It’s relatively simple to start a business in Portugal and Lisbon is an amazing city to set up your startup. It has a great environment, high-quality local talent and reasonable costs. The Portuguese capital is rapidly becoming a popular destination to start or grow your company.
1. Register Your Company
It might be easier, especially if you’re not Portuguese, to get help from an experienced accountant with the registration process. Regardless of where you are from an accountant will save you time.
If you feel confident enough to go it alone, then it can be done online here. If you choose to use an accountant, the costs will be roughly €360 plus a little more for the official paperwork.
There is also a symbolic initial capital requirement of €10 the equivalent of an LTD (called a ‘Limitada’). For the equivalent of a PLC (‘Sociedade Anónima’), you will spend €50,000.
2. Get an Accountant
An accountant will be invaluable. There are plenty of English speaking accountants with experience in the start-up sector. They will provide a no-nonsense approach and help you with all your financial concerns.
At Altar.io we work with FN24 but have heard good things about other firms such as Reward, Acctax, and Moneris. The monthly costs are usually in the region of €100 — €250.
3. Sign Up for Great Accounting Software
When you start a business in Portugal, it is now a requirement that all invoices are produced by an authorized accounting software product that is linked digitally to the tax authority. This not only saves you time and money but also provides constant visibility on your business. It shows you where you are with your clients and offers you the ability to instantly analyse your company’s financial performance. The two most startup-friendly products are Sage One and InvoiceExpress – I would advise you to use one of these.
4. Pay your Taxes
When you become profitable and need to start paying a corporate tax of 21% (incidentally amongst the lowest in Europe). Before that, however, you will need to pay some payroll taxes. These include a social security tax of 11% (paid by the employee) and a 23.75% levee paid by the company. In addition, there is a progressive Income Tax that is partly paid by the company.
Your accountant will need to send you a salary sheet with your social security and income tax payment codes . From experience, I know these take around half an hour to process.
Moreover, it’s worth remembering that the VAT rate in Portugal is 23% and is paid to the state every three months.
5. Digital Banking
Although there are only a few global banks operating in Portugal, it doesn’t matter as all our local banks are now digital and allow you to manage your business accounts online or via apps. We recommend Banco BIG, for instance – a low-cost digital bank who has been operating for about 15 years. Likewise, there are many local banks to choose from including Caixa, Millennium or Novo Banco.
6. Get an Office
If you are looking to co-work in Lisbon there are many great places available with plenty more to come. We’d suggest checking out Cowork Central, Cowork Lisboa and Second Home. These are all in the trendy, sun-drenched, riverside strip of Lisbon.
You may want to have your very own HQ and space. In that case, we’d recommend you look at the vast choice offered by Idealista or CBRE, commercial property agents. Both will advise on suitable offices, areas and other property needs.
7. Get workplace safety and health checks
Every company in Portugal needs a yearly workplace safety check and access to occupational health services. There are now several companies providing these requirements. We’d recommend Centralmed or Medilabor.
It’s Time to Start a Business in Portugal
With these 7 steps, you’re now ready to start a business in Portugal and subsequently create your amazing product whilst being in our amazing country.
Enjoy. We know you will.