The criteria is summarised as follows:

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Portugal is also part of the European Union and therefore has free access to the European market.

English is widely spoken in Portugal making it seamless for business to be conducted with local employees or partners and even more importantly, making it easy to perform international business activities.

Another beneficial aspect relates to inbound and outbound distributions made. Under the participation exemption; dividends and capital gains may be exempt from taxes provided certain criteria are met.


Hold the shares for a consecutive period of one year;
Hold directly/indirectly 10% of the shares/voting rights;
Subsidiary is not resident in a Portugal black-listed tax jurisdiction; and
The subsidiary is not exempt from corporate income tax or has a tax rate of at least 60% macedonia mobile database of the standard Portuguese corporate income tax rate (12.6% calculated as 21%×60%).
Portugal, undoubtedly, ticks many of the key characteristics as an ideal location for a holding or operating company, to be established and maintained.

What type of company can be formed in Portugal?
Portugal has three types of company that can be incorporated, and it is important to understand the differences, as the substance criteria vary widely, as well as the implications in relation to corporate income tax.

Companies may be incorporated through; Portugal mainland, the island of Madeira, or the International Business Centre of Madeira (also based on the island of Madeira).