Portugal is an attractive country in which businesspersons can open holding companies if they understand and respect particular conditions, from which we remind that it is necessary to obtain specific licenses in the Free Trade Zone of Madeira to obtains numerous advantages. A holding company in Portugal is an important business form which possesses shares in other entities which are free to operate according to their plans, with no other interventions. If you want to set up a holding company in Portugal, we invite you to solicit guidelines and complete information from our company formation specialists in Portugal.
Details about holding companies in Portugal
When registering a holding company in Portugal, one should know that the dividend income obtained by this type of entity from the subsidiary can be exempt from the corporate tax rate in the holding company’s authority. Besides that, the following aspects must be met when opening a holding company in Portugal:
- • the profits or the capital gains of a holding company in Portugal are subject to a low tax rate;
- • if the holding company pays incoming or outgoing dividends to the parent company from overseas, the withholding tax rate will be reduced or eliminated.
Our company formation agents in Portugal are here to offer comprehensive information about how to set up a holding company in the country and about the taxes imposed on such business. The company registration procedure in Portugal is an effortless process which can be entirely guided by our team of advisors.
What is the purpose of a holding company in Portugal?
The management of the shareholdings in other companies that carry economic activities in Portugal is the sole purpose of holding companies established in this country. Having at least a 10% share in a company offers lots of advantages among which, the voting right. More than that, having a holding company can allow you to provide technical management, if a written agreement in this sense is made, as it is the case of subsidiaries. For more details about these aspects and about how to establish holding companies in Portugal, you can talk to one of our company formation representatives in Portugal.
Audits for holding companies in Portugal
A certified auditor needs to be appointed by holding companies in Portugal. These specialists must report to the General Tax Inspectorate in Portugal and provide the list of all stockholdings consisting of financial investments, as the law obliges. Such a report must be made on a yearly basis, and support in this matter can be obtained from one of our representatives in Portugal.
Planning the opening of a company in Portugal must also take into account the employment of a team of accountants in Portugal, in exchange for the establishment of an entire department in this regard. Besides the fact that they are advantageous prices, clients can benefit from important services such as payroll, bookkeeping, preparation and submission of annual financial statements, and HR solutions among others. It is good, therefore, to align yourself with the current legislation, also taking into account that our specialists will implement any changes made regarding accounting.
Taxation of holding companies in Portugal
Having a holding company in Portugal means taking advantage of an appealing tax regime where there is no capital gains tax and no corporate tax. The deduction on interests apply to holding companies in Portugal, however, the withholding tax is not eliminated, except the cases of outgoing or incoming dividends to the parent company. For a better understanding of the taxation of holding companies in Portugal, please address your inquiries to one of our company formation agents in Portugal.
You can invest in startups, having a holding company in Portugal
Holding companies in Portugal are often used by investors interested in startups in exchange for other types of business structures. The field of robotics, for example, is booming all over the world, including in Portugal, and business ideas in this area are becoming more popular. Moreover, the protection is offered by the holding company, a structure highly appreciated by local and foreign entrepreneurs. If you are still thinking about such an investment, do not hesitate to talk to our local specialists.
Is daily management needed for the holding company?
An important advantage related to the holding company in Portugal is the management of this structure. For example, shareholders do not have to take this into account because each subsidiary is responsible for its management and day-to-day activities. So, if you are also interested in the benefits of a holding company in Portugal, we invite you to get in touch with our local agents and find out all the details. We can handle the formalities so that the shareholders can focus on the future responsibilities in the company.
Compliance costs of holding companies in Portugal
If the holding company in Portugal is the business structure you need, it is recommended to consider the related costs. In addition to the annual reports that you must take into account, there are also set-up costs, which can be detailed when you decide to work with us.
Is the holding company a complex structure?
When you set up holding companies in Portugal with their respective subsidiaries, the whole management process may seem complex at one time, compared to other types of structures.
An example in this sense can be the following: companies publicly traded with a holding structure, can be more difficult to follow, hence the respective complexities. For this reason, it is recommended to implement an operational management system, an essential tool, to be able to keep track of all information in the company, including those related to due dates. Although it may seem like a disadvantage, this aspect can be properly managed with the help of a specialist.
What else should you know about holding in Portugal?
If the above-mentioned benefits do not satisfy the needs of knowledge of the holding company in Portugal, it could arouse your interest the following aspects:
- Continuity of management in the holding company – Every time a parent company buys other subsidiaries, it has the role of maintaining its management. An advantageous aspect comes to the attention of those who decide on holding companies in Portugal, which weighs a lot at the time of acquisition. However, the holding company may not be involved in the activities of those subsidiaries, if this is chosen, unless strategies are implemented to monitor the performance of those subsidiaries. In short details, the managers of the subsidiary company will be able to carry out their usual activities and the roles they have in the company.
- Subsidiaries remain independent entities – If a holding in Portugal exercises control over several companies, these remain independent legal entities. In other words, if one of the subsidiaries is involved in a lawsuit, the applicants are not entitled to claim the assets of the other subsidiaries owned by the holding company in Portugal. It can also be said that the parent company cannot be held liable.
- Greater control for a smaller investment, another benefit – Investments in holding companies are relatively small, which is an important advantage for foreign investors in Portugal. Control of a subsidiary is gained by the parent company if it acquires 51% or more of the subsidiary. Therefore, small investments are on the side of those who buy fewer shares in a company.
What are the benefits of holding companies in Portugal?
Holding companies present a series of advantages which can raise the interest of investors who want control in specific companies in Portugal. Here are a few examples of holding company advantages in Portugal:
- Holding companies are protected by the applicable EU directives.
- The double taxation treaties signed by Portugal with countries worldwide provide a series of tax exemptions for holding companies.
- Centralized corporate control is related to holding companies.
- A holding company provides greater protection against all sorts of risks (operational and financial).
- The protection of assets (equipment, intellectual property, etc.) can be offered by a holding company.
- The amount of taxes can be reduced when owning a holding company in Portugal.
- The management of a holding company in Portugal is controlled by the managers of this company.
- The continuity of the business can be ensured by the directors of a holding company in Portugal.
- Tax minimization methods can be successfully implemented in a holding company.
- Investing in large projects can be made with the help of holding companies in Portugal.
The structure of a holding company in Portugal is not complex, however, for registering such a business in Portugal, it is recommended to solicit the support of our team of company formation specialists in Portugal.
Making investments in Portugal – key factors
Portugal has an excellent geographic location with important business connections worldwide, by air, sea, and land. International investors can enjoy numerous advantages when it comes to owning a business in Portugal. Among these, the mention that entrepreneurs can rely on the brilliant, skilled and multilingual workforce available on the market. Also, having access to complete technology for their companies allows international entrepreneurs to decide quite fast in Portugal for a business point of view. Another great advantage for entrepreneurs from abroad refers to the ease of registering a business in Portugal. There are no complex formalities in this matter, and that because the incorporation process of a company has been extensively simplified, including for holding companies in Portugal. The following facts, data, and numbers ca highlight a few aspects of the business direction and economy in Portugal:
- • the 2020 Doing Business report ranked Portugal 39th out of 190 worldwide economies, in terms of simplified business formalities and more;
- • international investors can obtain Portuguese citizenship if they make investments of at least EUR 250,000 in existing companies in this country;
- • 27% of the total FDI stock for 2018 in Portugal have been directed to the financial services sector;
- • Spain, the UK, Luxembourg, and the Netherlands are the main investors in Portugal;
- • around USD 183 billion was the total FDI stock for Portugal in 2020.
Why should you open a holding company in Portugal?
If you want to manage the stocks in another enterprise as a secondary method of supporting the economic activities, you should register a holding company in Portugal. Under a signed arrangement which runs the terms of compensation, a holding company in Portugal can offer methodological management services to all of its subsidiaries. One should know that a holding company in Portugal can be set up as a private limited company or as a public one, the registration process being 90% about the same with the one for any type of company which is subject to a legal framework.
Choose the services of our specialists in Portugal
The registration of a company in Portugal can be done with the help of our local agents, with experience in this area. Because we want to offer the best strategies and solutions to our clients, we are aware of the changes in the business climate in Portugal, and we rely on the experience already accumulated.
In other words, the formalities related to the registration of a company, the payment of taxes, business licenses, company acquisitions come to the attention of our specialists, so you can easily send us your requests.
Our company formation agents in Portugal can offer complete support and guidance if you want to open a holding company in Portugal, so please do not hesitate to contact our team.