Portugal or Cyprus: where should your business be based?
The two share an index score of 79. Which suits you depends on where the owners live, what the company is for and how it will be run.
Pillar by pillar
Doing business, side by side
Tax
IRC is 19% for 2026, falling to 18% in 2027 and 17% from 2028. Small and medium companies pay 15% on the first €50,000. A municipal surcharge of up to 1.5% and a state surcharge of 3% to 9% on profit above €1.5 million can apply. VAT is 23% on the mainland.
Corporate income tax rose from 12.5% to 15% on 1 January 2026. VAT is 19%, and deemed dividend distribution no longer applies to profits after 2025.
Set-up
Empresa na Hora forms a company the same day at a registry counter for €360, with all partners present. Empresa Online costs €220 with pre-approved articles. Minimum capital is €1 per quota holder.
Online registration costs €165 and name approval €10, with a lawyer signing the application. The annual return costs €20, and no minimum capital applies.
On the ground
A company needs a registered office in Portugal and a certified accountant (contabilista certificado). Directors need not be resident, but each partner and director needs a Portuguese tax number (NIF).
A company needs a registered office in Cyprus, which cannot be a mailbox, at least one director and a company secretary.
Ownership
Since November 2025 the RCBE beneficial ownership register is open online only to those who show a legitimate interest, and every access is logged for five years. The declaration is due within 30 days of formation.
Public access to the beneficial ownership register was suspended on 28 November 2022. Companies must confirm their beneficial owners each year.
Residence
An owner can apply for a D2 entrepreneur visa through a Portuguese company. The Golden Visa remains from €500,000 in a qualifying fund, but real estate no longer qualifies. Remote workers earning €3,680 a month can use the D8.
A foreign-owned company whose beneficial owner invests €200,000 can register with the Business Facilitation Unit, giving its staff access to permits.
Living and working
Currency
Euro.
Euro.
Time zone
UTC+0, or UTC+1 in summer, on the mainland and Madeira.
UTC+2, or UTC+3 in summer.
Personal tax
Progressive IRS rates reach 48% on taxable income above €86,634 in 2026, plus a solidarity surcharge of 2.5% above €80,000 and 5% above €250,000. Gains on shares are usually taxed at a flat 28%.
Top rate 35% on income of €72,001 and above from 2026. A 20% capital gains tax applies only to Cyprus property; no inheritance tax.
Flights
Lisbon Humberto Delgado airport serves about 151 destinations in 52 countries and handled 36.1 million passengers in 2025.
Larnaka and Pafos airports served 165 destinations in 42 countries in August 2026; Larnaka handled 9.91 million passengers in 2025.
Language
Greek and Turkish are the official languages and are used in the courts. Most people speak another language, usually English.
Portugal vs Cyprus: common questions
Portugal: IRC is 19% for 2026, falling to 18% in 2027 and 17% from 2028. Small and medium companies pay 15% on the first €50,000. A municipal surcharge of up to 1.5% and a state surcharge of 3% to 9% on profit above €1.5 million can apply. VAT is 23% on the mainland. Cyprus: Corporate income tax rose from 12.5% to 15% on 1 January 2026. VAT is 19%, and deemed dividend distribution no longer applies to profits after 2025.
Portugal: Empresa na Hora forms a company the same day at a registry counter for €360, with all partners present. Empresa Online costs €220 with pre-approved articles. Minimum capital is €1 per quota holder. Cyprus: Online registration costs €165 and name approval €10, with a lawyer signing the application. The annual return costs €20, and no minimum capital applies.
Portugal: A company needs a registered office in Portugal and a certified accountant (contabilista certificado). Directors need not be resident, but each partner and director needs a Portuguese tax number (NIF). Cyprus: A company needs a registered office in Cyprus, which cannot be a mailbox, at least one director and a company secretary.
Portugal: Since November 2025 the RCBE beneficial ownership register is open online only to those who show a legitimate interest, and every access is logged for five years. The declaration is due within 30 days of formation. Cyprus: Public access to the beneficial ownership register was suspended on 28 November 2022. Companies must confirm their beneficial owners each year.
Portugal: An owner can apply for a D2 entrepreneur visa through a Portuguese company. The Golden Visa remains from €500,000 in a qualifying fund, but real estate no longer qualifies. Remote workers earning €3,680 a month can use the D8. Cyprus: A foreign-owned company whose beneficial owner invests €200,000 can register with the Business Facilitation Unit, giving its staff access to permits.
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