Deciding on a business in Portugal in 2021
as a foreign investor can imply finding a suitable business form and that is the private limited liability company or LDA
as it is known. Most of the activities can be implemented and developed in Portugal
with the help of such a simple business structure that is in the attention of many entrepreneurs looking to generate profits in this part of Europe. Our company incorporation agents in Portugal
are at the disposal of investors who are interested in opening an LDA in Portugal
What is a Portuguese LDA?
A Portuguese LDA comes from a private limited liability company in Portugal, also known as quota or sociedade por quotas de responsabilidade limitada. This is the most common type of business structure in Portugal, especially for small and medium-sized companies.
What is the minimum share capital for an LDA in Portugal?
In order to set up a Portuguese LDA, a minimum share capital of EUR 5,000 is mandatory. This capital is divided into shares and the minimum value for each share is EUR 100. We remind that the capital contributions can be made in cash or in kind. One should know that half of the initial capital in cash has to be paid up prior to incorporation, while the assets must be evaluated by an auditor and then paid in full.
How many shareholders are necessary for an LDA in Portugal?
A Portuguese private limited liability company
can be set up by at least one shareholder, regardless of the nationality or residency. If only one founder decides to set up a company
, the structure is called sociedade unipessoal por quotas or SUQ. It is good to know that the shareholders are only liable to the extent of their contributions to the company.
What is the management structure of an LDA in Portugal?
The Company Law in Portugal
does not mention the obligation to form a board of directors for a Portuguese LDA
. The management role can be performed by a managing director who is appointed by the shareholders. On the other hand, the shareholder can also be the director of the firm who will be in charge of the decisions, operations and business direction of the company. If a director is appointed separately, he/she cannot make all decisions, therefore a general meeting has to be organized from time to time.
Choosing the name for your LDA in Portugal
The name of the private limited liability company is registered with the National Registry of Companies in Portugal. At the time you choose the name of your business, it is recommended to make a name verification in this sense and to propose three names. As a mandatory condition, the chosen and approved name must contain “Sociedad
por Quotas” at the end of it or simply Lda. It is good to know that the authorities accept the name of the business in any language as long as it respects the above-mentioned requirement. One of our specialists can give information about business formalities in Portugal in 2021.
The registered office of your LDA
All LDAs in Portugal
must have a registered office address in order to receive the company’s tax form, bills, and many more. The accounting records of your firm will be kept at the registered and declared business office in Portugal.
How can an LDA be verified in Portugal?
Auditing is not compulsory for a Portuguese LDA. It is, however, recommended to have a supervisory board for the private limited liability company in Portugal if the total balance sheet exceeds EUR 1,5 million in two consecutive years, if the net sales exceed EUR 3 million or if the number of employees is higher than 50.
Are there other requirements for an LDA in Portugal?
The name of a private limited liability company in Portugal
must contain the word limitada or at least the letters LDA. Foreign investors can appoint a legal representative through power of attorney in order to deal with the company registration in Portugal
The benefits of LDAs in Portugal
Private limited liability companies in Portugal
address to both foreign and local entrepreneurs wanting to operate on the market with the help of a simple form of business. The incorporation process of an LDA in Portugal
is less restrictive and has fewer formalities. Moreover, the shares in an LDA
can be 100% owned by a foreigner, meaning that there is no need for a local investor to create the business. It is good to know that there is no need for audits if the company is small or medium. Requiring only one shareholder for creating an LDA in Portugal
is another reason why investors from overseas decide on such a business structure, and more than that, the shareholder can be the director of the firm. Portugal
is among the European countries that offer the possibility of creating a company with low capital, in this case, EUR 5,000 for an LDA.
The double taxation treaties signed by Portugal with countries worldwide protect foreign investors from paying the taxes twice on incomes and offer a series of tax advantages. LDAs are the most popular business structures in Portugal and on top of the list of investors who are interested in complete control in their company, an easy incorporation, an attractive minimum share capital and the option of collaborating in terms of business with companies worldwide in a reliable and easy manner. Understanding better the conditions for opening an LDA in Portugal can help foreigners commence the activities in this country within a few days, therefore, you may address your inquiries to our team of consultants.
Buying a shelf company in Portugal in 2021
The purchase of a shelf company in Portugal
is quite simple and often the choice of local and foreign entrepreneurs interested in starting a business
without having to wait for the entire registration process. Things are quite simple with a vintage company because this is already incorporated in Portugal and kept on a shelf until someone buys it. The purchase of a ready-made company in Portugal can be handled by one of our specialists who will accept the required documents and then continue with the formalities. LDA is the proper structure for shelf companies in Portugal. In matters of advantages, a shelf company
presents complete confidence because it is registered with the Company Registry in Portugal
and has no activities on the market. Yet, if an entrepreneur wants, a company verification can be made, to make sure the shelf company has no liabilities or financial debts left behind. Ready-made companies
can be purchased right away, without for the entrepreneur to travel to Portugal. Plus, the operations can start right away because the shelf company is ready for business. You can discuss with our agents and find out more about LDAs and shelf companies in Portugal
Guide for starting a business in Portugal
As mentioned in this article before, the limited liability company or LDA is the proper business choice of domestic and international entrepreneurs in Portugal. Being a simple business structure, an entrepreneur can start the activities quite fast, as soon as the registration for taxation is made. We present you a short guide to help you understand how you can start a business in Portugal in 2021, without complications and with complete support offered by our specialists in Portugal:
- • The activities of the future firm are usually established from the beginning by the business owners.
- • The minimum share capital of EUR 5,000 needs to be deposited in a Portuguese bank account.
- • Once you selected the name for the business, you must make a reservation with the Portuguese Company Registry.
- • If your activities require a specific business license, you need to make the necessary arrangements. Our agents can help you.
- • The registration for taxes and social contributions can be made with our support.
- • All the documents need to be drafted to the Portuguese Trade Register for approval.
- • Once accepted, you can apply for a company stamp and get ready for business.
The registration formalities for LDA in Portugal have been simplified in recent years, allowing foreigners to enjoy a fast start on the market. There is also the ‘Empresa online” procedure that refers to the incorporation of a company on the internet, under the observation of the National Registry of Companies in Portugal. You can also be guided by one of our specialists in company formation in Portugal if you want to know more about this kind of company formation.
Making investments in Portugal
is open for business and it is home to many international companies with different activities. The LDA is the most suitable business structure for foreigners due to the lack of registration complexities, representing a great business advantage. Besides this important benefit, international entrepreneurs enjoy a proper and appealing business climate, with encouragements in matters of taxation offered by the Portuguese government, relaxed investment legislation, a skilled workforce
, plus a great infrastructure that combines the business worldwide. Startups in Portugal
are quite encouraged in Portugal, particularly in sectors like education, medicine, transportation, tourism, research, and development. The tax regime is appealing to entrepreneurs in Portugal, plus, the profits are protected by a number of double taxation agreements signed with countries worldwide to avoid fiscal evasion and any other financial risk. The following facts and figures highlight a part of the economy and business direction of Portugal at the moment:
- The total FDI stock for Portugal in 2019 was approximately USD 161 billion.
- Making investments of at least EUR 350,000 grants the entrance to the Golden Visa Programme in Portugal.
- 166 was the number of greenfield investments registered in Portugal in 2019, worth around USD 3,4 billion.
- Portugal ranks 39th out of 190 economies in the world, according to the 2020 Doing Business report.
For more details on the characteristics of an LDA
, our Portuguese company formation specialists
remain at your service. Please feel free to contact us
for a personalized consultancy.