Creating a business in a new territory like Portugal can be daunting. You must be willing to invest money into starting a business and opening your operating base. Here are some tips on ways you can open a company in Portugal and start an entrepreneurial venture.
Should you open a Company in Portugal?
The process of starting a company in a European country like Portugal has many moving parts. You must register your corporation, create an operating team, and hire staff members. Fortunately, you can consult other former employees for advice on how to get started.
You can also attend seminars or networking events to learn more about the process of starting a business in Portugal. Attending these events will provide you with information on how to find investors and how to hire employees that align with your business goals.
Starting a business requires a business plan and steady cash flow to ensure your company is operational in a sustainable way from day one.
Company vs Freelancer
You will need to be sure that opening a company in Portugal is for you. The difference between freelancing in Portugal and having a company in Portugal is similar to in the UK. A company in Portugal is a separate legal entity and can cost a lot more to run in terms of accounting and business expenses.
Setting up a business or company in Portugal – Choosing set-up method
There are three ways to set up a company in Portugal – two simplified ways (online and on-the-spot) and the traditional method.
- Empresa Online – setting up a business on the online – this allows certain types of Portuguese businesses to be set up and registered online with 1-2 days for a cost of €360. An electronic certificate is necessary. Do this here on the Empresa online website.
- Empresa de Hora – setting up on the spot – sole traders and limited companies can be created in an hour for €360 via this government scheme. All partners should be present along with all necessary documentation and any legal representatives. Follow this link to find out more about setting up using Empresa de Hora here.
- Criacao da Empresa – register via the traditional method. You will need to obtain a certificate of Admissibility from the Institute of Registries and Notaries (IRN) to verify your company name. Then apply for a company card at the IRN. You can then open a business bank account, make an initial cash deposit and declare that you are trading to the local tax office. Finally you can register your business with the Commercial registry office and register as an employer if you will have staff.
Check for Licenses needed
Remember to check whether you need an operational license for your field. In Portugal, some business niches are not allowed to operate unless they are licensed.
As a small business owner in Portugal, you must be cautious of how much cash you are willing to put towards a business’s expenses. You must also consider how much cash your company requires to sustain operations during the first few years of operation. This will help you create a tracking budget that you can adhere to during startup and in your first year of business operation.
Some business set ups such as the Private Limited Company (Sociedade por Quotas) with two directors have a minimum investment requirement – €5000.
Operating in a Cash based society
Portugal is a cash-based society, so you must be prepared to spend a lot of time managing your cash flow and your company’s finances. Whether you create your accounting department or hire employees for the job, you must make time to adjust your accounting department on a daily basis to ensure your business runs smoothly while operating in Portugal.
Portugal is in the European Union and, therefore, shares many similarities with other European countries that are based on European economies. Although differences do exist between the two countries, you can operate your business in a similar way that you would in the United Kingdom or Portugal without incurring additional costs or issues due to language barriers or other barriers that may exist between Portugal and other countries that share similar cultures with Portugal.
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