Portugal, though small, has a strong entrepreneurial structure. There are other reasons why businessmen are drawn here.
Security. Portugal ranks third in the world on the Global Peace Index. It was number one on the European Union’s 2020 Peace and Security Index. You do not have to worry about losing your business overnight due to strikes or a change of government.
The infrastructure for business development is excellent. Those who have already settled here, warn: it makes no sense to open a business in Portugal just for the residence permit. But if you have an idea, a clear plan, a desire to receive a steady income – go ahead. This country has all the conditions. And the residence permit will be a nice bonus.
An incentive policy towards entrepreneurs by the state. On August 5, 2020, 1803 startups were registered in Portugal. When you consider that the country is barely over 90,000 km2 and its population is almost a million behind Moscow, these are impressive numbers that confirm: doing business here is convenient and profitable.
Transparent operations. In 2020, Portugal ranked 33rd on the Corruption Perception Index.
Membership in the European Union. Once you get a residence permit in Portugal, you can travel freely throughout the Schengen area.
Low business taxes in Portugal. Income tax is one of the lowest in Europe. The rate on profits depends on the income, for example, if your business brings up to 7,000 € a year, you will be asked 14.5%, and if your income exceeds 80,000 €, the rate rises to 48%.
Advanced modern technology. These are not just words: in 2020, for example, Portugal ranked 32nd in internet speed among 207 countries.
In what field is best to open a business?
Business ideas in Portugal are many, but they are implemented differently by everyone.
Let’s look at which sectors of the economy are developed in Portugal and where you can invest for a foreigner.
The last 5 years the commercial sector has been developing with double the strength.
- Attractive living conditions are bringing new foreign consumers to the country.
- Tourists are gradually increasing, especially in Porto, Lisbon and the Algarve – these are regions to which local and foreign entrepreneurs are drawn.
- Integration with the European Union has simplified import and export conditions for goods.
This has led to an increase in local trade. The state encourages the opening of bars, catering establishments, industrial facilities, especially those that manufacture textiles and shoes. They are the first to be considered when deciding what kind of business to open in Portugal.
Reselling imported goods is also a good option. Especially locals often buy Brazilian, Chinese, American and French goods.
Because of the favorable economic situation in the country, businessmen from all over the world gather. So there is a huge demand for entrepreneur consulting services.
When you successfully open your own business you can also share your experience and earn money from it: You can give expert advice, write a blog, write posts and make videos about business in Portugal for foreigners.
All other consulting services are in demand: legal, accounting, administrative.
Other promising areas in Portugal:
- personal hygiene – the country needs hairdressers, makeup artists, manicurists, tattoo artists;
- entertainment – locals love going to conferences, exhibitions, going to the movies;
- education and service – the resort regions often look for translators.
What are the requirements to get a startup visa?
You can get a startup visa if you meet one of the conditions:
- you want to start a company in Portugal;
- you already have your own business in a non-EU country.
In order to be eligible to join the startup program, you fulfill the following requirements:
- could be over 18 years old;
- have no criminal record;
- have lived in a country outside of the Schengen zone for some time;
- have a bank account with at least 5 147€ during one year.
What requirements must a business meet
If your goal is not only to open a business in Portugal but also to have the possibility of immigration, open a business that meets these requirements:
- Focused on technology;
- Annual turnover of 325,000 € per year for 5 years;
- Prefer to create new jobs (minimum 10).
Is it risky to buy a business in Portugal in times of pandemic?
Yes, it sounds like a crazy idea. It would seem that how can you open a business in Portugal when even local companies are closing down? It’s not as dull as it sounds – let’s explain.
There are many conservative entrepreneurs in this country who have inherited their businesses. These are the same small companies with rich histories: family-owned hotels, restaurants and cafes. That they have come to an end in a pandemic is not at all surprising:
- Small business for many Portuguese is a family tradition, not a way to make big profits.
- Bearing in mind the attitude of small businessmen, there is no question of long-term planning. There are no clear goals, no strategy.
- As a rule, these entrepreneurs do not have a financial safety cushion.
- Because of the owner’s conservative views, the business has not been able to adapt to the online model.
In Portugal, not every organization has its own website or social network account. As a result, small companies that have not even considered adopting new technology cannot survive the crisis.
Benefits of buying a business in covid times
If you are an entrepreneur who is conscious about doing business, all the above factors mean not risks, but rather opportunities for you.
Liquidating old companies will give you these advantages:
- You will have fewer competitors – and this is very important when we talk about business in Portugal. You can have a great cafe with new renovations and fragrant coffee, but the Portuguese will go to the barely surviving diner next door. Here nepotism is developed.
- You will find a business “to your liking” – because of the current environment offers enough, so you can choose.
Now buy a ready-made business in Portugal is cheaper than in pre-crisis times – entrepreneurs who do not know how to transfer the business online, trying to get rid of it as soon as possible.
How to buy a business in Portugal
Remember the word “Trespasse” – it means buying a business with all its tangible and intangible assets (like real estate, name of establishment, equipment, customers and sometimes even staff). You will need only to open a new legal entity in your own name. The advantages of such a purchase are that you don’t have to:
- Build a business from scratch in a country where you already have a language barrier and new culture waiting for you.
- Find channels to find and attract customers (at least for the first time they will).
- Search and negotiate with suppliers.
- Buy/rent new premises, furniture and equipment.
In general, buying in the “Trespasse” model is an opportunity to rid yourself of the work that the business owner did before you. And what you think is inefficient, you can remove/sell/improve.
The main thing is to find a property with a good location and a good reputation. Then you will save a lot of time and effort.
Where can I buy a ready-made business?
To buy a profitable business in Portugal, monitor the listings regularly. Here are some popular sites where you can find them:
- Venda de Empresas.
Or search in search engine and social networks with the keywords “comprar negócio pronto”, “comprar empresa trespasse”, “comprar empresa”.
Prices for businesses in Portugal depend on the location of the property and the size of the assets you get with the company. For example, there is an ad for a boutique hotel in the center of Lisbon for €1,600,000. And a package of two apartments for rent in Porto are offered for 350,000 €. There are also offers for half the price.
How to register a company?
In Portugal non-residents can register a company in two ways: through Empresa na Hora or Empresa Online. In short, the first option is for those who have a package of documents prepared in advance. If it is a company with several shareholders, all of them will have to be present. And Empresa Online is suitable for entrepreneurs who have an electronic identity certificate.
Let’s take a closer look at how to start a business in Portugal with these services.
Empresa na Hora
With Empresa na Hora you will open your own company within one hour. You can apply at any of the offices of the service. There are 4 steps to register:
- Choose one of the approved names for the company, which can be found on the website of the Service or in the paper list (usually provided in the office). This name is only valid until registration.
- Select the pre-approved articles of association and memorandum of association.
- Get the package of documents:
company registration certificate, commercial identification number, social security number, deed and business registration certificate.
- File at the enquiry desk an application to start the company, signed by an accountant, this is necessary to register with the tax office. You can apply immediately or within 15 days after registration.
With Empresa Online you can register your company from home.
It is true that in this case the procedure will take 1-2 days. You will need www.portaldaempresa.pt. The cost of the service depends on certain conditions:
- 360€ for a company registered without articles of association and memorandum of association;
- 220€ with pre-approved articles of association and memorandum of association.
The Portuguese law requires employers to register with the regional Social Security Centre within 24 hours before the employer-employee contract takes effect, or one day after the start of the company. Failure to do so will result in the employee being considered to have started work six months prior to the violation. In addition, you can be fined between €75 and €4,800.
If you are going to hire locals, don’t think they will turn a blind eye to this. The Portuguese know their rights very well. Their laws are more protective of workers than employers.
Plan of action for starting a business in Portugal
You will need:
- write a business plan;
- get a tax number in the name of the company founder;
- open a bank account;
- write a Memorandum and Articles of Association;
- prepare a list of documents to the register:
information on each director/shareholder of the company (copy of passport in Portuguese);
confirmation of residence.
- choose the name of the company;
- rent an office and a legal address that will be used in the incorporation documents and for correspondence;
- transmit information about the company opening to the tax and social authorities in Portugal;
- contribute the minimum capital (1 euro);
- optimize tax payments – with many countries Portugal has an Agreement on avoidance of double taxes, there are favorable rates.
What else is important to know when doing business immigration to Portugal
Register and do business in Portugal is no problem for Russians. It is even easier and more profitable for migrants than for the Portuguese themselves: the government does its best to attract foreign investors.
The registration procedure is slightly different for owners of small, medium and large businesses. For example, if you take part in the program “Golden” or “Business Visa”, you can quickly get a residence permit, and later citizenship. But business visa is more suitable for owners of medium and large businesses whose priorities from the beginning include:
- exit to the world market;
- opening an account in a European bank;
- gradually opening branches around European Union countries.
What to do for those who want to do small business
You can choose one of the options:
- Individual business – for registration you have to go to tax office and provide package of documents. With a sole proprietorship you can work as a driver, consultant, interpreter, guide, etc.
- LLC or LDA – you can register a limited liability company with one or more founders. What you need to do for this and what documents to prepare, we wrote in the previous block. This option is suitable if you want to engage in manufacturing, trade, construction, open a restaurant or hotel, etc.
And what about medium and large businesses?
The medium and large businesses include enterprises whose activities are related to production, international and industrial purposes. For such cases, the organizational-legal form of a “Public Company” is excellent. A few things to know about it:
- The company must have at least 5 shareholders.
- The minimum amount of the authorized capital (paid into the company’s bank account) is 50 000 €.
- After registration, it must keep accounting, audit and timely submission of statements.
If you are interested in starting a business in Portugal because of the opportunity to expand your partner and client base in Europe, a branch or representative office would suit you better.
How a businessman gets a residence permit
For example, you have solved all questions with the documents and company registration and want to get a residence permit for starting a business in Portugal. According to the amendments to the Portuguese legislation, you are entitled to a “Golden Visa”.
- have a Schengen visa when entering Portugal;
- apply for an investment visa within 90 days from the first day of entry into Portugal;
- have an investment activity – meet at least one of the conditions:
- invest in Portuguese business of 1 million € or more;
- create at least 10 jobs;
- acquire property worth 500 000 € or more.
In order to immigrate to Portugal you must have been engaged in investment activities for 5 years from the date of the residence permit.
You can apply for a residence permit online, at one of the Portuguese representations in your country or at the Migration Service office in Portugal.