After the decision to start a business in Portugal and after preparing the Business Plan, the entrepreneur must legally establish a company in Portugal. The bureaucratic procedure is different depending on the type of company.

Sole Entrepreneur

If you choose to be an Individual Entrepreneur, the bureaucratic procedure will only go through four steps: (1) declare the beginning of activity in the Portuguese Tax Office, (2) register as an entrepreneur with the Portuguese Social Security, (3) take out insurance against accidents at work and (4) opening a bank account for business purposes.

Company with only one partner or Private Limited Company

“On-the-Spot Company” Procedure

These companies can be created through a simpler, faster and cheaper procedure called “company on the spot”. The entrepreneur buys a start-up package already pre-registered by the Portuguese Government, in which the name of the company, the company’s internal regulations and the commercial activity to be developed are already established. The entrepreneur will only be able to customize the company after acquiring the pre-registered company, which will incur costs.

Process “Online Company” and “Company created in Notary”

If the entrepreneur chooses to start a company customized to his will and business plan, he must proceed with the following steps:

1 – Request for approval of the company name

The entrepreneur has to request approval of the company name from the public entity that registers the name of companies operating in Portugal. In Portugal, two companies cannot have the same or similar name if they operate in the same area of activity, to prevent the public from getting confused. The approval decision is effective for three months, so the company name is assigned to the entrepreneur who requested approval of that name.

2 – Write the Company’s Bylaws

Bylaws are very important in the Portuguese company. This document establishes the name of the company, the address of the headquarters, the company’s runtime (it can have a pre-defined term or have unlimited runtime), the capital stock and shares, the business activities, who are the partners, who are the managers and its powers, how the increase in stock capital, sale of shares, etc. will work.

Bylaws should be carefully planned to avoid future changes, with associated costs, if any issues have not been included in the Bylaws.

3 – Hire an accountant

All companies in Portugal must have an accountant. The accountant takes responsibility for the entire organization of accounts, communications with the Tax Office, tax returns and payment of taxes.

The accountant must be registered and licensed by the Order of Certified Accountants and there is an official price list to avoid unfair competition.

4 – Signing of the articles of association

This is the official start of the company in Portugal. It can be done online or through a document signed in a Portuguese notary. If the entrepreneur cannot attend or digitally sign this document, the company can be started through a representative with a power of attorney signed by the entrepreneur.

5 – Company Registration

Company registration takes place immediately after signing the articles of association. The company now has a company identification number at the Portuguese Commercial Registry Office. With this registration, the company is officially started, but more bureaucratic steps still have to be done.

6 – Opening a company bank account

Within 5 days from the start of the company, the entrepreneur will have to open a bank account of the company, where he will deposit the value of the stock capital. This amount may be freely used immediately as long as it is used to support the company’s own activity expenses.

7 – opening of the Activity at the Portuguese Tax Office

The company’s accountant must complete the start-up procedure with the Portuguese Tax Office, online, and within a maximum period of 5 days after the company’s registration. This procedure will serve to inform the business activity (income and expenses of the company) and pay taxes.

8 – Social Security Registration Procedure

The accountant must also carry out the procedure for starting the company’s activity in Social Security in order to, in the future, inform and pay the mandatory Social Security contributions.

For more specific types of companies in Portugal, namely companies whose activities require a license from the Portuguese government, there are different and specific procedures.