How to Form a Company in Portugal (Including NHR Tax Status) — 2026 Guide

Portugal in 2026: What Changed?

Portugal's Non-Habitual Resident (NHR) regime closed to new applicants on January 1, 2024. However, a successor regime — IFICI (Incentivo Fiscal à Investigação Científica e Inovação) — was introduced, targeting tech workers, researchers, and qualified professionals. While narrower than the original NHR, IFICI still offers significant benefits for qualifying individuals.

Existing NHR holders (registered before January 1, 2024) keep their status for the full 10-year period.

• For company formation purposes, Portugal offers:
• Competitive 21% corporate tax (with SME reduction to 17% on first €50,000 profit)
• EU Single Market access
• Low cost of living for founders who relocate
• Golden Visa program (investment-based residency) — still active for qualifying investments
• Strong banking infrastructure and EU membership

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Entity Type: Sociedade por Quotas (Lda)

The Portuguese private limited company equivalent. Minimum capital: €1 (effectively zero-capital like a UK Ltd). Can be formed by a single shareholder. A director (gerente) can be non-resident.

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Step 1: Use the Empresa na Hora Service (1 Day)

• Portugal offers one of Europe's fastest company registration services: Empresa na Hora ("Company in an Hour"). Walk into any participating IRN (Institute for Registries and Notaries) office and form a company on the spot. Key requirements:
• Choose a name from a pre-approved list (immediate approval) OR apply for a name certificate (RNPC — takes 3–5 days)
• All shareholders and directors must be present, OR grant power of attorney
• Pay the €360 registration fee

The company is incorporated immediately. You leave with a company certificate, NIF (tax number), and social security registration.

Online alternative: The Empresa Online portal allows formation via internet if all parties have a Portuguese digital certificate (Chave Móvel Digital or Cartão de Cidadão) or via notary PoA.

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Step 2: Obtain a Portuguese NIF

Every director, shareholder, and the company itself needs a Portuguese NIF (Número de Identificação Fiscal — tax ID). Non-residents can obtain a NIF at a Portuguese tax office, through a Portuguese consulate, or via a fiscal representative in Portugal. Getting a NIF as a non-resident typically takes 1–2 weeks.

This is often the bottleneck for non-residents — get your NIF before attempting company formation.

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Step 3: Open a Portuguese Bank Account

• Options:
• Banco Best, Activobank (online-first Portuguese banks) — more accessible for non-residents
• Millennium BCP, Caixa Geral — main high-street banks; require in-person visit
• Wise Business, Revolut Business — functional alternatives if you don't need a Portuguese IBAN initially
• For residents: N26 (German bank) — operates in Portugal and is easy to open

For a Lda operating in Portugal, a Portuguese bank account is strongly recommended for VAT refunds, employee payments, and local supplier relationships.

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Step 4: Register for VAT (IVA)

Portuguese VAT (IVA) standard rate: 23% (mainland), 18% (Azores), 16% (Madeira). Registration required when taxable turnover exceeds €13,500/year (one of the lowest thresholds in Europe). Most businesses should register immediately.

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Step 5: Understand Portuguese Corporate Tax

• Standard rate: 21%
• SME reduced rate: 17% on first €50,000 of taxable income (requires turnover < €50 million and < 250 employees)
• SIFIDE II R&D credit: Up to 82.5% tax credit on qualifying R&D expenditure — one of Europe's most generous
• Capital gains on shares: 10% for qualifying participations held for 12+ months (under participation exemption conditions)
• Dividend withholding tax: 25% (domestic rate, reduced by treaties — Portugal has 70+ tax treaties)

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The NHR/IFICI Regime and Your Company

If you personally relocate to Portugal and qualify for NHR (pre-2024 registrations) or IFICI (post-2024, for qualifying professions), your personal tax situation improves dramatically:

• NHR benefits (existing holders):
• Foreign-source income (dividends, interest, capital gains, rental income from abroad) potentially exempt from Portuguese personal income tax, or taxed at 10%
• Portuguese-source professional income taxed at flat 20% (vs standard progressive rates up to 53%)
• Valid for 10 years

• IFICI benefits (new applicants from 2024):
• Targeted at researchers, qualified professionals in strategic sectors (tech, science, finance)
• 20% flat rate on Portuguese-source income
• Exemption on foreign-source income under conditions similar to NHR

• For a founder who owns a Portuguese Lda AND qualifies for NHR/IFICI:
• Company pays 17–21% CT on profits
• Dividends to the founder are potentially exempt from Portuguese personal income tax (under NHR) or taxed at reduced rates
• Overall effective rate can be as low as 17–21%

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Common Mistakes

Trying to form a company before getting your NIF. The NIF is a prerequisite. Get it first — it takes 1–2 weeks and is the most common bottleneck for non-residents.

Assuming NHR applies automatically. You must register for NHR/IFICI status with the Portuguese tax authority within specific deadlines after establishing residency. It is not automatic.

Using a standard Lda for a holding company without considering the participation exemption. Portugal has a solid participation exemption (SGPS — Sociedades Gestoras de Participações Sociais) but it has specific conditions. Get tax advice before using a Portuguese Lda as a holding vehicle.

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FAQs

Do I need to live in Portugal to own a Portuguese Lda? No. Non-residents can own 100% of a Portuguese Lda. However, the tax benefits of NHR/IFICI only apply if you personally become Portuguese tax-resident (183+ days/year or main home in Portugal).

What is the Portugal Golden Visa? The Portugal Golden Visa program allows non-EU citizens to obtain Portuguese residency through qualifying investments. As of 2024, real estate investment has been removed as a qualifying category; qualifying investments now include investment funds, job creation, cultural heritage, and capital transfers. It leads to permanent residency after 5 years and citizenship after 5 years of residency.

Can I use a Portuguese Lda to access EU VAT OSS? Yes. A Portuguese Lda is an EU company and has full access to the EU VAT One-Stop-Shop system for B2C digital sales to EU consumers.

What is the corporate tax rate for small Portuguese companies? 17% on the first €50,000 of taxable income, 21% above that, for companies meeting the SME criteria (turnover < €50M, fewer than 250 employees).

Is Portuguese the official language of business filings? Yes. All statutory documents, accounts, and tax filings must be in Portuguese. Use a Portuguese accountant (€100–300/month for basic services).