Company types in Portugal: ENI, Unipessoal Lda, Lda, and SA compared

When I registered as a freelancer in Portugal, nobody told me I was setting up something called an ENI. I opened my activity at the Finanças portal, got a receipt, and started issuing recibos verdes. The ENI part was a legal consequence of that, not a separate choice.

Most solo entrepreneurs start the same way. The question of company structure only surfaces later, usually when revenue grows and someone mentions that a Unipessoal Lda might be more efficient. By that point, it helps to understand all four main business structures (tipos de sociedades) in Portugal before making any change.

The four main structures at a glance

ENI (empresário em nome individual) is the default for freelancers. You trade in your own name. There is no separate legal entity: your personal and business finances are one. If a debt or legal claim arises from your business activity, your personal assets are exposed. You pay IRS under the regime simplificado, where 75% of your professional services income is taxable (the assumed 25% expense deduction requires no documentation below the 15% proof threshold). Social Security contributions run at 21.4% quarterly on your declared income.

No accountant is required below the VAT threshold. No corporate accounts to file. No decisions that need to be formally recorded. The structure is thin because the friction is low.

Unipessoal Lda has one owner and limited liability. The company is a separate legal entity. If a claim arises, the company's assets are in scope, not yours personally (with standard exceptions for fraud and negligence). Minimum share capital is one euro, though starting with a meaningful amount is sensible in practice.

The company pays IRC (corporate income tax) rather than IRS. As gerente (company director), you draw a salary and pay IRS on that, and can also distribute profits as dividends. A certified accountant (contabilista certificado) is legally required. You must register as gerente with Social Security and pay a minimum contribution even on a zero salary. The company also needs to record its decisions in a livro de atas, a book of minutes covering matters like salary decisions, profit distribution, and approval of annual accounts.

Lda (sociedade por quotas) is structurally identical to Unipessoal Lda but with two or more owners. Capital is divided into quotas (sociedade por quotas) rather than shares. Adding a partner later means either transferring part of your quota or raising the company's capital for a new one, both of which typically require the other owners' consent. For a solo founder, there is no advantage over Unipessoal Lda.

SA (sociedade anónima) is the share company. Minimum capital €50,000. Shares are transferable. Designed for businesses taking on investors, with multiple ownership classes, or planning for an exit. A statutory auditor (revisor oficial de contas) is required. Most small businesses never reach this structure and never need to.

The real decision: ENI or Unipessoal Lda

For most solo entrepreneurs, this is the only structural question that matters in practice.

Liability is the cleaner argument for forming a Lda. If your work involves significant contracts, professional indemnity exposure, or clients who could sue over meaningful losses, putting a corporate wrapper around the business has real value. A consultant advising on major decisions, a developer whose code runs in production infrastructure, a freelancer working in regulated industries: these are cases where the separation between personal and business exposure matters. If your contracts are low-stakes and your client base is stable, the risk profile looks different.

Tax efficiency is more complicated than the headline rate comparison suggests. ENI under the regime simplificado is clean at lower revenue: 75% of service income taxable, no accountant required, quarterly Social Security and VAT declarations, annual IRS filing. As income grows, IRS progressive rates take a rising share. The standard IRC rate is lower than the top IRS brackets.

But the comparison is not just rate against rate. A Unipessoal Lda needs a certified accountant (typically €1,200 to €3,600 a year depending on complexity), Social Security as gerente even on a zero salary, annual corporate accounts filed with Finanças and the Conservatória, and more administrative overhead throughout the year. These costs reduce the headline tax saving. Most accountants suggest revisiting the question around €60,000 to €80,000 in revenue, but the right answer depends on your margin, how much you draw personally versus retain in the company, and what the IRC simplified regime (if you qualify) does to your effective rate.

Retained earnings are part of the calculation. If you do not need to draw all of your profit as personal income, money kept in the company is taxed at the corporate rate and not immediately at the personal IRS rate. At higher revenue, that deferral changes the effective tax comparison significantly.

One more thing rarely mentioned: a Unipessoal Lda changes the invoicing entity. The company invoices with its NIPC (company tax number) rather than your personal NIF. For some clients, particularly larger corporate ones, that is a positive signal about the relationship.

What Descodify handles

Descodify is built for the ENI case: freelancers issuing recibos verdes under the regime simplificado, with quarterly VAT and Social Security declarations and the annual IRS filing. The Lda path involves IRC returns, corporate accounting software, and a contabilista certificado who is legally required. Those are different tools for a different structure.

If you are on the ENI side and want to understand what the regime simplificado does to your tax calculation, the 15% expense proof rule for freelancers covers the mechanics in detail.