Operating a Business

flag Portugal Portugal: Operating a Business

In this page: Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labour | Management of Human Resources

 

Legal Forms of Companies

The Sociedade por quotas de responsabilidade limitada (Lda): Limited Liability Company
Number of partners: Two partners minimum. There may be one partner only in the case of a Single Person Private Limited Liability company (SUQ).
Capital (max/min): Minimum EUR 1.
Shareholders and liability: Liability is limited to the amount of capital contributed.
The Sociedade anonima de responsabilidade limidada (SA): Public Limited Company
Number of partners: Five partners minimum; they may be foreigners and non-residents.
Capital (max/min): 50,000 EUR minimum, entirely taken up, with the obligation to release at least 30%.
Shareholders and liability: Liability is limited to the amount of capital contributed.
The Sociedade em nome colectivo: General Partnership
Number of partners: Two partners minimum.
Capital (max/min): No minimum share capital.
Shareholders and liability: Liability is joint and indefinite regarding third parties.
The Sociedade em comandita: Limited Joint-stock Partnership
Number of partners: Two partners minimum, with active partners and silent partners.
Capital (max/min): No minimum share capital.
Shareholders and liability: Liability is indefinite for active partners, and limited to the amount of capital contributed for silent partners.
 

Business Directories

Financial Information Directories
Dun & Bradstreet - Worldwide directory with financial information on businesses
Informa - Portuguese business directory
Kompass - Portugal Business directory

To go further, check out our service Business Directories.


 

Professional Associations

General Professional Associations
IAPMEI - Government Institution for SMEs Support
AEP - Business Association of Portugal
AIP - Portuguese Industrial Association

To go further, check out our service Professional Associations.


 

Business Setup Procedures

Setting Up a Company Portugal OECD
Procedures (number) 6.00 5.21
Time (days) 6.50 9.47

Source: Doing Business - Latest available data.

 
The Competent Organisation
ePortugal web portal
For Further Information
Consult Doing Business Website, to learn about procedures to start a Business in Portugal
Trade Register, in Portuguese
 

Recovery Procedures

Principle
Within the framework of the safeguard scheme, two legal decisions are generally made:
- being put into receivership, a state where payment stops, it is impossible to face the liabilities due with the current assets.
- compulsory liquidation, a persistent state where payment stops and receivership is manifestly impossible.
Minimum Debt-to-Capital Ratio Triggering Liquidation
No minimum
Reorganization and Rehabilitation Laws
Company insolvency and recovery Code

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The Active Population in Figures

201820192020
Labour Force 5,267,8125,288,7335,190,690

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 74.91%75.39%75.77%
Men activity rate 78.29%78.47%78.69%
Women activity rate 71.76%72.51%73.04%

Source: International Labour Organization, ILOSTAT database

 
Employed Persons, by Occupation (% of Total Labour Force) 2015
Manufacturing 16.9%
Wholesale and retail trade; repair of motor vehicles and motorcycles 15.4%
Human health and social work activities 8.9%
Education 8.4%
Agriculture, forestry and fishing 7.5%
Public administration and defence; compulsory social security 6.7%
Construction 6.1%
Accommodation and food service activities 5.7%
Professional, scientific and technical activities 4.2%
Transportation and storage 3.8%
Administrative and support service activities 3.4%
Financial and insurance activities 2.4%
Information and communication 2.3%
Arts, entertainment and recreation 1.5%
Water supply; sewerage, waste management and remediation activities 0.6%
Real estate activities 0.6%
Electricity, gas, steam and air conditioning supply 0.4%
Mining and quarrying 0.3%
 
For Further Statistics
INE
Ministry of Labour and Social Security
For Further Information About the Labour Market
CES, The Economic and Social Council

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Working Conditions

Opening Hours
 
  • Legal Weekly Duration
39 hours
  • Maximum Duration
Maximum duration: 10 hours a day and 48 hours a week.
  • Night Hours
Between 9 pm and 6 am.
Working Rest Day
Sunday
Paid Annual Vacation
22 working days a year, +3 for regular attendance (no unjustified absences).
Retirement Age
65
Child Labour and Minimum Age For Employment
16
Informal Labour Market
Undeclared work is above all made up of only partially declared hours of work or undeclared overtime.
This is especially in Public Buildings and Works, where the control of workmen's wages (particularly foreigners) is inaccurate.

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The Cost of Labour

Pay

Minimum Wage
EUR 705 per month if based on 14 payments in a year, or EUR 823 based on 12 payments (source: Eurostat, Government of Portugal, 2022)
Average Wage
Gross average monthly wage: EUR 1,250.75 (source: INE-Statistics Portugal, 2020)
Other Forms of Pay
  • Pay For Overtime
Under modification.
  • Pay For Rest Days Worked
According to collective agreements.
  • Pay For Night Hours
Under modification.
  • Pay For Overtime at Night
Under modification.
 

Social Security Costs

The Areas Covered
Health insurance (medical care, maternity, disability, death), retirement pensions, family allowances, unemployment benefits
Contributions
Contributions Paid By the Employer: 23.75% on the monthly gross remuneration of employees, and insurance premium to cover occupational accidents at a rate varying according to risks.
Contributions Paid By the Employee: 11% on the monthly gross remuneration of employees, and insurance premium to cover occupational accidents at a rate varying according to risks.
Competent Organization
Segurança Social

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Management of Human Resources

 

Recruitment

Method of Recruitment
More and more applications are being made via Internet or the press. Recruitment in Portugal is mainly carried out by inviting candidates for a face-to-face interview.
Recruitment Agencies
The public institution is the IEFP.
There are several recruitment companies: Egor, Psicoteste, Hays.
Recruitment Websites
Stepstone
Michael Page
Ofertas Emprego
 

The Contract

Type of Contract
The work contract is governed by legal provisions and, to a lesser extent, by collective agreements and individual negotiation. Work contracts and hiring/firing conditions are extremely rigid.

Breach of Contracts

  • Retirement
There are several ways of retiring: early retirement, automatic retirement and official retirement.
  • Dismissals
The employer initiates dismissals:
- redundancy comes in the form of either individual or mass redundancy
- dismissal for professional misconduct
  • Other Possible Methods
Resignation; this is initiated by the employee.
Labour Laws
National legislation (only in Portuguese)
Doing Business: Portugal, to obtain a summary of labour regulations that apply to local entreprises
 

Dispute Settlement

 

Conciliation Process

Cases of Dispute
Physical violence, moral harassment, sexual harassment, working conditions, etc.
  • Legal Framework
Before going to court, forms of conciliation are possible: mediation, arbitration (which may be compulsory or not, by ministerial decision). Arbitration produces results with the same power as collective contracts. If it fails, the following step will be the « Tribunal do trabalho » of the competent jurisdiction.
However, at this time, the settlement of disputes is also under discussion between the government and the unions (employers' and union confederations).
  • Procedure
The Labor Code
 

Judicial Structures

  • Legal Framework
Defined in the Labor Code.
  • Competent Legal Body
The Labor Tribunal.
To appeal: the Tribunal of 2nd instance, labor section.
 

Social Partners

Social Dialogue and Involvement of Social Partners
There are two major union confederations: the CGTP (very close to the Communist Party) which is typically very critical of and eager to challenge government measures, and the UGT (close to the Socialist Party and the Social-Democrats), a more moderate group. While the UGT also criticises government measures, it often manages to come to a consensus with the government. Negotiations between Employers' Confederations, the Government and Union Confederations usually take place at the Conselho Económico e Social. These discussions take place systematically at the beginning of each year, but also when important dossiers about lab or law are discussed. In recent years, there have been many strikes and demonstrations against government austerity measures and economic policies.
Unionisation Rate
18.4%
Unions
CGTP
UGT
Regulation Bodies
Ministry of Agriculture
Confederation of Portuguese Agricultural Cooperatives (CONFAGRI)
Portuguese Agricultural Federation
Ministry of Labour
 
 

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Latest Update: November 2022