Aug 19 • Legal & Practical Tips
Starting a Business in Portugal on a Low Budget
A. Sole Trader (ENI – Empresário em Nome Individual)
Best for: Freelancers, small service providers, individual entrepreneurs.
Advantages:
Very cheap to start (can be under €50 if done online).
Simple accounting (sometimes no need for certified accountant if turnover < €200,000/year).
Lower bureaucracy.
Steps:
1. Get a NIF (Número de Identificação Fiscal) Portuguese tax number (needed for any legal activity).
2. Register as ENI at Portal das Finanças (Tax Office) or Empresa na Hora desk.
3. Open a bank account (for business activity, though you can use personal for ENI).
4. Choose a CAE code (business activity classification).
5. Register with Social Security – contributions are mandatory (approx. 21.4% of declared income, with exemptions in first year).
6. Issue invoices with an approved invoicing system (Programa de Faturação or Finance portal).
Ongoing costs:
No share capital required.
Accountant optional (unless VAT registered or above turnover threshold).
Social Security contributions after first year.
B. LDA (Sociedade por Quotas – Private Limited Company)
Best for: Startups, businesses with partners, limited liability, international trade.
Advantages:
Liability limited to company’s assets.
More credibility with banks/partners.
Can apply for business visas or residence permits easier.
Steps:
1. Get NIF for each shareholder/director.
2. Reserve a company name at RNPC (Registo Nacional de Pessoas Colectivas) OR choose a pre-approved name at Empresa na Hora.
3. Draft articles of association (Estatutos).
4. Deposit share capital (minimum €1 per shareholder, but usually €1,000+ for credibility).
5. Register the company officially at Empresa na Hora or Conservatória do Registo Comercial.
6. Declare start of activity at Portal das Finanças.
7. Register with Social Security.
8. Hire a Certified Accountant (mandatory).
Ongoing costs:
Certified accountant fees (≈ €100–300/month).
Social Security for directors (€200–350/month minimum).
Corporate income tax (IRC) – 21% national + surtaxes.
2. Golden Visa Connection
Portugal’s Golden Visa is a residence permit for investors, not for small sole traders. However, there are business-related routes:
1. Incorporate a company (LDA) and:
Invest at least €500,000 in share capital OR
Create 10 jobs (can be reduced to 8 in low-density areas).
2. Startup / Innovation Visa (different from Golden Visa):
Allows entrepreneurs with innovative ideas to live and build their business.
Requires incubation support rather than high investment.
3. D2 Visa (Entrepreneur/Independent Professional Visa):
Much more realistic for sole traders or small LDA owners.
Requires proof of business plan, contracts, or financial means (usually €5,000–€10,000+ in a Portuguese bank).
Gives residence permit, renewable, leading to citizenship after 5 years.
Cheaper and better for freelancers/small businesses than Golden Visa.
3. Key Bureaucratic Steps (Summary Checklist)
- NIF → must have one before anything.
- Portuguese bank account.
- Register business (ENI or LDA).
- Social Security registration.
- Declare activity at Finanças (Tax Office).
- Invoicing software (or Portal das Finanças).
- Accountant (mandatory for LDA, optional for ENI if small).
4. Which Is Cheaper?
- Sole Trader (ENI)
- Initial cost: < €50.
- Ongoing: Social security (after 1st year), optional accountant.
- Best for: Freelancers, small online businesses, service providers.
LDA:
- Initial cost: €360–€500 (registration + notary + share capital).
- Ongoing: Accountant (€100–300/month) + taxes.
Best for: If you want limited liability, credibility, or applying for Golden Visa/D2 Visa.
👉 Recommendation:
If you’re starting lean → ENI first.
If you need liability protection, investors, or visa options → LDA.
For immigration purposes with low cost → focus on D2 Visa, not Golden Visa (which requires high investment).
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Starting a Business in Portugal on a Low Budget
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