Nationals and foreigners are able to start businesses in Portugal as long as they have the minimum capital and required work permits. The problem is that the bureaucratic process can be a bit confusing and having a local you trust to help can be very beneficial. If you are thinking of starting a small business in Portugal, there are some things that you need to know.
The Business Environment
Portugal was ranked at 31 in the World Bank’s Doing Business 2014 report. This report evaluates 189 developed countries based on the ease of starting a company, doing business and funding. In one year, Portugal fell 7 places in the report.
However, it is important to note that the report states that it is easier to start a business in Portugal when compared to its neighbors like Spain. The problem comes when you want to get business credit. It should be noted that the Portuguese government has been taking steps to make it quicker and easier to open a business. When you pass this stage, you will be faced with obstructive local regulations as well as the inflexibility of the banks.
The Requirements
In order to start a business in Portugal, you will need to have a residency card issued by the Immigration Service. You also need to have a social security number from the Social Security Office. If you are going to be staying in the country and working for more than 180 days, you will be paying social security.
You will also need to have a tax number because you have to register for tax purposes. Your tax number is required even if you have not yet started the process of opening your business.
The Business Structure
There are a few ways that you can structure your business and you need to be aware of this. This first is a sole proprietorship where you will take personal responsibility for any business debts. You could also choose a single shareholder limited company or an individual limited liability establishment.
If you are going to be running your business with other people, there are different options that are available. The first is a partnership where each partner is personally responsible for business debts. You can also open a limited partnership or a limited company. Public limited companies and corporations are also an option.
How To Set Up Your Business
When it comes to setting up your business, you might want to hire a broker that is experienced and well-versed in Portuguese administrative processes. You may also need a chartered accountant and a lawyer. When you get the correct legal advice, you will be able to identify any tax breaks that you are eligible for and the process of opening your business will be easier. Your business is also going to need a bank account which clearly indicates who is able to sign and issue checks.
Once you have decided on a name for your company, you will need to check this against the National Registry of Collective Entities. This can be done at the nearest office or online and will tell you if your name is available. The company name will need to be approved and then the RNPX will provide a certificate of approval and provisional taxpayer card.
Over the years, the process for starting a business has been simplified and more ways of doing this introduced. You can use the Empresa Online service to set up your company online. You can also use the Empresa na Hora service to set up the company within an hour when you deliver the required documents to a special office. You could also visit the business formality center or commercial company register to set up your business.
It is important to note that some regions and certain types of companies require more traditional methods to be used. These methods will involve you getting an eligibility certificate and a legal entity provisional identification card. You will have to deposit the full capital into your business account, get a public deed if required and then declare that business has started at the regional tax office. You will also have to register the company and enroll as a taxpayer.
Social Security And Insurance
If you have employees, you need to register them at the Business Formality Center within 10 days of registering your business. This needs to be done before they start work. This will ensure that they are able to receive social security insurance.
Workers’ compensation insurance will cover all employees and managers who receive a salary. You can register with a private insurance company when your business starts trading. Your social security insurance will not cover any occupational accidents or injuries.
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