a dedicated business bank account in Portugal so you can manage your finances and transactions efficiently. Also, once you open this account, this is where the company’s share capital must be deposited.
• Obtain Necessary Licenses and Permits: Ensuring full compliance via obtaining the right licenses and permits is pivotal. The nature of your business dictates the specific licenses you’ll need, from local municipal mandates to health, safety, and environmental standards. It’s vital not only to secure these credentials but also to regularly renew and update them based on business changes.
• Certain business activities may require specific licenses or permits. Important note! Setting up an entity in Portugal for your online brand is no one-size-fits-all approach. Some businesses will require certain licenses and permits. However, our team of legal eagles can research the regulations applicable to your industry and secure any required authorizations. No sweat!
Also, it’s important to keep in mind that in order to comply with Accounting and Reporting Requirements, your company must appoint a certified accountant, who will prepare, for example, the company’s declaration of commencement of activity, in addition to maintaining accurate financial records and file annual financial statements with the Portuguese Commercial Registry and other relevant authorities.
Set up an Entity in Portugal: the Benefits
Now that you have an overview of the process, let’s explore the numerous benefits of establishing an entity in Portugal:
Strategic Location
Do you have big global dreams? Well, you’re in luck. Portugal’s strategic location provides easy access to both European and international markets. It serves as a bridge between Europe, Africa, and the Americas, making it an ideal location for businesses with global ambitions.
EU Membership
Portugal, as a proud member of the European Union (EU), stands as a golden doorway to the world’s most expansive single market. Through this membership, businesses enjoy unhindered movement of goods, services, and capital across the EU. This not only slashes through trade obstacles but also paves a smoother path for business growth. Dive into this advantageous arena, and watch those cross-border operations flourish!
Favorable Business Environment
Portugal has made significant efforts to improve its business environment. With a swift registration procedure, minimized red tape, and policies tailored for investors, the nation rolls out the red carpet for business ventures of all scales. Dive in, and experience a business-friendly oasis!
Competitive Taxation
Portugal offers a competitive tax regime, including tax incentives for certain industries and regions. Moreover, its involvement in double taxation agreements with a vast array of nations significantly reduces the likelihood of international businesses being taxed twice. It’s a win-win for global entrepreneurs and investors!
Skilled Workforce
Portugal has a well-educated and skilled workforce, particularly in sectors like technology, tourism, and renewable energy. Enterprises venturing into the Portuguese market are not just investing in a location but also accessing a goldmine of talent. This wealth of expertise can be a transformative asset, propelling businesses to new heights of innovation and success.
Quality of Life
Portugal shines on the global stage with its enviable quality of life, breathtaking landscapes, and temperate weather. This allure not only makes it a magnet for visitors but also a prime spot for employees. For businesses, this translates to a heightened edge in drawing in and holding onto the crème de la crème of talent.
Supportive Ecosystem
The Portuguese government and various organizations provide support and incentives for startups and foreign investors. They offer a treasure trove of perks ranging from enticing grants and funding options to access to exclusive innovation hubs.
Growing Tech Scene
Lisbon and Porto, in particular, have witnessed a surge in tech startups and a thriving entrepreneurial ecosystem. As Portugal carves its niche in the tech innovation arena, its allure has only intensified. This has made the country a sought-after destination, drawing in a diverse mix of visionary entrepreneurs, forward-thinking startups, and savvy investors from all corners of the globe.
Conclusion:
In conclusion, Portugal’s combination of business-friendly policies, a skilled workforce, a pleasant living environment, and access to European markets makes it a promising destination for entrepreneurs and companies looking to expand their operations.
Whether you’re starting a new venture or relocating an existing one, Portugal has a lot to offer, and with the right strategy and support that we can offer, your business can thrive in this beautiful country called Portugal.
Can Lexidy help me set up an entity in Portugal for my online brand?
Absolutely! Portugal is a wonderful launchpad for your online brand. However, we understand the journey from conception to execution can seem like a maze. Enter your trusty navigator: our stellar legal team.
Armed with expertise and local insight, we’ll walk you through every twist and turn of this exhilarating venture, ensuring you master the nuances of the Portuguese business terrain. Ready to embark? Simply fill out the form below, and our friendly team of English-speaking lawyers will reach out to kickstart this exciting journey!