Establish a Sole Trader in Portugal
A small business in Portugal may commence under the rules of a sole proprietorship, the easiest business structure available. This a preferred business for many reasons, among which small taxes, complete liability for the owner and simple accounting requirements. Our company formation specialists in Portugal are here to provide complete support for entrepreneurs interested in setting up a sole trader in Portugal.
How do I become self-employed in Portugal?
The Portuguese Trade Register is the institution in charge of company incorporation in this country, including sole proprietorships. Just like in the case of any kind of company, the first thing to do is to verify and reserve the business name before preparing the company’s documents. Here are the main steps for setting up a sole proprietorship:
- The registration for tax purposes, such as VAT and social security.
- Professional certifications and qualifications recognized in Portugal are needed.
- Portuguese qualifications are necessary for accountants, lawyers, etc.
- The authorities will request copies of the personal identification documents.
What are the taxes for sole traders in Portugal?
The tax regime is quite appealing for foreign traders in Portugal, and this means that there is no corporate income tax involved. The sole proprietorship enters the Simplified Category B Regime, meaning that taxes are applied for EUR 200,000 annual turnover. It is good to know that sole traders in Portugal are subject to social contributions and must pay a 29.6% rate if the profits exceed EUR 2,573/year. We mention that sole proprietorships are considered single entities and therefore, the taxation is made through the personal tax regime established for individuals in Portugal. All the aspects and steps involved in the registration of a sole proprietorship in Portugal can be explained by our company incorporation agents in Portugal. Our team of advisors can help foreign entrepreneurs register a company in Portugal at any time, regardless of the selected business structure.
Who can work as a sole trader in Portugal?
Brokers, accountants, temporary workers, real estate agents, lawyers, alternative medicine practitioners or farmers can be self-employed in Portugal and register their activities as sole traders. Such activities are based on specific rules, and self-employed persons will have to comply with the tax payment regulations and report the profits for the previous business year.
A correct and realistic business plan, a logo, a name, a long-term strategy and details about the business start-up costs should be the first steps in opening a sole proprietorship in Portugal, whether as a national or as a foreign entrepreneur. Even if the registration procedure is simple, it is best to talk to our company formation representatives in Portugal and solicit assistance and complete guidance.
Reasons to be self-employed in Portugal
The business opportunities in Portugal are huge and let foreign investors choose what they want in terms of business forms, suitable for their needs. A sole proprietorship is the ideal choice for the type of entrepreneurs wanting to start a business with a fixed budget. This means that they can easily develop without having to pay attention to taxes to pay if the annual turnover is not exceeded. The tax regime is advantageous for sole traders in Portugal, and it is among the reasons why such business form is recommended and chosen. Likewise, being self-employed in Portugal means having fewer worries from a business point of view, especially for attorneys, accountants, real estate agents, translators, web developers, graphic designers who want to activate in this fields. A successful self-employed contractor will have to be aware of the business responsibilities, make a concrete plan, understand the direction of business, including on the internet, and have everything necessary for offering complete services.
A sole proprietorship in Portugal is the proper structure for the type of entrepreneurs who would rather work for themselves, pay fewer taxes and generate profits for their own good. It is though recommended to change the business structure if the sole proprietorship no longer addresses to your needs, and in this case, an LDA represents the next business step in Portugal. Here are some facts about business in Portugal:
- • approximately USD340 billion is the estimated GDP for 2019;
- • EUR 910 is the average salary for employees in Portugal;
- • the economy is sustained by the tourism sector that registers around 20 million visitors each year;
- • USD 62.22 billion represents the export profits for Portugal in 2018.
We kindly invite you to contact our company formation specialists in Portugal and find out complete information about how you can open a sole proprietorship in Portugal, and about the taxation for such structures. If you want to open a company in Portugal, feel free to address to our team.
