How to establish a Czech company or branch in Portugal: Legal minimum and practical tips

Entering the Portuguese market gives Czech entrepreneurs access to a dynamic southern European economy, a stable legal environment, and favorable tax regimes. Establishing a company or branch in Portugal brings a number of strategic opportunities, but also requires careful preparation and knowledge of local legislation.

Need advice on this topic? Contact the ARROWS law firm by email office@arws.cz or phone +420 245 007 740. Your question will be answered by "Mgr. Vojtěch Sucharda", an expert on the subject.

Basic decision: Establish a new company or register a branch?

Before starting any process, you must answer a fundamental question: do you want to establish a separate company in Portugal or simply register a branch (subsidiary) of your Czech company?

A Portuguese company (Sociedade por Quotas – Lda.) is the most common choice for small and medium-sized enterprises. It is a separate legal entity with its own legal personality, which is a tax resident of Portugal and subject to local corporate income tax.

The main advantage is the separation of liability – the company is liable only with its own assets, while your Czech parent company remains protected. A branch office, on the other hand, is not an independent entity, but an extension of the Czech company on Portuguese territory.

The Czech parent company is fully liable for all obligations and receivables of the branch office with all its assets. A branch must be registered with the Portuguese Commercial Register and obtain a tax identification number, but it cannot act on its own behalf without the involvement of the parent company.

FAQ – Legal tips for choosing a business form

1. When is it more advantageous to choose a separate company instead of a branch?

If you are planning a long-term presence on the Portuguese market, higher turnover, or potentially riskier business activities, establishing a company is a safer option. It protects the assets of your Czech company from any liabilities arising in Portugal. Do you need help choosing the optimal structure? Write to office@arws.cz​.

2. Is a branch cheaper and faster to set up?

Yes, registering a branch is usually administratively simpler and cheaper than setting up a full-fledged company. However, the long-term tax and liability implications can be significantly more disadvantageous. For a detailed legal analysis of your case, contact the ARROWS law firm at office@arws.cz.

3. Can a branch be converted into an independent company at a later date?

Yes, this is possible, but it requires extensive legal steps, including the transformation of the legal structure, the transfer of assets, and a new entry in the register. ARROWS will help you with the entire process – write to office@arws.cz.

Risks and Penalties	How ARROWS Helps (office@arws.cz)
An incorrectly completed NIF application will result in rejection and delays.	Legal analysis and advice on choosing the optimal structure with regard to your business objectives.
It will be impossible to open a bank account or register a company without a NIF.	Preparation of recommendations and contractual documentation for the protection of the parent company
Lack of knowledge about tax representation requirements for non-EU citizens.	Expert legal opinions on the application of the double taxation agreement between the Czech Republic and Portugal

How to choose the right legal form for a company in Portugal?

If you have decided to establish an independent company, the next important step is to choose a specific legal form.

Sociedade por Quotas (Lda.) is the Portuguese equivalent of a Czech s.r.o. and the most popular form for foreign investors. It requires at least two partners (or one in the case of Sociedade Unipessoal por Quotas), with each partner's liability limited to the amount of their contribution.

The minimum share capital is only €1 per partner, which makes this form very affordable.

Sociedade Anónima (SA) is a joint-stock company suitable for larger businesses. It requires a minimum of five shareholders and a share capital of €50,000, of which 30% must be paid up at the time of incorporation.

This form is particularly suitable for companies planning to raise external investment or enter the capital markets.

For specific projects, a holding company (SGPS) may also be advantageous, as it enjoys special tax benefits in Portugal.

The ARROWS law firm has more than 150 joint-stock companies and 250 limited liability companies in its portfolio and regularly provides legal advice on setting up companies abroad through the ARROWS International network.

Thanks to our many years of experience, we can quickly assess which legal form best suits your needs and prepare all documentation with minimal risk. For an immediate solution to your situation, write to us at office@arws.cz.

What documents and supporting materials will you need?

Establishing a company in Portugal requires a number of formal documents that must be properly prepared, translated, and certified.

The basic documents include:

• Valid passports of all founders and executives.
• Portuguese tax identification number (NIF) for all founders and executives – this number must be obtained before the company is registered.
• Certificate of approval of the business name (Certificado de Admissibilidade) from the National Register of Legal Entities (RNPC).
• Founding documents, including the company's articles of association.
• Declaration of beneficial ownership for anti-money laundering (AML) compliance purposes.
• Proof of the company's registered office address in Portugal.
• Declaration of acceptance of office from the executives.

The following are also required for a branch of a Czech company:

• Certificate of Good Standing from the parent company.
• Certificate of registration of the parent company in the commercial register.
• Articles of association of the parent company.
• Minutes of the general meeting with the decision to establish a branch in Portugal.
• Power of attorney for the branch representative.

All documents must be officially certified and translated into Portuguese by a certified translator.

Preparing this documentation can take weeks, especially if it involves requesting official documents from Czech authorities, certification, and translations. Any error or incompleteness can lead to the application being rejected and the entire process being prolonged.

ARROWS ensures the preparation and review of all documents, communication with Portuguese notaries and authorities, and thanks to the ARROWS International network, we can also provide comprehensive legal representation directly in Portugal. Contact us at office@arws.cz for a tailor-made legal solution.

What is a NIF and how do I obtain one?

The Portuguese tax identification number (NIF, Número de Identificação Fiscal) is absolutely essential for any business activity in the country. Without a NIF, you cannot open a bank account, conclude contracts, rent property, or register a company.

EU citizens can apply for a NIF directly at the Portuguese tax office, while non-EU citizens must appoint a tax representative in Portugal. The process involves submitting a passport, proof of address, and, if applicable, a power of attorney for the representative.

For companies, the process is more complex. It requires a company registration form, founding documents, information about the directors and beneficial owners, and a registered office address in Portugal.

The NIF for a company is issued automatically upon registration in the commercial register and also serves as the NIPC (legal entity tax identification number).

NIF fees vary depending on the situation—registration is usually free for individuals, but costs may increase for companies with multiple beneficial owners or when a power of attorney is required.

A common mistake is filling in the information incorrectly or not following the correct procedures, which can lead to the application being rejected or being placed on the tax authorities' watch lists.

ARROWS will ensure that your founders and company obtain their NIF without any problems, including appointing a trusted tax representative if necessary. Do you need legal assistance? Contact us at office@arws.cz.

Risks and Penalties	How ARROWS Helps (office@arws.cz)
An incorrectly completed NIF application will result in rejection and delays	Preparation and submission of NIF applications, securing a tax representative.
Inability to open a bank account or register a company without a NIF	Comprehensive NIF provision for all founders and executives prior to company registration
Lack of knowledge about tax representation requirements for non-EU citizens	Legal advice and provision of a certified tax representative in Portugal through ARROWS International

How does the company registration process work?

Company registration in Portugal involves several consecutive steps that must be carried out in a specific order and in accordance with Portuguese law.

Step 1: Approval of the business name

First, you must obtain a certificate of name admissibility (Certificado de Admissibilidade) from the National Register of Legal Persons (RNPC). You can propose three name options, and the application must also include the detailed purpose of the company and the municipality where it will be based. Approval takes approximately 15 days, and the certificate is valid for three months.

Step 2: Drafting the articles of association and bylaws

Once the name has been approved, the partners or their representatives must prepare the articles of association and bylaws of the company, which include the full identification of the executives, commitments to the share capital, provisions on the remuneration of executives, and clauses on the management and representation of the company. These documents must be signed and certified by a notary. Foreign investors may use a power of attorney.

Step 3: Registration in the commercial register

The company must then be registered in the Portuguese commercial register (Conservatória do Registo Comercial). The required documentation includes a certificate of name approval, the memorandum of association and articles of association, a declaration of acceptance of office from the managing directors, a declaration of beneficial ownership, and tax identification numbers for all parties involved. Upon successful registration, the company is assigned a Portuguese tax identification number (NIPC).

Step 4: Tax registration

After registering with the Commercial Registry, you must register the company with the Portuguese Tax Authority (Autoridade Tributária e Aduaneira) for corporate income tax, VAT, and other taxes. This step is necessary to start invoicing and access the VAT system.

Step 5: Social security registration

The company must also be registered with the Portuguese social security system (Segurança Social), which happens automatically when registering with the commercial registry. Employers must register their employees within 2 days of starting work.

Step 6: Open a corporate bank account

Once the company has been established, you can open a corporate bank account with a Portuguese bank or a financial institution based in the EU. Banks usually require a certificate of company registration, articles of association, identification of directors and shareholders, and proof of the company's address.

The entire process typically takes 5 to 23 business days, depending on the method chosen and the completeness of the documentation. Online registration using the "Empresa Online" service can be completed in 1-2 days, while the traditional process takes longer.

Contact our experts:

FAQ – Legal tips for registering a company

1. Do I have to be present in person when registering a company?

No, registration can be done by power of attorney. This greatly simplifies the process for Czech entrepreneurs, who do not have to travel to Portugal. ARROWS will take care of the entire process, including representation – contact us at office@arws.cz.

2. How much does it cost to register a company?

The costs vary depending on the registration method. Online registration costs approximately €180–380, while in-person registration can cost €360–435. In addition, there are costs for notary certification, translations, legal services, and initial capital. For a comprehensive price quote for our services, please write to us at office@arws.cz.

3. Is it necessary to deposit the initial capital before registration?

For Lda. companies, the minimum capital is only €1 per shareholder, which can be deposited during the first fiscal year. For SAs, €50,000 is required, with 30% to be paid up at incorporation. Do you have questions about capital requirements? Contact ARROWS at office@arws.cz.

Although the above steps may seem straightforward at first glance, in practice there are many procedural details, exceptions, and links to other regulations. An incorrectly completed form, a missing document, or failure to meet a deadline can lead to rejection of the application, fines, or even the inability to start a business.

ARROWS deals with setting up companies abroad on a daily basis and can significantly reduce the time and minimize the risk of errors. We are insured for damages up to CZK 500,000,000, so it is safer for you to have the matter professionally handled. Write to office@arws.cz.

What are the tax obligations of a company in Portugal?

Understanding the tax system is key to successful business in Portugal.

Corporate income tax (IRC) was reduced from 21% to 20% as of January 1, 2025. Small and medium-sized enterprises (SMEs) and so-called Small Mid-Cap companies are eligible for a reduced rate of 16% on the first €50,000 of taxable income. Income exceeding this amount is taxed at the standard rate of 20%.mcs+3​

The state surcharge (derrama estadual) is applied progressively: 3% on taxable profits exceeding €1.5 million up to €7.5 million, 5% on profits between €7.5 million and €35 million, and 9% on profits exceeding €35 million.

VAT (IVA) is applied at three rates in Portugal: standard 23%, reduced 13% and 6%, plus a zero rate for intra-EU and international transactions. The threshold for VAT registration for resident companies is set at €15,000 per year from 2025. There is no threshold for foreign companies without a registered office in Portugal – they must register immediately.

VAT returns are filed monthly (for companies with a turnover of more than €650,000) or quarterly (for companies with a lower turnover). The deadline for filing is the 10th day of the month following the end of the tax period (for monthly filings) or the 15th day (for quarterly filings).

In addition, companies must file an annual tax return within five months of the end of the tax period. Annual financial statements must be filed by July 15 of the following year using the IES (Simplified Business Information) form.

Social security: Employers are required to pay 23.75% of their employees' salaries into the social security system, with employees paying an additional 11%. Payments must be made by the 20th day of the following month.

ARROWS Law Firm provides comprehensive legal advice on tax obligations, including tax structure optimization, preparation of documentation for tax authorities, and representation during audits.

Thanks to our knowledge of the double taxation agreement between the Czech Republic and Portugal, we can minimize your overall tax burden. For legal consultation, please write to us at office@arws.cz.

What are the accounting and reporting obligations?

Portuguese companies are subject to strict accounting and reporting obligations that require regular preparation and submission of financial statements.

The financial statements must include:

• Balance sheet.
• Income statement.
• Cash flow statement (depending on the size of the company).
• Notes to the financial statements.
• Management report.

Managing directors are required to prepare the financial statements within three months after the end of the fiscal year and submit them to the shareholders, who have another three months to approve them.

Once approved, the financial statements must be filed with the commercial register within 15 days. If the fiscal year corresponds to the calendar year, the deadline for filing is June 30.

SAF-T (Standard Audit File for Tax) is an electronic reporting format that standardizes the exchange of accounting and tax data between businesses and tax authorities. Businesses in Portugal must file SAF-T files for invoicing data on a monthly basis by the 5th day of the following month.

The annual SAF-T for accounting records must be submitted before the deadline for filing tax returns.

All companies must use certified invoicing software if their annual turnover exceeds €50,000, they have more than one employee, or they use software to issue invoices.

Penalties for non-compliance range from €200 to €3,750, or from €3,000 to €18,750 for using non-certified software.

An audit is mandatory for all public limited companies (SA) and limited liability companies (Lda.) that exceed two of the following three thresholds in two consecutive years:

• Total assets: €1,500,000
• Net turnover: €3,000,000
• Average number of employees: 50

Failure to comply with these obligations may result in fines, administrative measures, compulsory liquidation of the company, and personal liability of the directors.

ARROWS will ensure the complete preparation of accounting documentation, selection and cooperation with certified accountants, preparation of audited statements, and submission of all required reports in a timely manner and in accordance with legal regulations. Contact us at office@arws.cz for a tailor-made legal solution.

What do you need to comply with when hiring employees?

If you plan to hire employees in Portugal, there are a number of legal obligations that you must comply with from day one.

Employment contracts in Portugal must be concluded for an indefinite period, unless the law expressly allows fixed-term contracts. Fixed-term contracts are limited to the temporary needs of the employer and their duration is limited to a maximum of 2 years.

The written form is mandatory for:

• Fixed-term contracts.
• Contracts with foreign employees.
• Contracts with multiple employers.
• Part-time jobs.
• Management contracts.

Within 60 days of starting employment, the employer must provide the employee with written information about the working conditions, including the identity of the employer, the workplace, the job position, working hours, and the basic salary.

Before starting work, the employer must register the employee with the Portuguese social security system. Failure to register employees or irregular payments may result in fines, interest, and audits.

Compulsory insurance against accidents at work must be provided from the first day of work. Employers who fail to provide this coverage assume all risks and costs associated with any accidents or occupational diseases, with possible civil and criminal consequences.

Incorrect classification of workers as independent contractors is one of the most common mistakes and can lead to significant fines, back taxes, and legal disputes.

If the employment relationship shows signs of subordination (work under the direction and supervision of the employer for remuneration), a court or labor authority may reclassify the relationship as an employment contract with retroactive effect.

The minimum wage in Portugal for 2025 is approximately €820 per month (in 2023 it was €705). Employees are entitled to a minimum of 22 days of paid vacation per year and a number of other statutory benefits.

ARROWS Law Firm regularly provides advice on labor law, including the preparation of employment contracts, internal regulations, training in labor law issues, and representation in labor disputes.

Our lawyers will ensure that your employment in Portugal is fully compliant with local regulations, minimizing the risk of disputes and fines. For immediate assistance, please contact us at office@arws.cz.

What licenses and permits may you need?

Depending on the type of business, companies in Portugal may need specific permits and licenses to start and operate.

Business licenses are required in a number of areas, including:

• Retail and wholesale.
• Construction and real estate.
• Leisure services (travel agencies, car rentals).
• Financial services (auditors).
• Hospitality (restaurants, hotels) – require both building permits and permits to meet health and safety standards.

Import and export licenses are required for companies engaged in trade, with some goods subject to restrictions. Environmental permits are required for activities with an environmental impact and are issued by the Environmental Agency.

Building permits are issued by the local municipality and are required for construction and renovation. Licenses in the field of tourism (hotels, resorts, campsites, travel agencies) are issued either by local councils or by Turismo de Portugal.

Travel agencies can only be operated by companies and must have a minimum share capital of €100,000. License applications are submitted through the Directorate-General for Economic Activities (DGAE) via the Balcão do Empreendedor (BDE) portal.

Each economic sector has specific licensing requirements, so it is important to consult the list of licenses provided by the Portuguese government. Incorrect or missing licenses can result in fines, suspension of activities, and criminal penalties.

ARROWS provides comprehensive legal advice on obtaining all necessary permits and licenses, communicating with regulators and supervisory authorities, and fulfilling related obligations. Need legal assistance? Contact us at office@arws.cz.

Visa requirements and residence permits

If you plan to actively manage a company or provide services in Portugal, you may need a visa or residence permit.

EU citizens do not need any special permits to perform the function of a managing director or to reside in Portugal. They only need to register at the nearest town hall within 30 days after the first three months of residence.

Non-EU citizens who plan to live and do business in Portugal must apply for a visa, such as a D2 visa for entrepreneurs.

Requirements for a D2 visa include

• Being of legal age (18 years old).
• A clean criminal record.
• A Portuguese tax identification number (NIF).
• A Portuguese bank account.
• Registration of a Portuguese company (Lda.) or proof of intent to register a company.
• A detailed business plan demonstrating economic benefits for Portugal.
• Sufficient funds to start and run the business, including the ability to pay annual corporate income tax and social security contributions.
• Proof of accommodation in Portugal (rental agreement or proof of ownership).
• Travel health insurance covering at least €30,000.

The minimum initial investment (share capital) for small businesses in Portugal is usually recommended to be around €5,000.

After obtaining a D2 visa and residence permit, you can apply for permanent residence after five years of continuous residence and for Portuguese citizenship after six years.

ARROWS can provide legal advice through the ARROWS International network on preparing your D2 visa application, including preparing a business plan, obtaining all necessary documents, and communicating with Portuguese consulates. Write to office@arws.cz.

How to take advantage of the double taxation agreement?

The Czech Republic and Portugal have signed a double taxation agreement that protects Czech companies and entrepreneurs from being taxed twice on the same income.

The treaty divides taxation rights according to the type of income:

• Income from employment and self-employment is usually taxed in the country where the work is performed.
• Business profits are taxed in one country if the business does not have a permanent establishment (office or branch) in the other country.
• Dividends, interest, and royalties are subject to reduced withholding tax rates under the treaty, often between 5% and 15%, depending on the circumstances.
• Pensions and social security are generally taxed only in the country of residence.

Methods of preventing double taxation include tax exemptions or tax credits. Czech legislation generally applies the ordinary tax credit method, which means that if the tax in Portugal is lower than in the Czech Republic, the Czech company must pay the difference. If the tax in Portugal is higher, no additional tax is payable in the Czech Republic.

Proper application of the treaty requires thorough knowledge of both tax systems, identification of permanent establishments, and correct classification of income.

ARROWS provides expert legal opinions and advice on the application of double taxation treaties, communication with tax authorities in both countries, and tax structure optimization. For legal consultation, please contact us at office@arws.cz.

When and how to terminate a company or branch?

If you decide to terminate your activities in Portugal, you must follow specific legal procedures for the dissolution and liquidation of the company.

The dissolution process begins with a resolution of the general meeting, which must be approved by a qualified majority of three-quarters of the share capital. If the company owns real estate, a notarial deed must be drawn up by a notary. In other cases, a record of the general meeting with the decision to dissolve the company is sufficient.

After dissolution, the company enters into liquidation. The partners appoint one or more liquidators to manage the assets, pay the debts, and distribute the remaining funds. The liquidation must be completed within two years, with the possibility of an extension for another year based on the decision of the partners.

Obligations during liquidation include:

• Within 15 days, the tax authority (Autoridade Tributária) must be informed of the dissolution and appointment of a liquidator.
• Within 10 days thereafter, the same notification must be submitted to social security.
• Within 2 months, the dissolution must be registered with the commercial register.

Once the liquidation is complete, a final meeting must be convened to approve the accounts and close the company.

The formal act of closure must be registered with the commercial register. Only then is the company considered legally dissolved. The termination of activities must be reported to the tax authority within 15 days and to social security by the 10th day of the following month.

If these formalities are not completed, the company may continue to be considered active for tax and social security purposes, which may result in penalties.

ARROWS will take care of the entire process of dissolving and liquidating a company in Portugal, including preparing the general meeting resolution, communicating with notaries, tax authorities, and the commercial register, and ensuring that all liabilities are properly settled. Write to office@arws.cz.

FAQ – Frequently asked legal questions about setting up a company in Portugal

1. How long does the entire process of setting up a company in Portugal take?

When using the online service "Empresa Online," registration can be completed in 1-2 days. The traditional process takes 5 to 23 business days. However, the total time depends on the preparation of documentation, obtaining a NIF, translations, and other formalities, which can extend the process to several weeks. Thanks to its experience and the ARROWS International network, ARROWS can significantly speed up the entire process. Contact us at office@arws.cz for a tailor-made legal solution.

2. Do I need to have a local managing director or representative in Portugal?

No, a local managing director is not required for ordinary companies (Lda., SA). You can appoint a foreign managing director. However, for branches, it is necessary to appoint a legal representative residing in Portugal. Nevertheless, a local contact greatly facilitates dealings with banks, tax authorities, and regulators, especially if you do not speak Portuguese. ARROWS can provide reliable legal representation directly in Portugal through ARROWS International. Write to office@arws.cz.

3. What are the total costs of setting up and operating a company in the first year?

The total costs range from approximately €6,000 to €8,000 in the first year, including all government fees, opening a bank account, legal registration, accounting services, and share capital. The annual costs of maintaining the company after the first year decrease to approximately €600-2,400 per year (depending on the number of transactions). For a detailed price quote for our services, please write to us at office@arws.cz

4. Can I do my accounting from abroad, or do I have to hire a local accountant?

All companies in Portugal must appoint a certified accountant who is registered with the Portuguese authorities. The accountant must be knowledgeable about the Portuguese tax system and accounting standards (SNC). Accounting costs start at €150-180 per month plus VAT. ARROWS can recommend verified and experienced accounting partners in Portugal. Contact us at office@arws.cz.

5. Am I required to file tax returns even if the company is not active?

Yes, even inactive companies must file tax returns and annual financial statements. Failure to file these documents may result in fines and, in serious cases, administrative liquidation of the company. If you are facing a similar problem, contact us at office@arws.cz.

6. Do I need a work permit or visa to act as a managing director?

EU citizens do not need a work permit or visa to act as a director in a Portuguese company. Non-EU citizens need a D2 business visa and subsequently a residence permit. If you are dealing with visa issues, contact ARROWS at office@arws.cz – through ARROWS International, we will help you with the entire process.

Why entrust the establishment of a company to the ARROWS law firm?

Establishing a company or branch in Portugal is not just an administrative matter. It is a complex legal process full of procedural details, exceptions, links to other regulations, and hidden risks that a layman often does not see.

Individual steps that seem simple at first glance have complicated procedural details in the real world – from the correct classification of income for tax purposes, through the selection of the optimal legal form with regard to liability and tax risks, to ensuring compliance with Portuguese labor regulations.

Thanks to our ARROWS International network, we handle cases with an international element on a daily basis and have more than a decade of experience in providing services to clients around the world.

Our portfolio includes more than 150 joint-stock companies, 250 limited liability companies, and 50 municipalities and regions – we pride ourselves on speed and high quality. ARROWS is insured for damages up to CZK 500,000,000, so it is safer for you to have the matter professionally secured. We are also regular partners of corporate lawyers for resolving special matters.

Our services include:

• Legal analysis and advice on choosing the optimal legal form.
• Preparation of all founding documents, contracts, and statutes.
• Obtaining NIFs for founders, executives, and the company.
• Communication with Portuguese authorities, notaries, and the commercial register through ARROWS International.
• Tax registration and tax structure optimization using double taxation agreements.
• Legal advice on hiring employees and preparing employment contracts.
• Representation before registries, regulators, and supervisory authorities, including the fulfillment of obligations.
• Obtaining the necessary licenses and permits.
• Professional training in the field, including certification.
• Legal support in obtaining a D2 visa.

We can connect clients with each other if they have interesting investment or business opportunities. We are also happy to hear interesting entrepreneurial or business ideas.

If you don't want to risk mistakes, damages, or fines, you can safely leave the whole thing to ARROWS. Just contact the office at office@arws.cz and get a legal solution tailored to your needs.

Don't want to deal with this problem yourself? More than 2,000 clients trust us, and we have been named Law Firm of the Year 2024. Take a look HERE at our references.