It is import to clearly define what your business strategy is and how you plan to implement it, run it, finance it and if necessary exit it. The first step must be to draw up a business plan and a budget - stating clearly what your goals are, how you are going to implement it and possible sources of finance (personal, family, friends, banks or investors).
Once you have your business plan and budget we recommend you run several different types of simulations to see the results on your profit/loss margins. We suggest running at least three scenarios: Better than expected, worse than expected and really worse than expected. It helps to think of possible measures you can take if these scenarios actually do occur.
Once you have run different scenarios it helps to role play your business. If possible we recommend using local business people, foreign business people and friends / strangers. See how they respond to your business and try to resolve potential problems before they even arise. If you are going into a new field we strongly recommend that you at the very least try an internship in this new field.
If you are not fluent in Portuguese - we strongly recommend that you attend intensive language courses.
Types of businesses:
Sociedade por Quotas, LDA: At least two partners, although there are also Sociedade Unipessoal por Quotas, which have a single partner (either an individual or a collective entity). The corporate entity is responsible for any company liabilities. There is a minimum capital investment of €5,000.
Sociedade Anónima SA Corporation: At least five shareholders, unless one of the shareholders is the State, in which case only two shareholders are needed. The corporate entity is responsible for any company liabilities.
Sociedade em Comandita, SC: These businesses have two types of partners: Sócios Comanditárias whose liability is limited to the amount of their shares and Sócios Comanditados who are liable for any company debts.
Sociedade em Nome Collectivo, SNC: partners will bear unlimited liability for any company debts.
Step by Step guide to opening a business in Portugal:
1. Choose a name for the company. If the name chosen has not already been taken that name can be registered via a Certificado de Admissibilidade issued by the Registo Nacional de Pessoas Colectivas orRNPC.
2. Apply for a Certificado de Admissibilidade and for a Cartão Provisorio de Pessoa Collectiva from the Registo Nacional de Pessoas Colectivas (RNPC).
3. Sign the deed of incorporation at a notary
4. Apply for a Declaração de Início de Actividade para Efeitos Fiscais at the Direcção-Geral dos Impostos - DGCI. This must be done within 90 days of the Cartão Provisorio de Pessoa Collectiva being issued.
5. Apply for registration of the company at the local Conservatórias do Registo Comercial, the registry will then organise the company's publication in the Diário da República.
6. Register at the local Segurança Social.
4. Register with the Cadastro Comercial or Cadastro Industrial at the Directorate-General of Enterprise (DGE) or the local regional office of the Ministry of Economy within 30 days.
You can also open a business online via the following site: www.empresaonline.pt. Other options include stopping by one of the Centros de Formalidades das Empresas or Conservatórias do Registo Comercial anywhere around the country. You can also use the goverment sponsered Empresa na Hora.
It is highly advisable that you use the services of a despachante, contabilista and a advogado (business broker, accountant and a lawyer). You can also get advice on starting a business at Centros de Formalidades das Empresas or the Loja do Cidadão.
We strongly advise you to learn Portuguese before attempting to open and operate a business in Portugal.
The standard corporate tax rate is 25% with an addition 2.5% municipal tax making a total of 27.5%. In Madeira and Azores companies are eligible for a reduced tax rate of between 17.5% - 22.5% depending on the type of company and the year it was set up.
Madeira also operates Madeira's International Business Centre (IBC) which operates in the EU and under EU rules. Companies licensed by the IBC enjoy a corporate tax rate of 3% up to 2009, 4% to 2012 and 5% to 2020. There are however limits on company earnings that can benefit from these low rates. Ceilings range from Euro 2m for companies with up to 2 employees to Euro 150m for companies with more than 100 workers. To be able to benefit from the above regime the company is required to have a physical presence in Madeira and to employ at least one person.
Please note that tax rates are subject to change and it highly recommended that you refer to a tax specialist or the Portuguese Tax Authority (Direcção-Geral dos Impostos) for the lastest tax rates that apply to Portugal. Direcção-Geral dos Impostos: www.dgci.min-financas.pt
