Topic 1 Steps & tips on how to set up a business in Portugal / legal framework for starting up a business in Portugal as a TCN
Starting and running new businesses is a vital process in any dynamic economy!
As argued by the Global Entrepreneurship Monitor, new businesses:
- bring new jobs and increased incomes
- add value, often by introducing new ideas, technologies and products to society.
- Generate and develop your business idea
- Lack of job opportunities
- Creation of income sources
- Job creation (for oneself or for others)
- Family constraints
- Self-realisation
- Independence
- Expanded scope for creativity
- Personal recognition and status
- Pull factors: Opportunity driven entrepreneurship
Women that start a business due to have identified one opportunity in the market, they intend to exploit; the creation of the business could also be driven by the opportunity to being independent or increasing their income
- Push factors: Necessity driven entrepreneurship
Women that start their own business because they have no other option for work or they intend to maintaining their income
# Learn more about some of the concepts related to entrepreneurship and the creation of a new businesses in the Global Entrepreneurship Monitor website
- Some migrants, when they arrive in the host country, seek to explore business opportunities that will enable them to improve their living conditions and those of their families
- Also, entrepreneurship is often a tool for labour integration of immigrants in the host country
- Herein, the creation of a new business is seen as an alternative to the lack of employment and the working conditions achieved
- Overall, immigrants tend to be more likely to adopt entrepreneurial behaviour than the native population in general
In Portugal, The Constitution of the Portuguese Republic, in its article 82, establishes the existence of three sectors of activity: the public sector; the private sector; and the cooperative and social sector.
- The public sector consists of those means of production whose ownership and management belong to the State or to other public entities
- The private sector is constituted by those means of production the ownership or management of which belong to private natural or legal persons
- The cooperative and social sector comprises the production means owned and managed by cooperatives; community production means, owned and managed by local communities; production means collectively exploited by workers; production means owned and managed by non-profit collective persons whose main objective is social solidarity, namely entities of a mutualistic nature.
In Portugal new businesses developed in the private sector can be constituted following one of the legal formats defined in the Portuguese Commercial Companies Code:
- a company or entrepreneur in individual name (Empresário em Nome Individual)
- limited liability companies (Estabelecimento Individual de Responsabilidade Limitada)
- single-person limited company (Sociedade Unipessoal por Quotas)
- Society in Corporate name (Sociedade em Nome Coletivo)
- private limited company (Sociedade por quotas)
- public limited company (Sociedade Anónima)
- command companies (Sociedade em Comandita)
- Cooperative
- Association
- Foundation
- Among others;
# Consult the Portuguese law on social economy for e deeper knowledge on the topic
If you have a business and want to extend your activities to another EU country (in this case, the 28 EU member states including Iceland, Liechtenstein and Norway), you could consider forming a European Company.
For further detail you could consult the YourEurope website
More detailed information on the characteristics of each of these legal formats and the necessary steps for its constitution can be found in:
The website of eportugal.gov.pt 
You can also find more information on the following pme.pt
Currently it is possible to create a company in a faster and more agile way through the “on the spot company” modality (in Portugues empresa na hora)
This service is available for the following modalities: single-person limited company, private limited company and public limited company
Find out more information on this topic at the following websites:
- Short-term financing: to ensure cash (liquidity) to meet the operating expenses of the business
- Medium/long-term financing: used for investments with a longer time horizon
- Equity financing: investment made by partners and shareholders. Includes share capital (initial subscription and capital increases) and supplementary capital contributions; business angels and venture capital could either be included here;
→ Equity finance means do not require capital reimbursement, but the distribution of potential profits;
- Financing through borrowed capital: includes bank loans, shareholder loans, bond loans, among others;
The capital requested must be repaid, plus the interest defined in the loan contract. The period during which the loan occurs (maturity) is also defined in the contract.
- Self-financing: financing done through the profits released by the project, which are retained by the organisation.
Only applicable to projects that have already been set up and are profitable.
IAPMEI offers a platform for identifying different sources of finance for a new business.
The guidance is directed according to the different characteristics of the entrepreneur and the business
- The Institute of Employment and Professional Training (IEFP) website also offers The website of the Institute of Employment and Vocational Training also offers a variety of information on the instruments for promoting entrepreneurship by supporting the creation of companies and self-employment, under the Support Programme for Entrepreneurship and the Creation of Self-Employment and Empreende XXI.
- It will also be possible to access information on microcredit, in the scope of the National Microcredit Programme
- In addition, private for-profit banks also have some lines of finance for the creation of new businesses
- Businesswomen could also use crowdfunding as a possible financing method.
- Crowdfunding consists in financing entities, or their activities and projects, through electronic platforms accessible through the internet
- Through crowdfunding, investment tranches are raised from several individual investors, who contribute with small amounts each
- Donation base crowdfunding, herein individuals provide funding based on philanthropic motivations without expecting any financial or material return
- Reward-based crowdfunding, backers provide small monetary contributions in exchange of something physical (e.g. early editions of new products or product reward) or emotional (e.g. thank-you note)
- Loan-based crowdfunding, individuals supply small amounts expecting to be reimbursed after a given period, generally with interest rates, without the involvement of traditional financial intermediaries
- Equity-based crowdfunding, investors purchase the equity of a company or enter into some sort of profit-sharing agreement with a company or organization