How to Start a US LLC From Portugal

One trap worth flagging specifically for founders who hold or held Portugal's old Non-Habitual Resident status, or its narrower IFICI successor that launched in 2024: these regimes exempt much of a resident's foreign-source income from Portuguese tax, and it's tempting to assume that exemption automatically covers a foreign LLC's profits too. It doesn't necessarily. If your US LLC independently qualifies as a CFC under the ownership, low-tax, and passive-income tests above, Portugal's CFC rules can override the NHR or IFICI exemption and impute the LLC's income to you anyway, since CFC imputation and the personal foreign-income exemption operate as separate legal mechanisms rather than one automatically covering the other. Founders relying on NHR or IFICI status shouldn't assume their US LLC is exempt from Portuguese tax without confirming the CFC analysis separately.

Portugal and the US have had a comprehensive income tax treaty in force since December 1995, covering dividends, interest, royalties, and residency tie-breaker rules for people both countries might otherwise claim as tax residents. In practice, the treaty and Portugal's domestic foreign tax credit matter less for a typical single-member LLC than their existence might suggest, since a non-resident-alien-owned LLC earning non-US-source income usually owes $0 US federal tax to begin with, leaving little for either mechanism to actually offset. The treaty's practical relevance grows once the LLC scales into US-source income, or once Portugal's CFC rules actually impute a portion of the LLC's profit to the founder.

Putting it together: form the LLC (Wyoming and Delaware remain the two most common choices), get the EIN using the international applicant line above, open a Mercury or Relay account without either restricting Portugal, and confirm with a Portuguese accountant whether your LLC's income falls into the CFC regime's more limited passive-income list, especially if you hold NHR or IFICI status and might otherwise assume your foreign income is automatically covered. Portugal's version of the passive-income test is more forgiving for consulting-style businesses than Poland's, but the underlying mechanics, ownership plus an almost-automatic low-tax test plus a passive-income threshold, work the same way.

Portugal's CFC rules apply when a Portuguese tax resident directly or indirectly controls at least 25% of a foreign entity's capital, voting rights, or income rights (a threshold that drops to 10% if Portuguese residents collectively hold 50% or more), a single-member LLC's 100% owner clears the 25% bar immediately. Ownership alone doesn't trigger CFC status, though. Two further conditions have to be met together: the foreign entity's effective tax rate must be below 50% of the standard Portuguese corporate tax rate, roughly 9.5%, and more than 25% of the entity's profits must come from a specific list of passive income categories. If both conditions are satisfied, the LLC's undistributed profit gets imputed to the Portuguese owner and taxed as if earned directly, with a later deduction available when profits are actually distributed to avoid double taxation.

Portugal's growing digital-nomad and remote-work community, plus a wave of Portuguese founders building SaaS products and e-commerce stores for international clients, has made a US LLC a common structure for accessing US-based payment infrastructure. For these founders, a US LLC offers direct Stripe and PayPal access as a genuine US entity, USD invoicing that avoids euro conversion friction on US client payments, and a formation process considerably simpler than a Portuguese Lda. built specifically to serve global clients. Founders who moved to Portugal expecting the famous Non-Habitual Resident tax benefits should know that regime closed to new applicants at the end of 2024, replaced by a much narrower program, and that even favorable personal tax status doesn't automatically shield a US LLC from Portugal's controlled foreign company rules.

On the funding side, Portugal's EU membership means the euro moves freely with no capital controls, no remittance caps, and no central-bank registration requirement for investing in a foreign company. Funding a US LLC from Portugal is a standard international bank transfer with no special approval process required, a meaningfully simpler starting point than several countries covered elsewhere in this series that impose formal registration or quota systems on outbound personal investment.

Getting an EIN as a Portuguese founder works exactly like it does for any other non-US resident. Without a US Social Security Number or ITIN, you can't use the IRS's online EIN application — you'll file Form SS-4 and either call the IRS's international applicant line (267-941-1099, staffed 6am-11pm ET, for international applicants only) to receive the EIN over the phone, or fax the SS-4 (855-215-1627 from within the US, 304-707-9471 from outside) for a roughly 4-business-day official turnaround that often takes 1-2 weeks in practice. Mailing to Cincinnati, OH takes 4-5 weeks and should be a last resort. On Line 7b, write 'Foreign' or 'N/A' rather than leaving it blank. The responsible party listed must be the actual Portuguese owner, not EasyBrise or any formation agent. If you lose your CP 575 confirmation notice, request Form 147C, a letter, not a duplicate, instead. Don't skip Form 5472 plus a pro forma 1120 each year; the penalty for missing it starts at $25,000.

On the banking side, Portugal is not on Mercury's or Relay's prohibited-country list, and Portuguese founders go through the same standard non-resident application process, passport, LLC formation documents, and EIN, as founders from most other countries in this series. There's no distinct Portugal-specific hurdle at the account-opening stage; the genuine complexity for Portuguese founders sits in the CFC passive-income classification question above, not in getting a US bank account.

Portugal's CFC rules include an exemption for entities resident in another EU country or an EEA member state bound by tax-cooperation agreements with Portugal, provided there are valid economic reasons for the entity's existence and it carries out genuine agricultural, commercial, industrial, or service activity supported by real staff, equipment, and premises. As with Poland's equivalent exemption, this specific safe harbor doesn't extend to entities outside the EU/EEA, a US LLC, however substantively operated, doesn't qualify simply because the US isn't a member state. The practical route out of CFC exposure for a Portuguese founder's US LLC is staying under the 25% passive-income threshold, not demonstrating genuine US business activity the way an EU-resident subsidiary could.

The low-tax condition is, in practice, nearly automatic for a typical single-member LLC. A non-resident-alien-owned LLC earning non-US-source income usually pays $0 US federal tax, and $0 is always below the roughly 9.5% threshold Portugal uses. This means the 'the US isn't a low-tax country' reassurance that works in some other countries' CFC tests doesn't apply here, Portugal isn't asking whether the US in general is low-tax, it's asking what your specific LLC actually paid, compared to a fixed fraction of Portugal's own rate. The condition doing the real protective work is therefore the 25% passive-income threshold, not the tax-rate comparison. This mirrors the same underlying logic seen in Turkey's and Poland's CFC tests elsewhere in this series, even though the specific percentages and mechanics differ.

Here's where Portugal's version of the passive-income test is genuinely more forgiving than Poland's, covered elsewhere in this series: Portugal's list is limited to royalties and IP income, dividends and capital gains from shares, financial leasing income, insurance and banking income, and income from invoicing companies with limited real activity. General advisory, consulting, accounting, management, or data-processing service fees, the categories Poland explicitly added to its own passive-income list in 2022, are not on Portugal's list at all. This means a Portuguese founder's consulting LLC is far less likely to trip the 25% threshold than a Polish founder's equivalent business would be under Poland's broader definition. SaaS subscription revenue and e-commerce sales stay comfortably outside the passive-income calculation here too, as they do in most countries covered in this series.