international employment law firm alliance L&E Global

Starting a business in Portugal

1. Introduction

Portugal is still perceived as a frustrating country to start a business. The bureaucracy associated together with some difficulty in accessing complete and credible information contribute to this generalised idea. Nevertheless, Portugal has never been so attractive for foreign investment as now and the last few years have witnessed the implementation of a number of measures that have reduced bureaucracy towards citizens and corporations. In Portugal, the process of opening up a shop has been made significantly easier through simplified incorporation requirements available in the «on-the spot firm» (“Empresa na Hora”) incorporation procedure. This procedure enables setting-up companies in an hour at a single contact point in one of the desks available throughout the country, regardless of the specific location of the company’s registered office in Portugal. An alternative swift incorporation procedure is offered through the «online company» (“Empresa on-line”) which enables the company set-up procedure to be completed online in a day or two.

Morais Leitão, Galvão Teles, Soares da Silva & Associados – Sociedade de Advogados, SP, RL. (Morais Leitão) is a full service law firm with long experience of leadership in the Portuguese market. Internationally renowned, it has earned a reputation for excellence among peers and clients in relation to the high level of services provided to clients, solid ethical values and a distinctive approach with cutting edge solutions, translated into successive and consistent recognition in awards given to the firm and its individual lawyers. Both in a consultancy capacity and in litigation before labour courts, Morais Leitão provides daily assistance to a vast number of companies, from multinationals to start-ups. Through the network Morais Leitão Legal Circle, Morais Leitão presents a team of more than 250 lawyers, with office in Portugal (Lisbon, Porto and Funchal), Angola, Cape Verde and Mozambique.

2. Labour and Employment Law Requirements


In order to be legally compliant, employers are required to create and implement an anti-harassment policy (whenever the company has at least seven employees). A whistleblowing policy and reporting line and anti-corruption policies must also be adopted in companies with 50 or more employees.

Employers may put in place other policies to rule work conditions, benefits and other employment relevant issues, assuming they do not contravene Portuguese mandatory employment rules.


Under Portuguese law, employees must be provided a minimum of 40 hours a year of continuous professional training or, to a pro-rated number of professional training hours (in temporary contracts with a duration of three months or more), which content is determined by agreement between employee and employer or, failing this, by the employer, in which case professional training must be related to or aligned with the job role.

Annually, employers are required to provide training to at least 10% of the employees, which can be anticipated or deferred, if set forth in the company training plan, for up to two years.

Hours of training which are not provided are, after two years, converted into a remunerated credit of hours in equal number that may be used for training by the initiative of the employee. Upon contract termination an equivalent of accrued unused professional training hours must be paid to the employee, subject to a limitation period of, in practical terms, roughly five years.


From the labour standpoint, the first steps to have in mind when opening a shop in Portugal, are the following:

  • Enter into employment agreements

Although as a rule, employment agreements are not subject to statutory written form some forms of employment – such as term and part-time employment agreements – are mandatorily required to be entered into in writing. In addition, the employer is required to provide written information on the employment conditions and other relevant information to the employees, at the beginning of the employment relationship. When the employment agreements cover the issues that are subject to information provision, the employee information duties are deemed to have been fully fulfilled.

Therefore, it is advisable to enter into written employment agreements in all cases.

  • Register each employee with the Social Security

Online at within 24 hours preceding the employment agreement’s entry into force in order to proceed to monthly contributions at the general rate of 34.75%, of which 23.75% are borne by the employer and 11% by the employee.

  • Adhere to the Work Compensation Fund [“Fundo de Compensação do Trabalho” (“FCT”)] and to the Work Guarantee Compensation Fund [“Fundo de Garantia de Compensação do Trabalho” (“FGCT”)] for each employee

Until the entry into force of the employment agreements, in order to proceed to monthly contributions at the rate of 0.925% to the FCT and of 0.075% to the FGCT.

  • Subscribe a work accidents insurance and include each employee
  • Contract health and safety services
  • Implement a working time map and recording system
  • Implement mandatory policies as indicated above

Please note the Portuguese Labour Code requires employers to keep the following information on recruitment processes launched (disaggregated by gender of candidates) for a period of 5 years: a) invitations for available positions; b) employment offer advertisements; c) number of candidates for CV appraisal; d) number of candidates called for pre-selection interviews; e) number of candidates awaiting recruitment; f) admission or selection test results and g) social reports performed to assess possible gender discrimination in the access to job positions, training, promotions and work conditions.

3. Corporate Law Requirements


There are a number of corporate structures available in Portugal. Hereunder we have considered the steps and requirements for the incorporation of a limited liability company, which is the structure most commonly used. There are two different types of limited liability companies in Portugal: (i) the limited liability company by shares (SA); and (ii) the limited liability company by quotas (LDA).

There are three possible procedures to incorporate and register a Portuguese company: (i) the conventional method; (ii) the «on-the spot firm» (“Empresa na Hora”); and (iii) the «online company incorporation» (“Empresa on-line”).

  • The conventional method

Anyone who wishes to incorporate a company in Portugal through the conventional method must follow a number of steps and requirements that are needed in order to ensure compliance with Portuguese law:

  1. Apply for the approval of the company’s proposed name with the National Registry for Corporate Entities [“Registo Nacional de Pessoas Colectivas” (RNPC)]. With the approval of the name, a provisional tax identification number is issued for the company. For this purpose, the information that will be required includes, among others: (i) company name (it may be presented three alternatives), (ii) municipality for the company and (iii) corporate purpose of the company;
  2. Request a Portuguese tax number for all non-Portuguese shareholders[1];
  3. Prepare and draft the company by-laws. For this purpose, the information that will be required includes, among others: (i) company name, (ii) head office in Portugal, (iii) corporate purpose, (iv) share capital, and (v) shares/quotas nominal value, and (vi) the identification of the ultimate beneficial owner(s) of the company;
  4. Select the company Corporate Bodies (Board of directors/managers and auditor – if applicable). For this purpose, the following information regarding the company directors/managers will be required: (i) full name, (ii) nationality, (iii) address, and (iv) Portuguese tax number;
  5. Open a bank account in the Company’s name and deposit cash contributions towards share Please note that the minimum share capital for a limited liability company by shares is €50,000 and for a limited liability company by quotas €1 per quota/shareholder. In the latter case the share capital in cash can be deposited until the end of the first financial year. If the company capital is paid-up in kind, the relevant assets should be subject to prior evaluation and report by an external auditor;
  6. Formalize the company incorporation deed by signing a written document (documento particular)[2]; the shareholders’ signatures in the incorporation document must be certified in the presence of a lawyer, a notary or any other entity authorised for such effect;
  7. Request the registration of the company incorporation – once the private written document is executed – before the Commercial Registry Office. For the registration of the directors/managers and auditor, signed letters of acceptance must be submitted;
  8. For the registration of companies whose incorporation is dependent on any special authorisation, it is necessary to attach a document proving that such authorisation has been granted.
  • «Empresa na Hora» and «Empresa on-line»

In the «Empresa na Hora» procedure ( the company is immediately incorporated and registered in one visit by the investor to a single registry office.

In the procedure «Empresa on-line» the company is incorporated and registered by accessing the official Portuguese business website ( using a digital certificate.

If the shareholders decide to incorporate the company through any of these two procedures, they must:

  1. Choose a pre-approved company name which is a fantasy name created and reserved by the Portuguese authorities for the purpose of incorporating a company. The pre-approved company name can also be associated with a preregistered trademark. Reference to the company’s business activity may be added by the company founder to the pre-approved company name;
  2. If the shareholders decide not to use one of the pre-approved company names, it is possible in the procedure «Empresa on-line» (i) to request the automatic approval of a company name composed from the names of the company’s founders (individuals), or (ii) to request the approval of a company name. In both «Empresa on-line» and «Empresa na Hora» it is also possible to present a certificate of approval of the company’s name previously obtained from RNPC;
  3. As far as the by-laws are concerned, the shareholders have to choose one of the pre-approved by-laws available (in «Empresa na Hora») or may choose to submit the by-laws drawn-up and signed by them with the signatures certified in the presence of a lawyer, a notary or by any other entity authorised for such effect or to adopt one of the pre-approved by-laws (on «Empresa on-line»);
  4. In these two procedures the share capital in cash shall be deposited within 5 days following the incorporation, or, when permitted by law, until the end of the first economic year;
  5. For the registration of the directors/managers and auditor, signed letters of acceptance must be submitted.

A new and improved online platform for the online company incorporation is being developed by the competent authority, so there may be new developments in this procedure soon.


  1. The company must register its business activities before the tax authorities within fifteen days counting from the request of the company’s incorporation registration. The certified accountant [“”Contabilista certificado”] who shall henceforth be responsible for the company’s accounts must sign this tax registration request;
  2. The registration of the company and the inscription of the members of the corporate bodies with the social security operate ex officio, based on information exchanged between the commercial registry office and the tax authorities. However, the company will have to provide social security information required to qualify the directors as being subject to (or, otherwise, excluded from) payments to the Portuguese social security;
  3. The registrar communicates the incorporation to the competent authorities, in particular, to the tax authorities and to the social security;
  4. Opening of the minutes books for the new company and the share issuance registry book and issuance of share certificates – when applicable;
  5. Within 30 days after the registration of the company, the ultimate beneficial owner(s) of the company will have to be registered in the Portuguese official platform (“Registo Central do Beneficiário Efetivo”).

[1] If the shareholders are legal persons, within 30 days after obtaining the Portuguese tax number, their ultimate beneficial owner(s) will have to be registered in the Portuguese official platform.

[2] The incorporation of a limited company does not require the execution of a public deed unless real estate assets are transferred to the company by way of capital contributions.

4. Payroll and Benefits Providers

In Portugal, it is common to outsource payroll and benefit responsibilities to third party companies, except for larger employers who often have their own internal teams processing payroll.


We are pleased to offer our services for all the required work identified above and assist your organization to open in Portugal.

Any questions

Ask our member firm Morais Leitão in Portugal