There are no legal restrictions in Portugal on foreign investment. To establish a new business, foreign investors must follow the same rules as domestic investors, including mandatory registration and compliance with regulatory obligations for specific activities. There are no nationality requirements and no limitations on the repatriation of profits or dividends. The most used business entities in Portugal are the Sociedade por Quotas (LDA), a private limited liability company, and the Sociedade Anónima (SA), a public limited company.
Sovereign’s office in Lagoa in the Algarve was established in 1999 specifically to meet the growing demand for fiscal assistance from foreign investors, residents and retirees. As well as assisting and guiding clients through the complex application processes for Portugal’s Golden and D7 Visa schemes and the NHR tax regime, Sovereign provides continued support to corporate and individual clients that require ongoing Fiscal Representation and accounting services for the letting of their Portuguese properties and submission of income tax returns.
Why Choose Portugal?
A relatively small country of around 10 million people on the western coast of the Iberian Peninsula, Portugal has become the leading location for high-net-worth individuals seeking ‘residency by investment’ in the European Union. Citizens of other EU/EEA member states have the right to move to move to Portugal through the ‘freedom of movement’ principle.
Portugal became a full EU member state in 1986 and has been a member of the Schengen visa-free area, which now extends to 22 EU countries and four non-EU countries, since 1995. Portugal adopted the euro as its currency in 1999.
Portugal offers a stable political and social environment, clear and transparent tax rules, good infrastructure, a favourable investment climate, a skilled labour force and relatively low operating costs – with labour at 50% of the EU average cost.
Given its high quality of life and low cost of living, an attractive climate and beautiful coast, it is not surprising that Portugal is a top destination for expats looking to relocate, either for work or retirement. The government of Portugal recognises the importance of foreign investment and sees it as a driver of economic growth, with an overall positive attitude towards foreign direct investment (FDI).
The Portuguese Golden Visa Residence Permit (GVRP) and Passive Income (D7) Visa provide qualifying non-EU nationals with full rights to live, work and study in Portugal. They also offer visa-free access throughout the Schengen zone and, after five years, holders have the right to apply for permanent residency or citizenship in Portugal.
Visa holders that become tax resident in Portugal may also be eligible for Portugal’s beneficial Non-Habitual Residency (NHR) tax programme.
Many foreigners have settled or invested in a second home in Portugal. There are no restrictions to buying a home in Portugal as a foreigner, and the real estate sector is well developed. The government of Portugal recognises the importance of foreign investment and sees it as a driver of economic growth.
For setting up a business in Portugal, the legal, regulatory and accounting systems are consistent with international norms, and the legal system welcomes foreign direct investment (FDI) on a non-discriminatory basis, establishing clear rules of the game. Foreign investment is not subject to any special registration or notification to any authority, with exceptions for a few specific activities. Portugal has more than 80 double tax agreements and more than 50 bilateral investment treaties in place worldwide.
Beyond Europe, Portugal maintains significant links with former colonies where Portuguese is spoken including Brazil, Angola, Cabo Verde, Guinea-Bissau, Equatorial Guinea, Mozambique, Sao Tome and Principe and Timor-Leste. This offers potential access to a market of about 250 million people, in addition to the 446 million population of the EU.