Portugal Company Formation & Tax 2026 ✓ Lda, IRC 19%, VAT, IFICI

A company in Portugal in 2026 is usually an Lda (sociedade por quotas), with capital from EUR 1 per member's quota. Corporate income tax (IRC) is 19% in 2026, and small and medium-sized companies pay 15% on the first EUR 50,000 of profit. VAT (IVA) is 23%, 13% and 6%. Dividends paid abroad suffer 25% withholding under domestic law, reduced by tax treaties or exempt for qualifying parent companies.

Working since 2012 · tax review before incorporation · IRC, VAT, dividends and owner-side CFC rules in one team

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Key points

An Lda is formed with capital from EUR 1 per quota, an SA from EUR 50,000. The state fee for Empresa na Hora is EUR 360.
IRC is 19% in 2026; SMEs pay 15% on the first EUR 50,000. On top come the municipal surcharge (derrama municipal) and the state surcharge (derrama estadual) of 3–9% on profit above EUR 1.5 million.
VAT is 23%, 13% and 6% on the mainland, with lower rates in Madeira and the Azores. The small-business exemption (turnover up to EUR 15,000) is limited to businesses established in Portugal or elsewhere in the EU.
A non-resident without a permanent establishment pays 25% on dividends, interest and royalties, cut by treaties; the EU and treaty-partner parent exemption needs a 10% stake held for a year.
The NHR regime is closed to new residents. Its successor, IFICI, taxes qualifying income at 20% for 10 years and covers a narrow list of activities.
Incorporating a company does not grant residence. The golden visa no longer covers real estate (Law 56/2023), and naturalisation now takes 10 years of residence for most nationalities.

Portuguese company taxes in 2026

IRC standard rate

19% for tax periods starting in 2026, 18% in 2027, 17% from 2028 (Law 64/2025, IRC Code art. 87).

SMEs and Small Mid Caps

15% on the first EUR 50,000 of taxable profit, the standard rate above that. The company must carry on a commercial, industrial or agricultural activity as its main business and qualify as an SME or Small Mid Cap. The relief is subject to the EU de minimis aid rules.

State surcharge

An extra 3% on profit between EUR 1.5 million and EUR 7.5 million, 5% between EUR 7.5 million and EUR 35 million, 9% above EUR 35 million (IRC Code art. 87-A).

Municipal surcharge

Set each year by the municipality where the company is registered, so the registered address affects the total burden.

VAT (IVA)

23% standard, 13% and 6% for goods and services listed in the VAT Code (art. 18). Madeira and the Azores apply their own reduced rates.

Non-resident income

25% on income of non-residents without a permanent establishment, 35% for recipients in listed low-tax jurisdictions (IRC Code art. 87). Tax treaties reduce the rate.

Madeira IBC

5% on qualifying international profit until 31 December 2033 for companies licensed by 31 December 2026, subject to job and investment conditions. Details on our Madeira company page.

Worked example for a small company in 2026: with taxable profit of EUR 120,000, IRC is 15% of EUR 50,000 plus 19% of EUR 70,000, that is EUR 7,500 + EUR 13,300 = EUR 20,800 before the municipal surcharge. Profit up to EUR 1.5 million is outside the state surcharge.

VAT: registration, rates and the small-business exemption

A company doing business in Portugal registers for VAT when it files its declaration of commencement of activity. The mainland standard rate is 23%, with reduced rates of 13% and 6%. Madeira and the Azores set their own lower rates by regional law.

Article 53 exemption

Portuguese turnover in the previous year up to EUR 15,000 and no exports. Available to businesses established in Portugal; businesses from other EU states qualify with EU turnover up to EUR 100,000 and notification by their home state.

Non-EU company

A company established outside the EU, with no seat in Portugal, cannot use the article 53 exemption and charges VAT from its first taxable supply.

Tax residence of the company and its owner

A company is resident in Portugal when its registered seat (sede) or place of effective management (direção efetiva) is in Portugal (IRC Code art. 2). A Portuguese Lda pays IRC on worldwide income. The rule cuts both ways: a foreign company actually managed from Portugal can become Portuguese resident.

An individual is resident in Portugal after more than 183 days in any 12-month period starting or ending in the tax year, or when they have a home in Portugal in circumstances suggesting an intention to keep it as their habitual residence (IRS Code art. 16). Any day with an overnight stay in Portugal counts as a day of presence. Residence starts on the first day of presence unless the person was resident in the previous year. Our tax residency guide covers how to change residence and document it.

NHR is closed; IFICI applies

Law 82/2023 removed the non-habitual resident (NHR) provisions from the IRS Code, and the regime takes no new entrants. Since 2024 the replacement is IFICI, the incentive for scientific research and innovation (Tax Benefits Statute art. 58-A), often marketed as "NHR 2.0".

Rate

20% on net category A (employment) and B (business) income from the qualifying activity.

Duration

10 consecutive years from the year of registration as a resident.

Who qualifies

New residents who were not Portuguese tax residents in any of the previous five years and work in higher education and research, R&D, a certified startup, a qualified role in an entity recognised by AICEP or IAPMEI, a highly qualified profession in an exporting company, or another case listed in art. 58-A.

Excluded

Anyone who benefits or has benefited from NHR.

Deadline

Registration by 15 January of the year after the person becomes resident (Portaria 352/2024/1).

A remote worker or freelancer with foreign clients usually falls outside IFICI: the regime needs a specific qualifying activity confirmed by the competent agency. We check whether your situation fits before you move.

Dividends, interest and royalties

Portugal withholds 25% on dividends, interest and royalties paid to non-residents without a permanent establishment, and 35% for recipients in listed low-tax jurisdictions. Treaties reduce these rates. For Ukraine, the convention signed in Lisbon on 9 February 2000 and ratified by Portugal in 2002 applies:

Dividends

10% for a company holding directly at least 25% for an uninterrupted two-year period before payment; 15% in other cases, including individual owners.

Interest

10%.

Royalties

10%.

Dividends to a parent company can be exempt from withholding under IRC Code art. 14: the recipient is resident in the EU, the EEA or a treaty state with exchange of information, is subject to a profit tax at a rate of at least 60% of the IRC rate, has held at least 10% without interruption for the year before payment, and proves this with a certificate from its tax authority before payment. We check the exemption against your actual structure.

Owners resident elsewhere also have home-country obligations, such as controlled foreign company rules, declaring the dividends and claiming credit for Portuguese tax. We model both sides before choosing the structure.

Lda, SA or branch

Lda (sociedade por quotas)

A separate legal entity, possible with a single member (unipessoal). Members set the capital, each quota from EUR 1. Run by a manager (gerente); no board is required.

SA (sociedade anónima)

Minimum capital EUR 50,000, a single shareholder is possible. With capital up to EUR 200,000 one director is enough.

Branch (sucursal)

An extension of the foreign company with no separate legal personality and no minimum capital. Its profit is taxed under IRC as a permanent establishment. Registration is due within two months of the parent's decision, and every representative needs a Portuguese tax number (NIF).

A subsidiary Lda ring-fences the Portuguese business and pays IRC at the rates above; its dividends to the parent are taxed under the treaty or exempt under art. 14. A branch is simpler on the corporate side; its profit is taxed in Portugal and then treated under the parent's home rules and treaty. The choice depends on where the parent is and how you plan to take profit out.

Incorporation: state fees and mandatory steps

Empresa na Hora

IRN state fee EUR 360; EUR 200 when a trade mark in one class is registered together with the company, plus EUR 44 for each further class.

Branch registration

State fee EUR 170 online or EUR 200 in person.

NIF

Every individual member needs a Portuguese tax number.

Capital

Paid into the company account within five working days of registration, or by the end of the first financial year if the members declare so.

Accountant

A certified accountant (contabilista certificado) is mandatory and is named at registration or in the commencement declaration within 15 days.

RCBE

The beneficial ownership declaration is filed within 30 days of registering the company or branch.

Filing and deadlines

IRC return (Modelo 22)

Filed electronically by the last day of May of the following year; for a non-calendar tax period, by the end of the fifth month after it ends (IRC Code art. 120).

Non-resident without a PE

Also files Modelo 22 for Portuguese income where no final withholding tax applied.

VAT

Periodic returns from the start of activity, prepared by the certified accountant.

How we run monthly bookkeeping for foreign-owned companies is described on our international accounting services page.

Company formation and residence in Portugal

Registering an Lda does not, on its own, give anyone the right to live in Portugal. The entrepreneur visa (D2) and the startup visa are separate applications: they require proof of funds and of the intention to invest, and the startup visa also needs an IAPMEI declaration of a contract with a certified incubator. Since Law 56/2023 the residence-by-investment (ARI, "golden visa") programme excludes real estate; the remaining routes are investment funds, research, culture and job creation. From 19 May 2026 naturalisation requires 10 years of legal residence (7 for EU and CPLP nationals); see our note on Portuguese citizenship in 2026. Immigration status is handled separately from tax, and we model the tax side of the move in advance.

How we help

Review the business, the members, where management sits and where the owners are tax resident.
Model taxes in Portugal and at home: IRC, surcharges, dividends or the manager's salary, CFC rules.
Handle VAT: registration, intra-EU supplies, the article 53 exemption where available.
Compare a subsidiary Lda, a branch and a Madeira company for an existing business.
For a move, test tax residence and IFICI eligibility before the visa application.
Set up bookkeeping and filings in Portugal and the owner's reporting at home.

Describe your case in two or three sentences: the owners' country, the activity, expected turnover and how you want to receive profit. We will prepare a tailored proposal with the scope of work.

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Company formation, a registered address and registry changes in Portugal for foreign founders are covered on the INNOVA group page: a company in Portugal for a foreign founder.

Madeira company: IBC regime, 5% tax, licences until 31 December 2026.
Spain corporate tax: SL, IS, VAT, Beckham regime.
Taxes in Poland: sp. z o.o., CIT 19% and 9%.
Registration of companies in Europe: EU countries compared.
Controlled foreign companies: owner-side rules.

Sources: Law 64/2025; IRC Code: art. 87, art. 87-A, art. 2, art. 14, art. 120; VAT Code: art. 18, art. 53; IRS Code art. 16; Tax Benefits Statute art. 58-A (IFICI) and Portaria 352/2024/1; ratification of the Portugal–Ukraine convention (RAR 15/2002); IRN: Empresa na Hora, branch registration, RCBE; SDM: Madeira IBC benefits, company forms; AIMA: ARI; Portuguese Foreign Ministry: visas. Checked on 9 October 2026.