Yes, foreigners are allowed to invest in Portugal by directly purchasing any real estate asset.
Last modified 13 Mar 2025
Yes. Direct investment may be carried out in Portugal either through a permanent establishment (estabelecimento estável) or without a permanent establishment. Please note, however, that the direct holding of real estate may be deemed to be a permanent establishment in Portugal if the real estate qualifies as a fixed place of business through which an activity of a commercial, industrial or agricultural nature is carried out by the non-resident investor.
The existence of a permanent establishment for tax purposes is a question of fact. The formal establishment of a branch costs approximately EUR 1,000 and may take between two and three weeks.
Corporate governance requirements are limited to listed public limited companies and are not applicable to a permanent establishment. However, similar requirements can be implemented by companies by way of self-regulation and a best practice approach to business.
Last modified 13 Mar 2025
In Portugal, the corporate vehicles used to hold real estate assets are the Sociedade por Quotas (SQ), the Sociedade Anónima (SA) and the Sociedades de Investimento Imobiliário (SIIMO).
The SIIMO, a relatively new type of company, is effectively an incorporated form of collective investment structure, subject to the legal framework applicable to real estate investment funds. This type of corporate structure may assume the form of a SICAVI, a company limited by shares with variable share capital, or a SICAFI, a company limited by shares with fixed share capital.
Both types of companies are specially designed for ownership and management of real estate assets, being managed like real estate funds with constitutions subject to the regulation by the CMVM (the Portuguese Securities Market Commission).
Under law No. 16/2015, of 24 February 2015, the initial share capital required for a self-managed SIIMO, whether it is a SICAVI or a SICAFI, as a rule, is EUR 300,000.
Last modified 13 Mar 2025
An SQ is a private limited liability company. The registered capital in an SQ is divided between the shareholders by reference to the percentage of the capital of the company they hold. Under Portuguese law a share is a dematerialized form of instrument, not represented by a material document and subject to registration on behalf of its owner with the Registry of Companies, thus allowing public and unrestricted access to the owner's details.
The minimum number of shareholders for an SQ is one, and in such cases the SQ is called a Sociedade Unipessoal por Quotas (SUQ) and shares have a minimum value of EUR 1, meaning that the minimum share capital is EUR 1. However, an SQ may be formed by two or more shareholders, in which case the minimum share capital must be at least equal to the number of shareholders.
A Sociedade Anónima (SA) is a limited liability company with shares either listed or unlisted. The minimum number of shareholders in general is five. However, there can be SAs whose number of shareholders equal to:
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Minimum share capital of EUR 1 or great than or equal to EUR 2, where the company is owned by one or two or more shareholders respectively.
Minimum share capital of EUR 50,000.
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Usually around EUR 1,000, lawyers’ fees not included. Please note that the execution of the relevant corporate documents does not need to be effected by public deed.
Usually around EUR 1,000, not including lawyers’ fees.
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The timescale for incorporation is normally two to three weeks. This may be reduced by paying priority charges. There is also a simplified one-day incorporation procedure for companies that adopt standard articles of association and pre-approved names, registered through a one-stop-shop procedure.
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An SQ is typically a smaller business controlled by a limited number of individuals and/or companies. An SQ is managed by one or more directors (Gerentes). Activities carried out by its directors bind the company in relation to third parties but the directors have their capacity limited by the company's purpose, by-laws and by shareholders' resolutions.
An SA is normally a larger business with a relatively complex administrative and supervisory structure. It is typically managed by a board of directors, although it is possible to have a single director if the share capital of the company does not exceed EUR 200,000.
Considerable flexibility on corporate governance under a self-regulation approach can be provided for in the by-laws.
Three forms of corporate governance are possible:
It is also possible to appoint a company secretary (this is mandatory for listed companies).
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It is hard to estimate accountants' costs, due to the fact that companies and accountants are free to determine the terms of engagement, particularly the fees.
The basic services of an accountant should include the organization of the company’s accounts, monthly or quarterly VAT returns, yearly corporate tax returns and preparation of the annual financial statements. Accordingly, a minimum of approximately EUR 3,000 per year should be allowed for.
In specific cases, and in particular when certain thresholds are exceeded (in relation to turnover, the number of employees and other criteria), companies must appoint a supervisory council or a chartered accountant.
It is hard to estimate accountants' costs, due to the fact that companies and accountants are free to determine the terms of engagement, particularly the fees.
Last modified 13 Mar 2025
Portuguese corporate income tax (IRC) is levied at a normal rate of 20% plus a municipal surcharge of up to 1.5%. (levied by many Portuguese municipalities) and a state surcharge of 3%, on income between EUR 1.5 million and EUR 7.5 million. For income varying between EUR 7.5 million and EUR 35 million the surcharge rises to 5%. For income above EUR 35 million the surcharge rises to 9%. Taxable income for IRC purposes is calculated on the basis of the net accounting profit as adjusted for tax purposes. A reduced rate of 16% may be applicable to the first EUR 50,000 of taxable income (if the company is recognized as a small or medium-sized company or as a small-mid cap). These rates apply both to SQ and to SA. The reduced rate mentioned above should be of 12.5% if the company qualifies as a start-up entity in accordance with the applicable Portuguese requirements.
Capital gains from the sale of real estate are equally subject to the above rates. It should be noted that there is a “tax-exemption” of 50% applicable to capital gains from the sale of certain assets, if the sales proceeds are reinvested in the purchase of certain qualified assets.
Last modified 13 Mar 2025
Are foreigners allowed to invest by directly purchasing a commercial real estate asset?
Yes, foreigners are allowed to invest in Portugal by directly purchasing any real estate asset.
Last modified 13 Mar 2025