Europe’s best climate, safety, superb facilities and services, and the best business and lifestyle location in Southern Europe. Why settle for less?

Portugal is a country with a thriving business environment, making it an attractive location for entrepreneurs looking to establish a new business or expand their existing one. However, like any other country, there are legal requirements and challenges that must be navigated.

Over the years I have lived in Portugal I have noticed a major change in people setting up business here. This is especially noticeable in the Algarve. Thirty or so years ago the majority of people settling here were in retirement or early retirement. These days Portugal is increasingly the choice for younger people who come here to set up their business and escape the stress and increasingly unstable situation in the North of Europe.

Almost every skill is needed, and opportunities abound. The vast majority are successful, they may not make fortunes (except in real estate) but enjoy a much less stressful life and a much better climate. Now with some of the best and fastest internet connections in Europe, remote workers are taking advantage of what Portugal has to offer in terms of lifestyle.

Setting up a business in Portugal

Despite what you may have imagined or even been told, Portugal welcomes people who want to help build the local economy. Bureaucracy is a challenge, it is in every country, but it’s mostly very straightforward. You will need a ‘fiscal’ (tax) number before you can do anything. The local tax office will give you a tax number, you will need to show them proof of identity. Once you have that you can open a bank account. The banks will need to see your tax number as well as your passport or similar identity documents. They want your business. Getting a bank loan to start a business here will be a challenge. Like every country, banks want to see established and successful businesses with financial history. You need to be able to finance your business from the start.

There are many companies, lawyers, and accountants who will be happy to help you set up if you need help. Nearly everyone speaks English and are used to helping people register, open accounts, etc.

A company in an hour

Registering a company is quick and simple if you choose to use the government system, the cost is €360. The government has established a 'company in an hour’ desks from North to South of the country, Faro to the Spanish border in the North.

With this service your choice of company names is limited. If you need a specific name and more detailed company articles of association, you may be better off using a lawyer or accountant. It will take a little longer, but you will get exactly what you need.

To set up a business in Portugal, it is important to conduct market research and identify a viable business idea. This involves analysing the market demand for the product or service and identifying potential competitors. Once a viable business idea has been identified, you should develop a business plan that outlines the products or services, target market, and financial projections. The business plan will also include details on the legal structure chosen and the necessary permits and licenses required.

Get to know the market

Despite the many opportunities for businesses in Portugal, there are also several challenges that must be navigated. Firstly, it is important to understand the cultural and business norms in Portugal. Portuguese business culture values personal relationships, and it may take time to establish trust and build a network of contacts. There are many chambers of commerce in Portugal representing businesses and people from your home country. They have valuable insights into the local market. They also have social events where you can meet other businesspeople and develop relationships with others in your type of business. It’s in Portuguese but Google will translate for you. Becoming a member of a chamber of commerce would be a good investment.

Get professional help

Do a little research and ask for recommendations. You will find some of the international legal and accounting partnerships, and they have extensive knowledge and in-house specialists in most areas. Local lawyers are plentiful, and they know local conditions and probably have extensive contacts in your chosen area. Choose the size of your advisors depending on the size and requirements of your proposed business.

The Portuguese government has put nearly everything online, from car tax to annual tax returns. If you plan to be a sole trader or small business, the tax office has a service for you to download receipts for your clients. Think very carefully before starting a ‘cash-only’ small business. The tax office is highly automated and ever-watchful.

Very little escapes their attention.

Do your homework, it’s worth it

In conclusion, setting up a business in Portugal requires compliance with legal requirements, careful planning, and navigating cultural and bureaucratic challenges. However, the opportunities for entrepreneurship and business development in Portugal are numerous, and with the right approach, you can establish successful businesses in this vibrant business environment.

Add to that the best lifestyle you will find in Southern Europe and setting up business in Portugal could be a rewarding move.

Author

Resident in Portugal for 50 years, publishing and writing about Portugal since 1977. Privileged to have seen, firsthand, Portugal progress from a dictatorship (1974) into a stable democracy. 

Paul Luckman