Many entrepreneurs consider setting up a sole trader in Portugal
when they first decide to open a business or provide services in a self-employment manner.
The sole trader in Portugal is the business form that enjoys the lowest level of taxation, accounting and reporting requirements but also one that has greater liability for its founder.
One of our lawyers in Portugal
can help you if you want to work as a sole trader in the country. Seeking professional advice is a good first step for all those investors who want to understand the rights and liabilities when they are their own employers.
The characteristics of the sole trader in Portugal
The sole trader is the simplest business form and also the one with the lowest level of protection for the founder. The entrepreneur is liable for the debts and obligations of the sole proprietorship in Portugal and the liability extends to the private assets. Sole traders are registered for tax purposes with the Portuguese authorities.
Entrepreneurs who wish to work as self-employed individuals should have the proper qualifications and certificates for their business. Moreover, for foreign sole traders
, these must be recognized in Portugal.
Taxes for sole traders in Portugal
The taxation regime
for sole traders is referred to as the Simplified category B Regime (Self Employment) and it is an alternative to the traditional profit/loss assessment. Small businesses in Portugal can thus simplify the record keeping practices and reduce taxes. The low tax regime applies for those entrepreneurs who record an annual turnover below 200,000. One of our attorneys in Portugal
can help you with information on the eligibility criteria for the simplified taxation regime.
Sole traders that have a successful business venture and wish to expand can do so by converting the sole trader into a private limited liability company, following a set of rules and criteria for company incorporation. One of the experts at our law firm in Portugal can help you if you want to take this step.