For years, there has been ambiguity on the treatment of single-member U.S. LLCs (disregarded entities) in Portugal. A new ruling clarifies how such income should normally be treated. 

U.S. LLCs are the most common entities for trading in the world. Many people who moved to Portugal use LLCs for trading.

For many years, there has been some ambiguity how such income should be treated. The tax authorities issued some rulings that related to U.S. LLCs that are taxed as partnerships or corporation, but until now, there has been no clear guidance with regards to single-member LLCs, perhaps the most common ones.

Many LLC owners have been taking advantage of what seemed as a grey area, adopting an interpretation that treated income from such entities as profits from a foreign business, combing this enterpretation with the NHR scheme, leading to an outcome of no tax in Portugal (and often, nowhere). 

The ambiguity has now mostly ended. In a ruling released at the end of July 2026, a payment into a single-member LLC has been considered. The findings of the ruling are applicable to the treatment of such entities. 

This ruling represents a dramatic shift in the risk profile of using single-member LLCs and may lead many entrepreneurs and business owners to reconsider their structure. 

If you are a member of a U.S. LLC or are considering setting one up in Portugal, this webinar is essential for understanding the legal treatment of LLCs and your reporting requirements in Portugal. 

Join FRESH as we break down the ruling and discuss the treatment of LLCs in Portugal

In this session, we’ll explore: