How to Buy a Business in Portugal? What You Need to Know

Portugal has become a hotspot for entrepreneurs and investors seeking new business opportunities. Its strategic location, robust infrastructure, and welcoming approach to foreign investment make it an attractive destination for those looking to buy a business. This article will guide you through the essential aspects of purchasing a business in Portugal, from understanding the market to navigating legal requirements.

1.1 Key Economic Sectors

Portugal boasts a diverse economy, with key sectors driving growth and investment opportunities. The technology and innovation industry has seen a rapid rise in recent years, thanks to government support and an influx of startups. Tourism remains a powerhouse, with millions of visitors flocking to Portugal’s scenic cities and coastal towns. Other important sectors include agriculture, manufacturing (particularly textiles and automotive), renewable energy, and real estate.
Foreign investors can explore businesses in these thriving areas, making Portugal a fertile ground for both small-scale ventures and larger corporate investments.

1.2 Business Culture and Etiquette

Portugal’s business culture is friendly but formal. Personal relationships and trust play a significant role in business dealings, so it’s important to build strong connections with partners and local stakeholders. Face-to-face meetings are highly valued, and punctuality is expected. Portuguese professionals appreciate respect and politeness, and business discussions often start with light, informal conversations before moving to the agenda.
Being culturally aware and patient can help foreign investors smoothly integrate into the local business environment, fostering stronger partnerships and collaborations.

1.3 Legal Framework for Foreign Investors

Portugal is known for its transparent legal system, which is particularly welcoming to foreign investors. Non-EU residents can buy businesses under the same conditions as locals. The country’s legal framework encourages foreign investment through incentives like tax breaks and residency programs, such as the Golden Visa. This program allows non-EU citizens to invest in Portuguese businesses or real estate and receive residency in return.
Additionally, Portugal’s legal system provides protections for foreign investments, ensuring a fair and reliable business environment.

2. Types of Businesses Available for Purchase

2.1 Small-Scale Enterprises

Small businesses, such as local restaurants, retail shops, and boutique hotels, are popular choices for foreign investors, especially in high-tourism areas like Lisbon, Porto, and the Algarve. These ventures often come with established client bases and strong community ties, making them an easier entry point into the Portuguese market.
Small-scale enterprises also require lower initial investments compared to larger corporations, making them more accessible for entrepreneurs who want to test the waters before committing to larger projects.

2.2 Established Corporations

For those seeking more significant investment opportunities, acquiring established corporations in industries such as manufacturing, renewable energy, or logistics can offer greater potential returns. These businesses typically come with established operational structures, strong market presence, and a solid revenue stream. However, purchasing larger companies involves more complex due diligence and requires a thorough understanding of the market.
Acquiring an established corporation in Portugal can open doors to the European market, giving you access to customers and suppliers throughout the EU.

2.3 Franchise Opportunities

Franchise businesses are another excellent option for foreign investors. Portugal is home to numerous international franchises in sectors like retail, hospitality, and fast food. Purchasing a franchise provides a ready-made business model, brand recognition, and operational support, minimizing the risks associated with starting a new business from scratch.
The franchising model is particularly attractive to investors looking for stability and lower risk, as these businesses often have a proven track record and established customer loyalty.

3. Legal Requirements and Procedures

3.1 Business Registration Process

Once you’ve decided on the type of business you wish to purchase, the first legal step is to register your company with the Portuguese authorities. The process is relatively straightforward and can often be completed in a single day via the “Empresa na Hora” (Company in an Hour) initiative, only need to know Portuguese and have at least one representative officially located in Portuguese territory. This government program allows you to register a business quickly and efficiently, reducing the red tape that can sometimes slow down the process in other countries.
You’ll need to choose a business name and submit the necessary documentation. Once approved, your business will be assigned a unique identification number (NIF) and will be officially recognized by the government. If you are not ready to deal with all the bureaucratic procedures and waste your time, contact the professionals from Relyon Relocation.

3.2 Necessary Permits and Licenses

Depending on the type of business you’re purchasing, specific permits and licenses may be required to operate legally in Portugal. For example, businesses in sectors like food and beverage, hospitality, or transportation may need health and safety certifications, environmental permits, or tourism licenses.
It’s essential to research the specific requirements for your business type and ensure you obtain all necessary authorizations before beginning operations. Working with a local lawyer or Relocation company can help you navigate these requirements and avoid costly mistakes.

3.3 Tax Obligations for Foreign Owners

As a business owner in Portugal, you’ll be subject to the country’s tax regulations. Corporate income tax (IRC) is currently set at a rate of 21%, though smaller businesses with revenues under €50,000 may qualify for reduced rates. Additionally, Portugal offers several tax incentives to foreign investors, particularly those who choose to establish businesses in less economically developed regions of the country.
For non-EU investors, the Golden Visa program offers tax benefits, and Portugal has a network of double taxation treaties with countries like the U.S., which can help you avoid paying taxes on the same income in both countries.
VAT (value-added tax) is another obligation, with standard rates of 23%, though reduced rates apply to certain goods and services, such as food, healthcare, and education. It’s crucial to stay compliant with Portuguese tax law to ensure the smooth operation of your business and avoid penalties.

Can You Buy a Business in Portugal? Absolutely!

Buying a business in Portugal is not only possible but also highly advantageous for foreign investors. The country’s robust economy, supportive legal framework, and welcoming approach to foreign ownership create an ideal environment for business investment. Whether you’re looking to purchase a small café in a tourist hotspot, acquire a manufacturing corporation, or invest in a franchise, Portugal offers diverse opportunities across multiple sectors.

With Relyon Relocation by your side, this process becomes even smoother and stress-free. Our team will present you with tailored business options ready for purchase, prepare all the necessary documentation, and handle the entire relocation of your family to Portugal. We offer a comprehensive all-in-one service solution that includes securing Portuguese residency and citizenship for all family members. With our expert guidance, you’ll enjoy not only a successful business investment but also a seamless transition to your new life in Portugal!