March 18, 2024

8 Key Considerations Before Starting a Business in Portugal:

Have you ever dreamt of turning your business idea into reality, but traditional markets seem a little… well, traditional? If you want to start your business in a lively and friendly country with beautiful coastlines and lots of people wanting to start a business, Portugal might be the place for you!

Portugal has amazing beaches and a long history and is becoming a top place in Europe for new and creative businesses. They have good tax deals, the government supports new ideas, and there's a helpful community for entrepreneurs. It's like a great starting point for your business dreams! But before you purchase your plane ticket and start looking for offices with a view of the ocean, let's talk about some important things to think about for a successful business in Portugal.

Business Idea and Market Research

As with any business venture, the first step is to solidify your concept. What product or service are you offering? Is there a demand for it in the Portuguese market? Run thorough market research to understand the existing competition, target audience demographics, and potential challenges. Talking to local business owners and industry experts can provide valuable insights.

Consider questions like "Is your business idea relevant to Portugal's tourism industry?" "Could it cater to the growing remote worker population?"

Business Structure and Legalities

Do you plan to have business partners? Will you need to raise capital from investors? These factors will impact your choice of business structure.

Portugal offers a variety of business structures, each with advantages and limitations. Some of the most common options include:

  • Sole Proprietorship (Empresa Individual): Simple to set up, but the owner carries personal liability for debts.
  • Limited Liability Company (Sociedade por Quotas, S.Q.): This type of company offers personal liability protection for its members, similar to a Limited Liability Company (LLC) in the U.S.
  • Corporation (Sociedade Anônima, S.A.): More complex but allows for raising capital by selling shares.

Consulting a lawyer or accountant specializing in Portuguese business law is crucial. They can guide you through the legalities of company formation and tax registration and ensure compliance with regulations.

Relocation Service Companies

Setting up a business in a new country can be overwhelming, especially with language and cultural barriers. Companies that offer Portugal relocation services can be a valuable asset, offering assistance with things like:

  • Company registration and incorporation
  • Visa applications and work permits
  • Finding office space and navigating local bureaucracy
  • Cultural integration and language assistance

These services can help streamline the process and will make sure a smoother transition for you and your team.

Funding and Investment

Do you have the capital to start your business, or will you need external funding? Portugal offers several government incentives to attract foreign investment. These include tax breaks, simplified bureaucracy, and access to funding programs. Research these initiatives to see if your business qualifies for any benefits.

Business Permits and Licenses

You may require specific permits and licenses to operate legally, depending on your business activity. Research the requirements for your industry and factor in any additional costs associated with obtaining them.

Actionable tip: Contact the relevant government agency or business association for a comprehensive list of permits needed for your specific business type.

Taxes and Accounting

Always remember that staying on top of your tax obligations is crucial for any business. Portugal's tax system offers several benefits for entrepreneurs. These include a competitive corporate income tax rate, a beneficial tax regime for non-habitual residents, and tax breaks for specific industries.

However, it's important to understand your tax obligations and set up a proper accounting system from the outset. Consulting a Portuguese tax advisor can ensure compliance and take advantage of all available tax benefits.

Language and Culture

Here's a challenge: why not learn a few basic Portuguese phrases before your move? While English is spoken to some degree in tourist areas, Portuguese is the primary language of business.

Learning basic Portuguese will help you build relationships with local customers, employees, and government officials. Understanding Portuguese culture will also help you navigate business etiquette and avoid accidental faux pas.

Building a Network

Networking is essential for any business, and Portugal is no exception. Attend industry events, connect with local business owners, and join relevant associations.

Building relationships will open doors to new opportunities, provide valuable insights into the market, and foster a sense of community. Go one step further and join online forums or social media groups for entrepreneurs in Portugal.


Vamos a Portugal! You've taken a big step towards starting your business dream in Portugal by thinking about these important things. But there's more to do! Portugal is waiting for you with good planning and entrepreneurial spirit. By using the information in this article, you can make your dream of starting a business in Portugal come true and become successful.


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