Subsidiaries opened in Portugal are forms of businesses that can be established by foreign company owners who want to have limited liability in the company’s actions. A subsidiary registered in Portugal is considered a legal entity and can hire personnel and conclude contracts without the approval of the foreign company. The main difference between a regular company and a Portuguese subsidiary is that the capital of the last one is owned partially or entirely by the foreign company. Assistance in opening a subsidiary in Portugal can be entirely provided by our company formation specialists in Portugal at any time.
| Quick Facts | |
|---|---|
| Applicable legislation (home country/foreign country) |
Company Law in Portugal |
|
Best used for |
– banking, – insurance, – telecommunication, – IT |
|
Minimum share capital |
Yes |
| Time frame for the incorporation (approx.) |
2-4 weeks |
| Management (local/foreign) |
Local |
| Legal representative required |
Yes |
| Local bank account |
Yes |
| Independence from the parent company | Yes |
| Liability of the parent company | No, the subsidiary is fully liable |
| Corporate tax rate | 21% |
| Possibility of hiring local staff | Yes |
Table of Contents
What is the registration process of a company in Portugal in 2024?
A foreign company can easily open subsidiaries in Portugal, mentioning the fact that these have the same rights and obligations as the local companies in Portugal. Below is information about the main requirements for establishing a subsidiary in this country:
- A declaration stating that the Portuguese company intends to open subsidiaries is requested by the authorities.
- Subsidiaries formed in Portugal can be registered as limited liability companies, private or public.
- The private limited liability companies (sociedade por quotas) are forms of business adopted especially by small and medium-sized companies in Portugal.
- At least two members must set up this type of business with a minimum share capital of EUR 5,000, divided into non-transferable shares.
It is important to know that the shares cannot be registered at the stock market and the liability of the members is limited by their contribution to the capital. Our agents can explain the business requirements for Portugal in 2024. According to the Portuguese Company Act, subsidiaries in this country should have fewer than 50 employees, combined assets not exceeding EUR 1,5 million, and revenues under EUR 3 million.
Incorporating a public LLC in Portugal
The public limited liability company in Portugal (sociedade anónima) is a form of business adopted especially by large corporations for which at least EUR 50,000 as an initial contribution is needed. This is a great option for those interested in subsidiaries in Portugal, for which a minimum number of five shareholders is mandatory to be incorporated. Just like in the case of the private limited liability companies in Portugal, the founders’ liability is limited to the amount of their contribution, mentioning that the shares can be registered on the stock market with freely transferable status.
3 ways to establish a subsidiary in Portugal
Foreigners who want to conduct their business in Portugal and register a subsidiary can opt for one of the 3 available methods:
- In-person is one of the options. This means that the person who wants to set up a subsidiary in Portugal goes with all the documents to the relevant local authorities. LLCs or public limited liability companies can be established for subsidiaries in Portugal.
- Online registration of a subsidiary in Portugal is possible. In this case, the documents requested by the authorities can be uploaded for verification. Next comes the opening of a bank account, registration for the payment of taxes and social contributions, etc. Here our Portuguese agent with experience in company formation in Portugal can represent and help you.
- The traditional way of registering a subsidiary in Portugal involves appointments with the relevant authorities. The process itself may take longer, depending on market requirements and the date of appointment. We recommend registering online with the help of a specialist in the field.
Opening a company in Portugal is a fairly simple process, including if you choose to register a subsidiary. Our local agents communicate with the authorities involved in the incorporation process and discuss the preparation of all documents with the clients. It should be noted that once the documents are accepted and the incorporation is completed, the authorities issue the Certificate of Registration.
Here is a video presentation with information about subsidiaries in Portugal and the ways in which these can be registered:
A bank account for a subsidiary in Portugal
Each company formed in Portugal cannot commence the activities without a local bank account. A provisionary bank account can be opened for depositing the minimum share capital of the company, and eventually can transform it into a permanent one, connected to all the financial transactions of the firm. The banking system in Portugal consists of local and foreign banks and other financial institutions which can be chosen for subsidiaries in Portugal. If you need assistance for opening a bank account for your subsidiary in Portugal, we suggest you address to our team of company incorporation agents in Portugal and solicit assistance and support.
Subsidiaries involved in taxable transactions in Portugal must be registered for the payment of VAT. This registration is made with the Tax and Customs Authority in Portugal. Besides that, take into account that specific business licenses might be required for your future operations under a subsidiary in Portugal.
Accounting requirements for subsidiaries in Portugal
From the start, one should know that the International Financial and Reporting Standards (IFRS) apply to any kind of company in Portugal, alongside the national legislation. In matters of accounting reports, the company’s financial statements consist of a balance sheet, the profit and loss account plus the annual financial report. The certification and auditing of companies in Portugal are normally conducted by a statutory auditor, whose actions are overseen by several bodies and authorities in the country. All the declarations and accounts must be submitted through IES or the Simplified Business Information system in Portugal.
As an additional fact, it is good to know that many subsidiaries in Portugal outsource accounting services instead of having an entire department established in the company. If you are interested in complete accounting services for your subsidiary in Portugal in 2024, you may get in touch with our team of advisors and ask for support in this direction.
What to do after registering a subsidiary in Portugal
Setting up a company in Portugal is not limited to the formalities and procedures presented above in this article. Once the subsidiary is registered in Portugal, the following can be undertaken:
- Subsidiary registration with the Registo Central de Beneficiátio Effective (RCBE) is required. This ensures the smooth functioning of the company when it comes to the distribution of profits, signing business contracts, and more.
- One can implement company regulations, hire staff, and register employees with the appropriate authorities.
Differences between branches and subsidiaries in Portugal
The level of independence is crucial when deciding whether to choose a branch or a subsidiary in Portugal. This is the main difference between the two entities, highlighting the fact that subsidiaries are separate legal entities that can run freely from the parent company, even if the same operations are established. In the case of branches, things are quite the opposite, meaning that the foreign company is entirely liable for the debts and liabilities of the branch established in Portugal. When it comes to taxation, subsidiaries have a different status, referring to the fact that the worldwide profits will be levied compared to branches for which only the incomes derived in Portugal will be levied.
How many companies operate in Portugal?
Portugal is an excellent business destination for foreign entrepreneurs due to the diversity of the market, multiculturalism, the optimal climate for business development, and many more. Here are some statistical data about active companies in Portugal:
- According to the latest data, there are over 594,000 registered companies.
- Most companies in Portugal operate in the services sector, over 224,000.
- In Portugal, there are more than 67,000 real estate companies.
Please feel free to contact our specialists in company formation in Portugal for more details regarding subsidiaries in this country. We can also put you in contact with our partners in Spain if you want to open a company in this country and register for VAT in 2024.