Thinking of starting a company in Portugal? Here is a step-by-step guide to starting a company in Portugal, even if you’re not an EU citizen, including visa requirements, market analysis, business entity types, and legal paperwork.
If you are considering starting a business, Portugal is an excellent option. The country has several advantages that make it an attractive destination for businesses of all sizes.
In southwestern Europe on the Iberian Peninsula, Portugal is a member of the European Union and the Eurozone. The Portuguese economy is mixed, with a strong focus on tourism, manufacturing, and agriculture. This country has a relatively low cost of living and a skilled workforce, making it an attractive destination for most types of businesses.
The Portuguese bureaucracy can be complex and time-consuming, and there are a number of legal requirements that businesses must comply with. Our article will walk you through the steps involved in starting a company in Portugal, from visa requirements to identifying your USP.
If you are serious about starting a business in Portugal, we encourage you to follow these essential steps. This guide is a valuable resource that can help make the process as smooth and successful as possible.
Before you decide to head towards Portugal for company formation purposes, it’s important to know your visa eligibility criteria and requirements (if you need to be eligible).
1. EU Citizens:
EU citizens generally have the right to establish a business and work in Portugal without needing a visa. They can freely travel, live, and work within EU member states, including Portugal. EU citizens can establish a company in Portugal following the same procedures as Portuguese nationals.
2. Non-EU Citizens:
Non-EU citizens interested in forming a company in Portugal must follow specific visa and residency requirements. The main types of visas relevant to company formation are as follows:
- Entrepreneur Visa:
The Portuguese Entrepreneur Visa is designed for non-EU citizens who intend to establish and operate a business in Portugal. Applicants typically need to meet particular investment and job creation criteria to qualify. The specific requirements may include:
- A viable business plan.
- A minimum level of investment in the business.
- Creation of jobs for Portuguese residents.
- Startup Visa:
The Startup Visa is aimed at innovative entrepreneurs and tech startups that wish to establish their businesses in Portugal. To be eligible, applicants often need to meet criteria related to innovation, scalability, and potential for job creation.
- Investor Visa:
For individuals who wish to invest significant capital in Portugal, the Investor Visa may be an option. This typically involves a substantial financial investment in a qualifying business or real estate and other requirements.
- Golden Visa:
The Golden Visa program allows non-EU citizens to obtain residency in Portugal by making qualifying investments, including business investments. This program has various investment options, such as real estate, job creation, capital transfer, or research activities.
Select A Niche
Choosing a niche or particular sort of market to serve consumers with goods or services is the first step in beginning a company. This is typically the most research-intensive and time-consuming step in this guide. However, performing due diligence in this step can save a lot of costs in upcoming steps and make you identify your Unique Selling Point.
This can help you build a following of devoted clients, boost sales, and develop a successful company. Here’s how you can find your unique niche according to the Portuguese market and demands:
- Start with your passion and interests.
What are you passionate about? What are you interested in? These are great places to start when looking for a niche product to sell. If you’re passionate about something, you’re more likely to be successful in selling products related to that passion.
- Identify a problem or need that your target market has.
Once you’ve identified your passion, take some time to think about the problems or needs that your target market has. What are they struggling with? What are they looking for? Once you know their problems, you can start thinking about how you can solve them with your product or service.
For example, if your target market is busy professionals (which you’ll come across commonly in Portugal), they might be looking for a product that can help them save time or make their lives easier. You could start a company that sells meal kits or pre-made lunches that they can heat up and eat when they are short on time or energy.
- Do your research.
Once you have a few ideas for niche products, it’s important to research to see if there’s a market for them. This means looking at the competition, the demand for the product, and the pricing.
You can use online tools like Google Trends and SEMrush to research your competition and the demand for your product. You can also talk to potential customers for feedback on your ideas.
- Be creative and innovative.
Feel free to be creative and innovative when finding your niche product. The best niche products are the ones that are unique and offer something that no one else is doing.
For example, if you’re selling kitchenware, you could develop a line of products designed for people with disabilities. Or, if you’re selling travel guides, you could create a guide that focuses on sustainable travel.
- Test and iterate.
Once you’ve come up with a few niche product ideas, testing them out and iterating on them is essential. This means getting feedback from potential customers and making product changes based on their feedback.
Do Market Research
Market research gathers market information, such as size, growth potential, and customer demographics. It can be used to identify new opportunities, assess the competition, and make better decisions about your business.
Here is why you should do market research:
To identify new opportunities. Market research can help you to identify new product or service opportunities, new markets to enter, or new ways to reach your target customers.
To assess the competition. Market research can help you understand your competitors, their strengths and weaknesses, and their strategies. This information can help you develop a competitive advantage.
To make better decisions. Market research can help you make better decisions about your business, such as what products or services to offer, how to price your products or services, and how to market them.
Choose a Business Structure
After you’ve done your market research and found your unique selling points, you should decide which business structure you will adopt to offer your product/services. Here are the existing business structures in Portugal:
- Individual Entrepreneur (Empresário em Nome Individual)
- Individual Limited Liability Establishment (Estabelecimento Individual de Responsabilidade Limitada)
- Sole Proprietorship (Sociedade Unipessoal por Quotas)
- General Partnership (Sociedade em Nome Coletivo)
- Limited Partnership (Sociedade em Comandita)
- Private Limited Company (Sociedade por Quotas)
- Public Limited Company (Sociedade Anónima)
Have A Business Plan
If you’re happy with what you’ve achieved so far, it’s time to shape your business plan. Many businesspeople and entrepreneurs skip this step, but it’s a big mistake. Starting a company without a solid business plan can lead to failure, even if your business has great potential.
Keep your business plan straightforward and up-to-date. Avoid creating a plan solely based on your hopes, as they might not align with reality. A business plan is not a one-time document. It should be updated regularly to reflect changes in your business, such as new products or services, changes in the market, or changes in your financial situation.
The specific contents of a business plan will vary depending on the size and complexity of your business, but there are some typical sections that most business plans include:
- Executive Summary: An overview of the business plan, highlighting key points.
- Company Description: Detailed business description, products/services, target market, and competition.
- Products and Services: Description, features, benefits, and pricing of offerings.
- Marketing Plan: Strategies for reaching the target market and driving sales.
- Management Team: Introduction to the experienced team.
- Financial Plan: Projection of financial performance, including revenue, expenses, and cash flow.
- Appendix: Additional supporting materials.
Start Legal Work Along the Way
Now that you’ve pinned down your preferred business structure and plans, starting your registration process can take a long time in Portugal.
Here’s what you need to do:
- Check and reserve company name.
- Appoint an official representative.
- Draft Articles of Association.
- Get a bank account and deposit capital.
- Submit incorporation documents.
- Obtain Tax Number (Tax ID): Non-residents (individuals and entities) need a tax number. EU residents get it directly; others appoint a tax representative.
- Register in Business Register.
- Tax and Social Security registration.
Have a Lead-Generating Marketing Plan
While your paperwork is done, you must start working on your marketing plans and strategies to gain initial customers. Having a marketing plan in place will not only attract new customers but will also give you further analysis of how your target audience is reacting to your advertisement strategies:
There are multiple tactics to attract your audience in the first place, however, we recommend making use of these to gain traction:
- Content marketing: Creating and publishing high-quality content that attracts and engages your target audience.
- Social media marketing: Using social media platforms to connect with and build relationships with your target audience.
- Search Engine Optimization (SEO): Improving your website’s visibility in Search Engine Results Pages (SERPs).
- Pay-Per-Click (PPC) advertising: Using paid ads to target your target audience on search engines and other websites.
- Email marketing: Sending regular emails to subscribers with updates about your business, products, and services.
- Events: Hosting or attending events that your target audience is interested in.
Launch Your Company
Congrats! You’ve done all the necessary paperwork and planning along the way. Now, it’s time to take your business to the market and launch it. You can launch your business in various manners, through an event inviting your target market or through a website launch or giveaways. The options are endless!