(+351) 291 202 400 management@mcs.pt

Incorporating in Portugal

Home | Corporate Services | Incorporating in Portugal

Incorporate a Company in Portugal

So, you have decided to invest in Portugal, then the obvious next step that needs to be taken is incorporating a company (also known as company formation).
Under Portuguese law, investors can incorporate one of the following types of company:
Z

Private Limited Company (Lda.)

Z

Single Partner Limited Company (Unipessoal Lda.)

Z

Private Limited Company (S.A.)

Z

Holding Company (SGPS)

Z

Limited Partnership Company

Z

General Partnership Company

The most common types of companies incorporated in Portugal are either a (Single Partner) Private Limited Company or a Private Limited Company. This is because no minimum share capital is required for these types of companies.
Why incorporate in Portugal
Why?

Incorporating in Portugal

Learn more about all the benefits of Incorporating in Portugal.

Corporate Taxation in Portugal

Corporate Tax Rate

The corporate tax rate applicable to companies in Portugal may vary, depending on which part of the Portuguese territory said companies are incorporated and domiciled. From the get-go, the Autonomous Region of Madeira is the Portuguese territory with the highest tax efficiency for companies and investors.

 Type of entity incorporated MIBC* Autonomous Region of Madeira Portuguese mainland
Resident entities and permanent establishments of non-resident entities 5% 14,7% 21%
Resident entities characterized as a small or medium enterprises, on the first € 25 000 of taxable profit 11.9% 17%

* Incorporation of entities within the MIBC – Madeira International Business Center allows for a 5% tax rate that is only applicable on taxable profit deriving from non-resident entities (otherwise, the standard rates apply) along with additional tax benefits for shareholders. For more detailed information, please click here.

VAT

Type of rates Autonomous Region of Madeira Portuguese mainland
Normal rate (most goods and services) 22% 23%
Intermediate Rate (F&B services) 12% 13%
Reduced Rate (food and essential goods) 5% 6%
Other Taxes
Other tax rates MIBC* Portuguese Mainland and Autonomous Region of Madeira
Dividends 0% 25%
Interests, Royalties and Services 0% 25%
Capital-gains 0% 21%
Stamp duty, Municipal Real Estate Tax, Municipal Real Estate Transfer Tax, other local taxes. 80% reduction applicable to the normal rates Normal Rates

*For more detailed information, please click here.

Documents Needed for Incorporation

Although a “quick” incorporation method is available to investors, it is recommended that before choosing this option, you talk to a corporate lawyer. Technical advice regarding incorporation in Portugal is advisable, especially if one wants tailor-made company by-laws or aims to benefit from specific tax benefits available to international investors.

The primary documents needed for anyone to incorporate a company in Portugal are:

  • Shareholders and directors’ certified copies of their passports.
  • Shareholders and directors’ certified copy of their utility bill to prove address – no older than three months old.
  • Shareholders and directors’ certified copy of a document proving their taxpayer identification number abroad.

Further to the above, before the incorporation itself, investors need to consider the following:

  • A suggestion of three legal names for the company
  • List of the economic activities that the company will pursue (as detailed as possible).
  • Confirmation of how the shareholders intend to structure the company, that is, who will be the partners and managers, the participation of each one in the share capital, and legally binding the company.
  • Indication of the desired share capital (minimum legal amount is 1 euro per shareholder, although we always suggest a minimum value of 1.000,00 euros).

Want to talk with us?

Should you require assistance in incorporating a company in Portugal, do not hesitate to contact us.