Portugal is one of the most attractive destinations for setting up startups in Europe. Thanks to its strategic location, direct access to the European Union market, a competitive business environment and a strong commitment to innovation, the country offers particularly favourable conditions for founders, investors and international technology companies.
Portugal stands out for its tax benefits for innovative companies, the availability of highly qualified talent and more competitive operating costs compared to other European hubs.
There are public programmes to support entrepreneurship, incubators, accelerators and specific mechanisms to attract foreign investment and international talent, notably the Startup Visa.
Portugal also has a long tradition of protecting intellectual property. The Patent Box scheme allows access to tax benefits on income derived from certain intangible assets, enhancing the country’s appeal to technology and innovative companies.
At the same time, setting up a startup in Madeira offers even more tax advantages through the tax regime of the International Business Centre of Madeira.
NEWCO has 35 years of experience and a multidisciplinary team ready to help.
Contact us!One of the main advantages of setting up a start-up in Portugal is direct access to the European Union market, which allows companies to operate in an economic area with over 400 million consumers. At the same time, Portugal offers a stable regulatory environment that is favourable to foreign investment.
The country also stands out for its competitive operating costs compared to other European technology hubs, particularly in terms of salaries, office space and business services. This enables startups to optimise resources during the early stages of growth.
Another distinguishing factor is the availability of skilled talent. Portugal has internationally recognised universities and a highly specialised workforce in the fields of technology, engineering, software and digital services. Furthermore, a large proportion of the working population speaks English fluently, which facilitates the internationalisation of businesses.
Start-ups in Portugal also benefit from various public programmes supporting entrepreneurship, funding and innovation, as well as a well-established network of incubators, accelerators and access to venture capital. Portugal also has the Startup Visa, a specific residence permit for international founders and entrepreneurs.
In terms of taxation, Portugal offers significant incentives for innovative companies, including benefits relating to research and development, as well as the Patent Box scheme, which applies to certain income derived from intellectual property and registered software.
The route of obtaining this prior declaration from Startup Portugal should not be seen as a fast-track procedure. Hence, applicants should bear in mind that the requirements for Startup certification are strict and that Startup Portugal will ask for additional information to assess full compliance with the regime.
The Portuguese startup ecosystem is not the largest in Europe, but it delivers impressive results. According to data from Startup Portugal, the Portuguese startup ecosystem accounted for around 1.1% of national GDP in 2018, reflecting the sector’s rapid growth and the increasing economic impact of technology and innovation companies in the country.
Portugal continues to strengthen its European position in innovation. In 2025, the European Innovation Scoreboard ranked the country 16th in the European Union
Portugal has a National Incubator Network that identifies, maps and connects the incubators and accelerators existing in the country. This network currently comprises over 100 accelerators and incubators, spread across the country.
The role of this National Incubator Network is to promote cooperation and the sharing of resources and knowledge within the network, in order to improve the resources and services available to entrepreneurs and businesses.
Find out here which incubator is best suited for your potential location.
The growth of the start-up ecosystem in Portugal is evident in the number of Portuguese unicorns. Companies such as OutSystems, Feedzai, Talkdesk, Remote, Sword Health, Anchorage Digital and Tekever have helped position Portugal as one of the most promising European markets for innovation and technology.
The annual Web Summit in Lisbon has also boosted Portugal’s international profile among investors, accelerators and global entrepreneurs, cementing the country’s status as a European hub for tech startups.
Start-ups in Portugal currently have access to an increasingly developed and diversified funding ecosystem.
Portugal has several venture capital funds, such as Portugal Ventures and Indico Capital.
There are also public programmes supporting entrepreneurship and research, often co-financed by European funds, which aim to stimulate the creation and expansion of startups.
The Startup Visa is a type of residence visa that grants residency to foreign entrepreneurs wishing to develop a business and/or innovation project in Portugal.
Foreign entrepreneurs wishing to set up an innovative business are eligible for a residence visa that allows them to launch a start-up from scratch or relocate an existing one to Portugal. To do so, the prospective entrepreneur must demonstrate the following:
The assessment of economic and innovative potential is based on the degree of innovation, business scalability, market potential, the management team’s capabilities, and the potential for creating skilled jobs in Portugal.
Portugal offers a competitive tax framework for start-ups and innovative companies.
The corporate income tax rate in mainland Portugal is set at 19%, which is a competitive rate within Europe. Small and medium-sized enterprises (SMEs) benefit from a reduced rate of 15% on the first €50,000 of taxable income.
Start-ups established in the Autonomous Region of Madeira benefit from even lower tax rates:
In addition, start-ups in Portugal have the following additional advantages:
Since its introduction in 2014, the Portuguese Patent Box regime has been amended and brought into line with the latest OECD standards, such as the modified nexus approach.
In 2022, the tax deduction was increased from 50% to 85% of income from covered intangibles, meaning that with corporation tax (and surcharges) at standard effective rates, this type of income can benefit from much lower effective rates (with even lower rates for companies in Madeira).
This scheme includes copyright on registered software, making it much more inclusive and aligned with current trends in value creation.
To qualify for the scheme, a Portuguese start-up must meet specific cumulative requirements, such as:
Under Portuguese law, there are two meanings of intellectual property: a broader one and a more specific one. The first covers industrial property – patents, designs, trademarks, logos, trade secrets, designations of origin and geographical indications. The second covers copyright and related rights.
The Portuguese legal system provides for both the more common intellectual property rights – patents, designs, trademarks, logos, designations of origin, geographical indications and copyright – as well as less common rights, such as semiconductor topographies, plant variety rights, trade secrets or know-how.
The National Institute of Industrial Property (INPI) is the Portuguese public body responsible for protecting and promoting industrial property. It is particularly active in assisting entrepreneurs and ensuring that they comply with all Portuguese legal requirements.
Setting up a start-up in Portugal is relatively simple for both national and international entrepreneurs. We can outline the process in the following steps:
1. Choose the most appropriate legal structure.
Most start-ups opt to set up a Limited Liability Company (Lda), due to the corporate flexibility and low operating costs.
2. Company registration.
Prior to registration, it will be necessary to obtain approval of the name (business name), issue the Certificate of Admissibility, approve the corporate purpose, and prepare and sign the Articles of Association. Registration is carried out at a Commercial Registry Office.
3. Commencement of business activities
At this stage, the Declaration of Commencement of Activity must be submitted to the Tax Authority, in addition to registering the company with Social Security and registering the beneficial owners.
Setting up a start-up in Portugal requires an appropriate legal, tax and regulatory framework from the outset.
The choice of corporate structure, the protection of intellectual property and compliance with legal obligations can have a significant impact on the growth and scalability of the business, so it is always advisable to seek the support of an experienced local partner.
NEWCO supports national and international start-ups at every stage of the investment and implementation process in Portugal.
