How to Start a Business in Portugal: A Step-by-Step Guide for Foreign Entrepreneurs
Starting a business abroad is a bold and exciting decision. According to the World Bank’s Doing Business Report, Portugal ranks among the top 40 countries for ease of doing business, making it an attractive option for foreign entrepreneurs. This guide outlines the essential steps, legal requirements, and practical tips to successfully start and run a business in Portugal as a non-resident.
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1. Understand the Portuguese Business Environment
The Portugal D8 Visa, formally known as the Residence Visa for Remote Workers, was launched in October 2022. It is tailored for non-EU citizens who work remotely for companies or clients located outside of Portugal. Unlike traditional visas, the D8 caters specifically to the modern reality of digital careers. Applicants are not required to invest significant capital or establish a local business, making it more accessible to a wide range of professionals.
The visa grants an initial two-year residency, renewable for an additional three years. After five years, holders may apply for permanent residency or Portuguese citizenship, offering a potential pathway to EU citizenship.
Requirements for the D8 Visa in 2025
Portugal offers a stable economy, a high quality of life, a skilled workforce, and a strategic location within Europe. The country has made significant improvements in reducing bureaucratic obstacles, streamlining business processes, and offering incentives to foreign investors. Foreigners benefit from simplified company registration systems, competitive tax structures for startups, and various grants or financial supports from both national and EU programs.
Moreover, Portugal boasts a vibrant startup scene, particularly in cities like Lisbon, Porto, and Braga. These hubs provide access to coworking spaces, accelerators, venture capital, and government-supported initiatives. Entrepreneurs should also be aware of Portugal’s strong emphasis on innovation, sustainability, and digitalization in line with EU priorities.
2. Choose the Right Business Structure
Choosing the appropriate legal structure is a critical decision. It determines liability, tax obligations, and administrative duties. Here’s a breakdown:
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Sole Proprietorship (Empresário em Nome Individual): Ideal for freelancers or small businesses. It has minimal setup costs and limited bureaucracy, but the owner bears unlimited liability.
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Private Limited Company (Sociedade por Quotas – LDA): The most popular choice for SMEs. It offers limited liability to shareholders and requires a minimum share capital of €5,000.
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Public Limited Company (Sociedade Anónima – SA): Best for large companies intending to raise capital publicly. Requires a minimum of five shareholders and €50,000 in share capital.
Foreigners can also consider partnerships, cooperatives, or branch offices of existing companies abroad. Each structure has specific compliance obligations, so consulting with a legal advisor is advisable.
3. Obtain a Portuguese Tax Identification Number (NIF)
The NIF (Número de Identificação Fiscal) is essential for opening a bank account, signing contracts, or conducting any official activity. EU citizens can obtain it directly at a local tax office (Serviço de Finanças) with proof of address and ID. Non-EU citizens must appoint a local fiscal representative to act on their behalf.
The process usually takes a day and requires the following:
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Valid passport or ID
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Proof of Portuguese address (or representative’s)
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Application form (available at tax office)
Without a NIF, starting a business or signing legal documents in Portugal is not possible.
4. Secure a Business Visa or Residency Permit
For non-EU/EEA citizens, immigration is a major consideration. Portugal offers several visa routes:
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D2 Visa (Entrepreneur Visa): Designed for those who plan to start a business or invest significantly in the country. Applicants must present a viable business plan, proof of financial means, and demonstrate the business’s potential economic impact.
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Golden Visa: Targeted at high-net-worth individuals investing €250,000 or more in cultural projects, real estate, or business development.
Visa applications are processed by the Portuguese Immigration and Borders Service (SEF). Legal assistance is highly recommended to ensure compliance with changing immigration laws.
5. Create a Business Plan
A robust business plan serves multiple purposes: guiding the startup phase, attracting investors, and fulfilling visa or grant application requirements. A well-structured plan should include:
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Executive Summary: What the business does and its vision.
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Market Analysis: Overview of industry trends and customer demographics in Portugal.
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Competitive Analysis: Key competitors and your business’s unique value proposition.
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Financial Projections: Budget, revenue forecasts, and break-even analysis.
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Marketing Strategy: Channels, messaging, and positioning for the Portuguese market.
A clear, compelling business plan not only increases your chances of success but is often mandatory for funding and legal approvals.
6. Register Your Business
Business registration can be done through the “Empresa na Hora” service, which allows incorporation in less than an hour, provided all documentation is in order. Alternatively, you can register through a lawyer or public notary.
Documents typically required include:
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Chosen business name (check availability via RNPC)
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Articles of Association
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Proof of deposit of share capital in a bank account
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NIF of all partners or shareholders
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Identification documents of directors/shareholders
Registration with the Commercial Registry (Registo Comercial) is mandatory, and a permanent certificate of incorporation is issued upon completion.
7. Open a Business Bank Account
Opening a business bank account is necessary for handling financial transactions, paying employees, and registering taxes. Most Portuguese banks offer corporate accounts to foreigners, though they may require a face-to-face appointment.
Prepare the following:
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NIF
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Company registration certificate
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Articles of association
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Proof of identity and address
It’s advisable to compare fees, online banking services, and international transfer options across banks such as Millennium BCP, Novo Banco, and Caixa Geral de Depósitos.
8. Register for Social Security and Tax Obligations
Every registered business must enroll with Social Security (Segurança Social) and the Portuguese Tax Authority (Autoridade Tributária e Aduaneira).
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Social Security: Employers must contribute around 23.75% of each employee’s salary, and employees contribute 11%.
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VAT (IVA): Businesses earning over €12,500/year must register for VAT. The standard rate is 23%.
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Corporate Income Tax (IRC): The standard rate is 21%, though reduced rates apply for small businesses.
Filing deadlines and compliance rules are strict, so working with an accountant is highly recommended.
9. Hire Employees (If Applicable)
Portugal has a skilled and multilingual labor force. Hiring staff involves:
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Drafting contracts in accordance with Portuguese labor law
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Enrolling employees in social security
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Withholding income tax (IRS) and contributing to workers’ insurance
Minimum wage is around €820/month (as of 2025). Work-life balance is a cultural priority, and labor law includes provisions for paid leave, parental benefits, and workplace safety.
10. Keep Up with Local Compliance and Licensing
Depending on the nature of your business, additional licenses or sector-specific permits may be necessary. For example:
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Food services require health inspections and sanitary licenses.
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Educational centers must be accredited.
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Real estate agencies need specific authorization.
It’s important to verify regulatory requirements with local municipalities (Câmara Municipal) or relevant industry authorities.
11. Explore Funding and Incentives
Portugal provides various funding opportunities to promote entrepreneurship:
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Startup Portugal: A national strategy offering mentoring, visibility, and incubation.
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Portugal 2030: EU-backed funding focusing on green transition, digital transformation, and regional development.
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IAPMEI and Turismo de Portugal: National agencies offering grants for SMEs and tourism businesses.
These resources are accessible through competitive calls or partnership applications. Many are tailored to innovation, sustainability, and social impact.
“Portugal is not just a place to invest—it’s a place to grow.”
12. Build a Local Network and Adapt to Culture
Establishing a strong local network is key to business success. Engage with:
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Local Chambers of Commerce
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Startup incubators and coworking hubs
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Business networking events and trade fairs
Cultural understanding also plays a role. Business meetings in Portugal often emphasize personal rapport and trust. Communication is polite and indirect. Learning basic Portuguese and understanding local customs enhances business relationships and negotiation success.
Conclusion
Starting a business in Portugal as a foreigner is an achievable and potentially rewarding endeavor. By understanding the legal framework, preparing a solid business plan, securing the right visa, and staying compliant with tax and employment regulations, entrepreneurs can navigate the Portuguese business environment with confidence. With its supportive ecosystem, Portugal welcomes innovation, sustainability, and global entrepreneurship.
Frequently Asked Questions about the D8 Visa
Yes, Portugal allows full foreign ownership of businesses, regardless of nationality. Foreign entrepreneurs can establish and operate a company without needing a local partner. This openness has contributed to the country’s attractiveness among international investors and digital nomads seeking to build ventures within the European Union.
The “Empresa na Hora” service allows company registration in a single day, provided all documentation is in order. However, preparation can take longer depending on the entrepreneur’s visa status, the time required to obtain a NIF, and gathering necessary legal documents. Typically, the overall process can take 1 to 4 weeks when considering preparation and post-registration steps.
Startup costs in Portugal depend on the legal structure, industry, and size of the operation. For a private limited company (LDA), the minimum share capital is €5,000. Additional costs may include legal fees, business registration charges (usually around €360), accounting services, office rental, insurance, and licensing fees. Some sectors, such as hospitality or construction, require more capital due to regulatory compliance.
While Portuguese is the official language and widely used in government and legal contexts, many professionals speak English, particularly in urban centers. That said, understanding Portuguese can significantly improve communication with local authorities, suppliers, and customers. Hiring bilingual staff or interpreters can help bridge any language gaps and enhance business efficiency.
Yes. Portugal has developed a thriving tech startup ecosystem with numerous government-backed initiatives. Programs like Startup Lisboa and Beta-i offer mentoring, funding, and office space. Additionally, the country participates in EU innovation grants, and initiatives such as Portugal Tech and Portugal Ventures provide capital to early-stage tech companies. These programs are designed to support both local and foreign founders interested in launching innovative, scalable solutions.
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