How to Start a Small Business in Portugal? Are you an expat dreaming of starting a business on the stunning Madeira Island? Madeira has become a popular choice for entrepreneurs and expats. At Madeira Corporate Services (MCS), we specialize in helping you navigate the Portuguese legal and administrative landscape to make your business dreams a reality. Below, we provide a detailed, professional guide to starting a small business in Portugal, tailored for those looking to relocate to Madeira Island.
How to Start a Small Business in Portugal?
1. Choose the Right Legal Structure
Portugal offers several options for establishing your business:
- Sole Proprietorship (Empresário em Nome Individual): Perfect for solo entrepreneurs.
- Single-Member Limited Liability Company (Sociedade Unipessoal por Quotas): Offers personal asset protection.
- Private Limited Company (Sociedade por Quotas): Suitable for small and medium-sized enterprises.
- Public Limited Company (Sociedade Anónima): Often used for larger enterprises.Cooperatives and Other Forms: Ideal for community-based ventures.
MCS can guide you in selecting the best structure for your business, considering your personal and professional goals.
2. Register Your Business Name
Your business name must be unique and comply with Portuguese regulations. Registration is handled through the Instituto dos Registos e do Notariado (IRN).
MCS can handle this process, ensuring your business name aligns with your brand and legal requirements.
3. Obtain a Portuguese Tax Identification Number (NIF)
A Número de Identificação Fiscal (NIF) is required for both the business and its owner(s) and directors if foreigners.
MCS will help you obtain this crucial number before relocating to Madeira.
4. Register Your Business
You have several options:
- Empresa na Hora: Same-day registration is available at designated offices.
- Online Registration: Through the Portuguese government’s Portal da Empresa.
- Traditional Registration: Via the Commercial Registry Office.
While faster incorporation processes are available to the modern entrepreneur our team of professionals strongly recommends traditional registration as it gives higher control of the process to the investor and the professionals assisting them. At MCS we will assist with document preparation and filing, ensuring a smooth process.
5. Secure Necessary Licenses and Permits
Depending on your sector, you might need specific licenses or permits. For instance, Construction businesses must register with the IMOPPI and meet financial and technical criteria. Other sectors may have their regulatory requirements.
Our team at MCS will identify what applies to your business and handle all interactions with Portuguese authorities.
6. Open a Business Bank Account
Opening a Portuguese bank account is essential for managing your company’s finances and obligations and tax compliance. MCS can recommend reputable banks and help you gather the necessary documents, while the responsibility of interacting with the financial institutions lies with those directly interested, as per Portuguese banking practice.
7. Register for Social Security
Businesses in Portugal must register with Segurança Social to ensure compliance with labour laws and social security contributions of their employees and Directors. We’ll handle this for you, ensuring you meet your obligations as an employer.
8. Meet Your Tax Obligations
Your business must register with the Portuguese Tax Authority and obtain a VAT number (Número de Identificação de IVA). These are attributed immediately to our incorporation service. Furthermore, our accounting team provides ongoing accounting and tax compliance, helping you, the investor, focus on business growth.
9. Explore the Benefits of the Madeira International Business Centre (MIBC)
Madeira is home to the Madeira International Business Centre (MIBC)—an internationally recognized tax-advantaged regime offering significant benefits:
- Reduced corporate tax rates (5% on qualifying profits).Exemptions on certain dividends and royalties.
- Access to a supportive international business ecosystem.
- The MIBC offers a secure, EU-compliant framework to enhance competitiveness and profitability for expats looking to establish international/global operations from Madeira.
MCS has over 20 years of experience helping clients leverage the MIBC for their ventures.
10. Launch Your Operations
Once all legal and administrative steps are complete, you’re ready to start your business! MCS remains at your side, offering ongoing support in accounting, payroll, and compliance—giving you peace of mind as you grow your business in Madeira.
How Madeira Corporate Services Can Help You Start a Small Business in Portugal
At MCS, we understand the challenges and opportunities facing entrepreneur expats relocating to Madeira Island., so let us help you turn your vision into a thriving reality on the beautiful island of Madeira.
Contact us today to learn how we can support your business journey in Portugal and unlock the benefits of the Madeira International Business Centre.
This article is for informational purposes on “How to Start a Small Business in Portugal” only and does not constitute legal or tax advice. Please consult with a qualified professional to discuss your specific circumstances.
The founding of Madeira Corporate Services dates back to 1996. MCS started as a corporate service provider in the Madeira International Business Center and rapidly became a leading management company… Read more
