Can a French citizen form a Portuguese company without relocating?
Yes, under EU freedom of establishment. A French citizen can form a Portuguese Lda while remaining French tax resident. However, the most common driver for French founders forming Portuguese companies is the personal tax benefit from actually relocating and establishing Portuguese tax residency.
French entrepreneurs have increasingly relocated to Portugal and incorporated Portuguese limited liability companies, drawn by the Non-Habitual Resident (NHR) tax regime (in its original and successor forms), significantly lower cost of living than most French metropolitan areas, Portugal’s full EU membership with EU-standard legal and banking infrastructure, and a startup-friendly ecosystem centered on Lisbon and Porto.
A Portuguese Sociedade por Quotas (Lda) is readily formable by French citizens under EU freedom of establishment, with 21 percent corporate tax (reduced to 17 percent for the first 50,000 EUR of taxable profit), full Portuguese residency available to French citizens under EU citizenship, and access to the broader Portuguese NHR or successor regime for qualifying new residents.
This guide walks a French national through opening a Portuguese Lda in 2026: EU citizenship-based residency and NIF acquisition, the NHR regime transition to the new IFICI regime effective 2024 for new applicants, Portuguese corporate tax structure, IRS (Imposto sobre o Rendimento das Pessoas Singulares) personal tax, D8 visa for non-EU founders as reference, banking options and costs in EUR from formation through year two.
Why Portugal for French Founders
Portugal offers several advantages over remaining in France for founders willing to relocate. First, the NHR regime (for applicants who grandfathered in before 2024) and its successor IFICI regime provide favorable tax treatment for new Portuguese residents on certain foreign income and specific qualifying occupations.
Second, the standard Portuguese corporate tax of 21 percent (17 percent on the first 50,000 EUR of taxable profit for SMEs) is lower than French corporate tax (which ranges from 15 percent on the first 42,500 EUR to 25 percent standard). Third, Portugal’s lifestyle factors (cost of living, climate, lifestyle balance) have driven a substantial French relocation trend over the past decade.
Fourth, EU freedom of establishment means French citizens can move to Portugal, work, form companies and access the Portuguese public system without visa or permit, just like any EU internal movement.
New applicants in Portugal say goodbye to the NHR regime at year-end 2023, with IFICI (Incentivo Fiscal a Investigação Científica e Inovação) taking over in 2024. IFICI narrows the scope from the broad NHR approach, requiring specific research, innovation and high-value activities rather than the wider NHR criteria.
French founders moving to Portugal need to know whether the NHR grandfather rule, IFICI or standard Portuguese taxes apply to their situation.
Portugal is a full-tax EU jurisdiction with 21 percent corporate tax and IRS rates up to 48 percent plus solidarity surcharge on very high incomes. The tax advantages for French founders are real but specific to qualifying regimes and to the lower cost base enabling higher take-home at given gross revenue.
Review the Portugal AT (Autoridade Tributaria) taxpayer portal and the current IFICI regime guidance before planning.
Portuguese Limited Company: Sociedade por Quotas (Lda)
The Lda represents the standard private limited company form in Portugal. Filing requirements follow:
- At least one partner must be French (the French citizen can be the sole partner with 100 percent ownership).
- Minimum share capital of 1 EUR per partner (effectively no minimum)
- Registered office in Portugal
- Named managers (gerentes)
- Articles of association (contrato de sociedade)
Incorporation runs through the Portuguese Institute of Registries and Notaries (IRN). The “Empresa na Hora” (Company in the Hour) program allows incorporation of standard Ldas in a single 1- to 3-hour appointment at an Empresa na Hora office, with standard pre-approved names and standard articles. Custom incorporations go through longer paths.
Formation Step by Step
A French citizen forming a Portuguese Lda:
- ** Obtain NIF (Numero de Identificacao Fiscal), which is the Portuguese tax identification number. EU citizens can apply directly at a Portuguese tax office or through a fiscal representative working remotely.
- Choose a company name or use a pre-approved name under Empresa na Hora.
- Deposit share capital in the amount of at least 1 EUR into a designated bank account.
- Prepare articles of association (standard under Empresa na Hora, custom otherwise).
- Incorporate at Empresa na Hora office (1 to 3 hour appointment), or through traditional IRN filing.
- Receive incorporation certificate and company ID number.
- Register with Autoridade Tributaria for corporate tax and VAT if applicable.
- Register with Seguranca Social to begin paying into the social security system.
- Open bank account at Millennium BCP, Santander Portugal, Caixa Geral de Depositos, Novobanco, or fintechs.
End-to-end: 1 to 4 weeks via Empresa na Hora, longer for custom articles or complex structures.
French Citizens and Portuguese Residency
French citizens, as EU citizens, have automatic right of residence in Portugal under EU Directive 2004/38/EC. For stays exceeding 90 days, French citizens register with the Camara Municipal or Servico de Estrangeiros e Fronteiras (SEF, now AIMA under recent reforms) to obtain a Certificado de Registo (registration certificate).
Portuguese tax residency is triggered by 183+ days of physical presence in Portugal in a 12-month period, or by maintaining a home in Portugal that indicates intent to remain. A French citizen who moves to Portugal and establishes tax residency is no longer French tax resident (subject to French treaty tie-breaker rules) and pays Portuguese IRS on worldwide income.
Founders eligible for the older NHR regime - those registered before the 2023 year-end - can access 10-year exemptions and lower rates on foreign-source income and specified Portugal-source “high value” occupation earnings.
Founders eligible under the new IFICI regime through 2024 and beyond operate within a more constrained framework. Qualifying research and innovation activities, qualifying investment positions or specified occupations earning research tax credits apply at a 20 percent IRS flat rate on Portugal-source qualifying income.
For founders who do not qualify for IFICI, standard Portuguese IRS applies at progressive rates up to 48 percent plus solidarity surcharge.
France-Portugal Tax Treaty
France and Portugal maintain a comprehensive double taxation agreement. The key provisions include:
- Dividends: 15 percent (individual shareholders), reduced 5 percent (10+ percent corporate ownership)
- Interest: 12 percent
- Royalties: 5 percent
- Business profits are taxable in the source country only if they can be attributed to a permanent establishment.
Double taxation is prevented by foreign tax credit mechanisms in the treaty. When a French tax resident receives Portuguese dividends, they pay French tax using Portuguese tax credit. When a Portuguese tax resident receives French dividends, they pay Portuguese IRS using French tax credit.
The NHR regime that drove much of the French relocation boom to Portugal between 2015 and 2023 closed at the end of 2023 for new applicants. The successor IFICI regime is narrower and more specific.
French founders evaluating Portuguese relocation in 2024 and beyond should not assume NHR-era tax outcomes will apply, the specific IFICI qualifying criteria determine whether the 20 percent flat rate on qualifying income is available, and many common French founder profiles do not qualify.
For French founders who do qualify for IFICI or who are grandfathered into NHR, the combined effect of Portuguese 17 to 21 percent corporate tax plus 20 percent personal tax on qualifying distributions produces effective total tax materially below French equivalents (33 to 60+ percent combined depending on income level).
For founders who qualify for neither regime, Portugal’s standard tax profile is reasonable but not dramatically better than France.
Portuguese Corporate Tax and VAT
Corporate tax (IRC): 21 percent on taxable profits. 17 percent on first 50,000 EUR of taxable profits for SMEs (small and medium enterprises meeting qualifying criteria). Derrama municipal surcharge (0 to 1.5 percent) and derrama estadual state surcharge (3 to 9 percent above certain profit thresholds) can apply in addition.
VAT (IVA): 23 percent standard rate (22 percent in Azores, 16 percent in Madeira), 13 percent intermediate, 6 percent reduced. Mandatory registration above specific thresholds.
Social security (Seguranca Social): employer contribution of 23.75 percent on gross payroll for standard employees.
| Tax Item | Rate |
|---|---|
| IRC standard | 21 percent |
| IRC SME first 50k EUR | 17 percent |
| Derrama estadual (top) | up to 9 percent additional |
| IVA standard | 23 percent |
| IRS (personal progressive) | up to 48 percent plus solidarity |
| IRS flat under IFICI qualifying | 20 percent |
| Seguranca Social employer | 23.75 percent |
| Seguranca Social employee | 11 percent |
Banking Reality
French founders move through Portuguese banking with EU citizenship advantages. Large banks including Millennium BCP, Santander Portugal, Caixa Geral de Depósitos, Novobanco and BPI open business accounts by appointment, processing takes 1 to 4 weeks. Fintech platforms within the EU like Revolut Business, Wise Business, N26 and Bunq facilitate remote account opening effectively.
| Bank | Onboarding Time |
|---|---|
| Millennium BCP | 1 to 3 weeks |
| Santander Portugal | 1 to 3 weeks |
| Caixa Geral de Depositos | 2 to 4 weeks |
| Novobanco | 2 to 4 weeks |
| BPI | 2 to 4 weeks |
| Revolut Business | 1 to 2 weeks |
| Wise Business | 1 to 2 weeks |
Costs in EUR
| Item | Year 1 | Year 2 |
|---|---|---|
| Empresa na Hora registration | 360 | 0 |
| Custom articles (if used) | 500 to 1,500 | 0 |
| Share capital (nominal) | 1 to 5,000 | 0 |
| Registered office | 200 to 800 | 200 to 800 |
| Accounting (annual) | 1,500 to 4,500 | 1,500 to 4,500 |
| VAT registration | 0 | 0 |
| Bank setup | 0 to 200 | 0 |
| Seguranca Social annual minimum (manager) | 2,500 to 5,000 | 2,500 to 5,000 |
Year 1 total (Empresa na Hora): 5,000 to 10,500 EUR. Year 2 steady state: 4,200 to 10,300 EUR.
Operating Reality
Many French founders operating in Portugal structure their business as an Lda and manage remote work for French clients under EU intra-community services rules. French clients account for VAT themselves (reverse charge method) which simplifies the Portuguese VAT stance. Portuguese corporate tax rates come to 17 to 21 percent.
For founders qualifying for NHR grandfather or IFICI, the personal tax layer on distributed profits and salary becomes substantially lower than French equivalents, providing the core tax motivation for the relocation.
Common Mistakes French Founders Make
Five patterns recur. First, assuming NHR is still available for new applicants, it closed at the end of 2023 and the successor IFICI has narrower eligibility. Second, not establishing Portuguese tax residency properly before claiming Portuguese tax treatment. Third, underestimating Seguranca Social contributions for managers (gerentes) of Portuguese Ldas.
Fourth, running a “paper” Portuguese entity without substance while claiming Portuguese tax benefits, facing scrutiny from Portuguese tax authorities and from the French Direction generale des Finances publiques (DGFiP). Fifth, neglecting the French tax exit process (changement de residence fiscale) properly when moving, leaving unresolved French tax filings that can cascade.
When the Portugal Move Makes Sense
The Portugal move makes clear sense for French founders who:
- Qualify for NHR grandfather or IFICI regime and can capture the reduced personal tax rate
- Relocation with tax residency effect, not just maintenance of a nominal Portuguese company, is what they are willing to do.
- Services, consulting, SaaS and content businesses can operate in Portugal with revenue flexibility and minimal disruption.
- Are cost-sensitive to French wage-tax and social-charge burden
It makes less sense for founders who:
- Cannot relocate (family, obligations)
- Do not qualify for either NHR grandfathering nor IFICI.
- Requires strong French business infrastructure covering regulated sectors, public procurement and specific French employment rules.
Timeline
- Week 1 covers NIF acquisition, which is possible remotely through a fiscal representative.
- Week 2 covers Empresa na Hora appointments or custom article preparation.
- Week 2: Incorporation (same-day via Empresa na Hora)
- Weeks 2 through 4 focus on setting up the bank account.
- Weeks 3 to 4 cover corporate tax and VAT registration as well as Seguranca Social registration.
- Weeks 4 to 6 mark when the system becomes fully operational.
Exit Tax and French Tax Residence Transition
French tax residents considering Portuguese relocation face the exit tax (exit tax francaise) under Article 167 bis of the CGI, which applies to individuals leaving France with substantial unrealized capital gains on shareholdings (currently 50 percent ownership or 800,000 EUR threshold in French or foreign participations).
The exit tax triggers a tax on the latent capital gain at the moment of exit, though payment can be deferred with conditions when moving to an EU state like Portugal.
French entrepreneurs moving equity positions from French or international companies to Portugal need to approach exits thoughtfully, ideally with strategy coordinated by French and Portuguese tax advisors working together. While EU deferred payment mechanisms ease cash flow management, the underlying tax liability does not disappear.
French Social Security Transition
A French founder moving to Portugal transitions from the French social security regime (URSSAF, RSI/SSI) to the Portuguese Seguranca Social. Under EU regulation 883⁄2004 and its implementing regulation 987⁄2009, the transition is coordinated between the French and Portuguese social security authorities.
Accumulated French social security entitlements (pension points, healthcare coverage) are preserved and can be aggregated with Portuguese contributions for future benefit calculations.
For founders running a Portuguese Lda where they are the manager (gerente), Portuguese Seguranca Social contributions apply to their manager income. The French side winds down as the founder ceases French activity. Coordinating the transition smoothly avoids gaps in social security coverage, particularly for healthcare access during the move.
French Founder Operating Patterns
French founders in Portugal commonly fit one of several patterns:
- Full relocation with Portugal-centric business. All operations run through the Portuguese Lda, no continuing French business. Cleanest tax and administrative setup, particularly with NHR grandfather or IFICI qualification.
- Partial relocation with French clients. Portuguese Lda invoices French clients under EU intra-community services rules. French clients self-account VAT (reverse charge). Corporate tax accrues in Portugal.
- Dual structure. The company operates primarily through a Portuguese Lda, while retaining a French SASU or SARL for specific French activities including public sector work, regulated industry roles and French market physical services that cannot be feasibly managed from Portugal.
Business owners decide based on where genuine commercial substance exists, the regulatory profile that fits specific client types and personal residency strategy.
Portugal vs Other EU Destinations for French Founders
Portugal is one of several EU destinations for French founders relocating for tax and lifestyle reasons. Alternatives include:
- Italy with the flat-tax regime for new residents (100,000 EUR annual flat on foreign income)
- Greece with a similar non-dom regime
- Malta with specific tax frameworks including the non-dom regime and 35 percent refundable corporate tax reducing to 5 percent effective
- Cyprus offers a 12.5 percent corporate tax rate along with a non-dom personal regime.
- Ireland offers a 12.5 percent corporate tax rate that gets discussed in the UK context but is also open to French founders.
French founders continue to find Portugal appealing because of language proximity (shared Portuguese-French cognate vocabulary), existing French expat communities in Lisbon, Porto and the Algarve and relatively short distance (a 2-hour flight to Paris).
The IFICI regime’s reduced eligibility range compared to the old NHR has weakened Portugal’s distinctive tax advantage for certain founder types, causing Italy, Greece, Cyprus or Malta to become more relevant for 2024 and later applicants.