The cross-border mobility of companies, enshrined in the freedom of establishment under Articles 49 and 54 TFEU, is increasingly significant within the internal market. In this context, Portugal has become a key destination for international groups, due to its stable legal environment and competitive tax framework.
In terms of company law, the transfer of European holding companies falls under the mechanism of cross-border conversion, governed by Directive (EU) 2019/2121 and transposed into Portuguese law by Decree-Law No. 114-D/2023. This mechanism allows a company to:
- Change its legal form and jurisdiction without winding up or liquidation;
- Preserve the continuity of its legal personality.
The procedure is subject to strict formal requirements, including:
- The preparation of a conversion plan;
- The drafting of reports for shareholders and employees;
- The involvement of an independent expert;
- A double legality check by the competent authorities of the relevant Member States.
From a tax perspective, the transfer of a holding company to Portugal results in a change of tax residence and the application of Portuguese corporate income tax (IRC). The company becomes taxable in Portugal on its worldwide income, subject to applicable tax treaties, with the possibility of deferred taxation of unrealised capital gains under certain conditions.
The Portuguese corporate tax regime remains highly attractive for holding structures:
- 19% corporate tax rate in 2026;
- 18% in 2027;
- 17% in 2028.
This attractiveness is further reinforced by the participation exemption regime, which may exempt, under certain conditions, dividends and capital gains on qualifying shareholdings.
16 March 2026
By Rogério Fernandes Ferreira & Romy Alfredo Bouery (French Desk) – RFF Lawyers, Lisbon (Portugal)
