At a glance
If you want to know how to open an Lda company in Portugal, the short answer is that you register a sociedade por quotas governed by the Codigo das Sociedades Comerciais, with a minimum share capital of EUR 1 per quotaholder, either same-day through the Empresa na Hora counter or online through the Empresa Online portal. The longer answer, including the documents, the tax registrations and the Madeira option, is set out below.
What an Lda actually is
An Lda is a private limited company, the sociedade por quotas. The abbreviation comes from Limitada, and Portuguese law requires it to sit at the end of the firm name, either in full or as “Lda.”. It is the default vehicle for trading companies in Portugal, used in equal measure by domestic businesses and by foreign founders incorporating their first European entity.
The defining feature is in the name. Liability is limited: each member answers for the company only up to the capital they have subscribed, and personal assets sit behind that line. The company holds its own legal personality, contracts in its own name, and owns its own assets and debts. Capital is divided into quotas rather than tradable shares, which is the structural difference from a sociedade anonima (SA) and the reason an Lda is simpler to run but less suited to bringing in outside equity at scale.
Lda, Unipessoal or SA: picking the right shell
Three forms cover most cases. A standard sociedade por quotas (Lda) needs two or more members. A sociedade unipessoal por quotas is the single-member version: one owner, the same limited-liability protection, and the word “Unipessoal” added before “Lda” in the firm name. A sociedade anonima (SA) is the share-based form, with a EUR 50,000 minimum capital and a board structure, used where the plan is multiple investors, share transfers or eventual listing.
For a founder or a small group of partners, the Lda or its Unipessoal variant is almost always the starting point. You can convert a Unipessoal into a multi-member Lda later by admitting a new quotaholder, and an Lda into an SA by transformation under the Codigo das Sociedades Comerciais, so the first choice is not permanent.
How to open an Lda company in Portugal: the steps
The procedure is well defined and, for a straightforward case, fast. The sequence is as follows.
Step 1, get a NIF for every member and director. Each individual who will hold a quota or manage the company needs a Portuguese tax number (NIF). Non-residents from outside the EU/EEA also need a tax representative at the registration stage. This is the single most common cause of delay, so it is worth settling first.
Step 2, fix the company name. You can either reserve a bespoke name through the Registo Nacional de Pessoas Coletivas and obtain a certificado de admissibilidade, or take a pre-approved name from the official list, which is what makes same-day incorporation possible. The name must end in “Lda” (or “Unipessoal Lda” for a single member).
Step 3, settle the company’s terms. Decide the members and their quotas, the share capital, the corporate object (the activities the company will carry on, by CAE code), the registered office, and who will act as gerente (manager). These go into the articles of association (contrato de sociedade), for which you can use the official model or a tailored draft.
Step 4, incorporate. There are two practical routes. Empresa na Hora gives you in-person, same-day incorporation at a registry counter, typically in about an hour, using a pre-approved name and model articles, at a standard cost in the region of EUR 360. Empresa Online lets you incorporate through the official portal with a digital certificate. A notarial deed is only needed where the structure calls for it. At the end of either route you receive the company’s cartao de pessoa coletiva with its NIPC (the corporate registration and tax number) and the codigo de acesso to the permanent commercial registry certificate.
Step 5, complete the post-incorporation registrations. Three obligations follow immediately. Register the beneficial owners in the Registo Central do Beneficiario Efetivo (RCBE), file the declaracao de inicio de atividade with the Autoridade Tributaria to put the company on the tax map for IRC and VAT, and register the company and any staff with Seguranca Social. A contabilista certificado (certified accountant) is required to sign off the company’s accounts and is, in practice, engaged at this point.
Step 6, open the corporate bank account and pay in the capital. The company needs its own bank account. The subscribed capital can be paid in within five days of incorporation or, at the members’ choice, deferred to the end of the first financial year, a flexibility that keeps day-one cash requirements low.
Capital, costs and what the EUR 1 figure really means
Since the 2011 reform, there is no EUR 5,000 floor. The minimum capital is EUR 1 per quota, so a single-member Unipessoal can be formed with EUR 1 and a two-member Lda with EUR 2. That figure is a legal minimum, not a commercial recommendation: a company that intends to take on liabilities, sign a lease or apply for credit will usually capitalise itself to a level that matches its activity. Members can also contribute in kind, with assets such as equipment or intellectual property valued and brought into the capital, subject to the verification rules in the Codigo das Sociedades Comerciais.
Tax and VAT once the company is trading
An Lda is liable to corporate income tax (IRC) on its profits, with municipal and, where applicable, state surcharges on top. VAT (IVA) applies to most supplies of goods and services: the standard rate is 23% on the mainland, 22% in the Autonomous Region of Madeira and 16% in the Azores, with reduced and intermediate rates for specified categories. The company withholds IRS and social security on salaries, files periodic VAT returns, and submits the annual Modelo 22 (IRC) and IES. Exact IRC rates and surcharge thresholds move with each annual State Budget, so they should be confirmed for the year of incorporation.
The Madeira option: where an Lda becomes a 5% structure
For founders whose activity is internationally oriented, the form of the company is only half the question. The other half is where it is licensed. A company licensed in the Madeira International Business Centre (Centro Internacional de Negocios da Madeira, the Zona Franca da Madeira) accesses a reduced IRC rate of 5% under Article 36.º-A of the Estatuto dos Beneficios Fiscais, in force to the end of 2033, provided it is licensed by 31 December 2026 and meets the regime’s substance conditions (broadly, the creation of one to five jobs plus a minimum EUR 75,000 investment, or six or more jobs, in the Region). It remains an ordinary Portuguese Lda in every legal respect, an EU company with a Portuguese NIPC, simply benefiting from a regional fiscal regime that has been cleared as compatible with EU State aid rules. We can assist with the assessment of eligibility and the substance file, subject to a review of the intended activity.
Limited liability, and where it stops
The protection an Lda gives is real but not absolute. A member’s exposure is, as a rule, capped at their capital contribution. That cap can fall away where a member has given a personal guarantee for a company debt, where there is fraud or an abuse of legal personality, or where the law pierces the corporate veil for unpaid taxes or social security contributions in defined circumstances.
Managers carry a separate and wider set of duties. A gerente who acts outside the corporate object, breaches the duty of care owed to the company, files false information, or fails to meet the company’s tax, accounting and reporting obligations can be held personally liable under the Codigo das Sociedades Comerciais and the tax-enforcement regime. Limited liability rewards proper governance; it does not excuse its absence.
Where MCS can assist
Madeira Corporate Services advises founders and investors on the incorporation of Portuguese companies and, in particular, on whether an ordinary mainland Lda or a Madeira-licensed structure better fits the intended activity. The firm can handle the NIF and tax-representation step for non-resident members, the incorporation itself, the RCBE, start-of-activity and social-security registrations, the appointment of a certified accountant, and the ongoing accounting and tax-compliance function, subject to a review of each case.
Frequently asked questions
What does Lda stand for?
Lda is the abbreviation of Limitada, the Portuguese for “limited”. It marks the company as a private limited company, the sociedade por quotas.
How many people do I need to open an Lda?
One is enough, in which case you form a sociedade unipessoal por quotas. A standard (multi-member) Lda needs two or more quotaholders.
Is there a nationality restriction?
No. EU and non-EU nationals, resident or not, can be members or managers. Non-residents need a Portuguese NIF, and those from outside the EU/EEA need a tax representative at the registration stage.
What is the minimum share capital?
EUR 1 per quotaholder. The old EUR 5,000 minimum was abolished in 2011. The figure you choose should reflect the company’s real activity, not just the legal floor.
Do I need a social security number to open the company?
The company itself registers with Seguranca Social. Individual members and directors need a Portuguese NIF, and the company opens a bank account in its own name. Note that the company’s NIPC is its corporate registration and tax number, not a social-security number.
What VAT rate will the company charge?
The standard rate is 23% on the mainland, 22% in Madeira and 16% in the Azores, with reduced and intermediate rates for specified goods and services.
Can I change the company name later?
Yes. A name change is an amendment to the articles of association and is registered at the Conservatoria do Registo Comercial.
Can I convert an existing business into an Lda?
Yes. A sole trader can incorporate, and other company forms can be transformed into an Lda under the Codigo das Sociedades Comerciais. Because the steps carry tax and legal consequences, take advice before proceeding.
This article is provided for general information only and does not constitute legal, tax or accounting advice, nor an engagement of Madeira Corporate Services. The rules summarised here, including capital equirements, tax rates, the Madeira IBC regime and incorporation procedures, are subject to change and to the specifics of each case. No action should be taken on the basis of this article without prior professional advice tailored to your circumstances.
Ambrosio Jardim has, since 1998, worked mainly in the areas of commercial law (corporate, mergers and acquisitions, joint ventures, restructuring and planning), national and international tax law and real estate…. Read more
