Company Formation in Portugal
Portugal has gradually become one of the most attractive locations and potentials for trade and development in the European Union. Portugal is home to extensive natural assets, including Europe’s largest lumber resources.Portugal developed an economy strongly based on services and was one of the founders of European currency (Euro). Although Portugal has a predominant agriculture past, now and because of the country’s development, the economic structure is based on services and industry, which represent 74.9% and 24.9%, respectively, of the gross value added. The main manufacturing industries are textile, foot-wear and cork. The cork production is very significant, being Portugal the world’s biggest producer. Names like Volkswagen, Visteon, Delphi, Microsoft, Lear and Mitsubishi, among others, have chosen Portugal as a place to base themselves.
Advantages of incorporating business in Portugal:-
It has one of the lowest operational costs in Western Europe.
It is a founding member of the European Monetary Union.
With an impressive investments track record, many companies chose to bring new ventures to the country.
It is one of the continents having youngest and most zealous workforces, offering top class training facilities.
It offers one of the world’s top and most dextrous incentives deals.
High increase in productivity in both manufacturing and services.
A vast range of locations and facilities at competitive prices and readily available.
Paramount support services for investors, including on-going support.
One of the continent’s best records for industrial relations.
A high quality of life with one of Europe’s lowest rates of crime.
The income taxation rate in Portugal is progressive. Exemptions are permitted to those workers with a specific income
The average set rate for corporate tax is 25%. A local tax is usually charged at a rate of 1.5%, bringing the total to 26.5%. Companies operating in the free trade zones of the Azures or Madeira are eligible for tax reductions depending on the type of business they run and the year in which the business was established.
Types of Entities
Public Company: This company type is designated for a medium to large business having a minimum required capital of EUR 50,000. It can be formed by at least five shareholders who can be individuals or legal entities. The liability of the members in a public company is limited to the contribution made by each one. This kind of company must be registered at the Trade Register in order to function legally.
Private Limited Company: This company type is the most popular for small and medium companies. For the formation of a private limited company at least two members are required. They must provide at least EUR 5.000 in order to apply for registration. The partners of a private limited
Limited Partnership: The limited partnership in Portugal is a typical partnership formed by at least two persons. At least one member of the partnership is general and bears full liability for the company’s debts and obligations, having the right to interfere in the management of the company and at least one member is a limited partner and holds limited liability to the extent of his contribution. The limited partnership does not require a minimum capital.
General Partnership: A general partnership is created by at least two members who do not have to provide a minimum capital. All the members of this kind of partnership are general and bear full responsibility for the partnership’s debts and obligations, also having the right to manage the company and invest the profit and to remediate the losses.
Company with a single shareholder: This type of company is formed by one founder who can open only one entity of this type. The single shareholder is liable with the assets of the company and not of his own personal property. This kind of company is rarely used, but has the advantage of being easy to incorporate.
It usually takes 5 days to incorporate a business in Portugal.