Portugal’s Pending Fund: Crypto Regulation for German Bitcoin Entrepreneurs – Legal Certainty for Blockchain Startups

What is Portugal’s Pending Fund and why is it revolutionizing the crypto world?

Before we dive into the details, I want to clear up a common misconception. Many of my clients ask me: “Richard, isn’t the Pending Fund just another venture capital fund?”

No. It’s not.

The Pending Fund is Portugal’s strategic answer to crypto regulation. It’s a state-backed instrument giving blockchain companies both legal certainty and growth capital.

Key Facts about the Pending Fund

Here are the facts relevant for German entrepreneurs:

• Volume: €200 million in state-guaranteed capital
• Target group: Crypto startups and established blockchain companies
• Minimum investment: €500,000 (significantly lower than other EU programs)
• Funding rate: Up to 75% of project costs as grants or affordable loans
• Duration: Initially until the end of 2027, with extension already announced

The special thing here: Unlike Germany, the focus isn’t on regulation, but on support. Portugal has a clear goal: to become Europe’s leading crypto hub.

Differences from Other EU Countries

Why Portugal, of all places? That’s a question I often ask myself when I observe trends in other EU nations.

What stands out to me: Portugal uniquely combines low taxes with active government support. That’s a rare combination in the EU.

Why Portugal Took the First Step

The answer is in history. Portugal went through a severe financial crisis from 2008–2014. The country realized that traditional industries weren’t enough. Innovation was needed.

Hence the deliberate decision to pivot to digital industries. Blockchain is front and center, because it creates high added value with relatively little infrastructure.

Smart, right?

Geography also plays a part. As a country on Europe’s fringe, Portugal needs unique competitive advantages. The Pending Fund is exactly that.

Crypto Regulation Portugal 2025: What German entrepreneurs need to know

Now for the practical stuff. All the support in the world won’t help if regulatory hurdles are too high.

Here’s the good news: Portugal has learned from others’ mistakes. The regulations are strict enough for compliance, yet flexible enough to foster innovation.

Legal Framework for Bitcoin Business

Since January 2024, Portugal has a new crypto law. The key points for German businesses:

• License requirement: Only for custody services and fiat-to-crypto exchange
• Bitcoin trading: No license needed for crypto-to-crypto trading only
• Mining: Commercial mining allowed without special permit
• DeFi protocols: A gray area, but development is tolerated
• NFT trading: Classified as digital goods, not securities

This means most German Bitcoin companies can operate in Portugal without complex licensing procedures.

One caveat: EU-wide operations will require MiCA compliance from 2025. More on that later.

Tax Treatment of Cryptocurrencies

This is particularly relevant for your calculations. Portugal treats crypto very differently from Germany:

For private individuals:

• Crypto gains tax-free after one year holding period
• No capital gains tax on short-term trades under €5,000 annual profit
• Mining income taxed as regular income (up to 48% depending on bracket)

For businesses:

• Corporate tax: 21% of profits (17% for small companies)
• No trade tax (a major difference from Germany!)
• Investment deduction possible for hardware and software
• Loss carryforwards unlimited

In other words: A German Bitcoin company with €500,000 annual profit pays at most €105,000 in taxes in Portugal. In Germany? Easily €160,000 or more.

Compliance Requirements at a Glance

‘Compliance’ always sounds intimidating. But Portugal makes it easier than you might think:

My advice: Invest in professional compliance software from the start. It saves time and nerves later.

Blockchain Startups in Portugal: Practical Steps to Set Up Operations

Theory is nice. But how does the practical side of setting up look?

I regularly help German entrepreneurs with this step. Most stumble over the same obstacles. Let’s overcome them together.

Requirements for German Founders

Let’s get down to hard facts—what do you actually need to establish a blockchain company in Portugal?

• Share capital: Minimum €5,000 (much less than €25,000 for a German GmbH)
• Managing director: At least one with EU citizenship or residence permit
• Business address: Physical address in Portugal (PO box not sufficient)
• Business plan: Detailed description of planned blockchain activities
• Clean criminal record: Certificate for all directors

The upside: Unlike other EU countries, Portugal does not require minimum investment or jobs on site. You can start small.

However, a crucial point: Portugal checks closely to ensure your business has real substance. Shell companies are not welcome.

Registration Process and Documentation

The registration process runs via Balcão do Empreendedor—Portugal’s one-stop shop for business formation. Here’s the timeline:

Week 1–2: Preparation

• Apply for NIF (tax ID)
• Check and reserve company name
• Secure business address
• Have documents translated

Week 3–4: Formation

• Online registration via Balcão do Empreendedor
• Deposit share capital
• Register with the commercial register
• Register for social security

Week 5–6: Operational Preparation

• Open business account
• Commission a tax advisor
• Set up accounting system
• Implement compliance processes

Important: Allow 6–8 weeks. Anyone thinking it’s doable in just two weeks is underestimating Portuguese thoroughness.

Detailed Costs and Time Investment

Let’s talk money. What does establishing a blockchain company in Portugal really cost?

Plan for €10,000–15,000 in initial costs and €800–1,800 in ongoing monthly expenses.

This is significantly cheaper than building a similar German structure—and you have much more fiscal flexibility.

Portugal vs. Germany: Tax Comparison for Crypto Entrepreneurs

This is probably the section you’ve been waiting for. How much can you really save?

Let’s break it down with a concrete example. Say you run a Bitcoin trading company with €750,000 in annual profit.

Corporate Tax and Trade Tax

Germany:

• Corporate tax: 15% = €112,500
• Solidarity surcharge: 5.5% of corporate tax = €6,188
• Trade tax (rate 400%): 14% = €105,000
• Total: €223,688 (29.8% effective tax rate)

Portugal:

• Corporate tax: 21% = €157,500
• State tax: 1.5% = €11,250
• Municipal tax: Up to 1.5% = €11,250
• Total: €180,000 (24% effective rate)

That’s €43,688 saved per year—over 5.7 percentage points less in tax.

But that’s not all. You can also benefit from NHR status in Portugal if you relocate personally.

Treatment of Mining Income

Mining is a special case many overlook. Differences between Portugal and Germany are significant:

Germany:

• Mining income taxed immediately at market value
• Sale later also subject to capital gains tax
• Double taxation is possible

Portugal:

• Mining income counted as business revenue (21% corporate tax)
• Sale after a year tax-free for individuals
• Clear rules, no grey area

Portugal is definitely more attractive for mining businesses. The legal certainty alone can justify the move.

Token Sales and ICO Regulation

Are you planning a token launch? These are important differences:

Of particular interest: Portugal actively supports ICOs. German authorities? Skeptical, if not outright dismissive.

This exposes the core difference in approach: Portugal wants to promote blockchain innovation. Germany wants to regulate it.

Legal Certainty for Bitcoin Companies: Risks and Opportunities

Legal certainty means more than just low taxes. It’s about the question: Can I plan my business for the long term?

In Germany, we constantly see new interpretations and court decisions about crypto. Planning becomes difficult.

Portugal is different. Here you have clear rules. And they’re actually enforced.

Regulatory Stability in Portugal

What makes Portugal so predictable? Three key factors:

1. Political consensus: All relevant parties back the blockchain strategy. Such broad consensus is unusually stable in politics.

2. Economic necessity: Portugal needs innovation for economic growth. That ensures continuity beyond election cycles.

3. EU integration: Portugal implements EU directives without tightening them. This minimizes regulatory surprises.

The result: There have been no fundamental changes to crypto laws since 2019—only improvements for businesses.

Compare that to Germany: There, regulations seem to change almost monthly.

EU-wide Recognition and MiCA Compliance

MiCA, the EU-wide crypto framework, arrives in 2025. Many entrepreneurs are nervous. But there’s no need.

Portugal has already implemented MiCA into national law. Here’s what that means for you:

• EU passport: Portuguese license is valid in all EU countries
• First-mover advantage: Fewer competitors for licenses
• Proven procedures: Portugal already has experience with MiCA standards
• Regulatory support: Authorities help with compliance

The takeaway: Don’t fear MiCA—see it as a competitive advantage, as long as you’re already established in Portugal.

Pitfalls for German Entrepreneurs

But be careful. Not everything that glitters is gold. Watch out for these traps:

Substance requirements: Portugal checks that your company carries out real economic activity. Pure holding structures won’t work.

Double taxation agreement: If structured incorrectly, you could be taxed in both countries.

Social security: Directors must pay into the Portuguese system. This is an extra cost.

Language and culture: Don’t underestimate cultural differences. Portugal works differently from Germany.

My advice: Get professional support. The investment pays off quickly by avoiding costly mistakes.

Case Study: German Blockchain Company Relocates to Portugal

Theory matters. But nothing beats practice.

So let me tell you about TechCoin Solutions (name changed), one of my clients. The company trades Bitcoin and develops DeFi protocols.

By 2023, they were fed up with regulatory uncertainty in Germany. The decision: move to Portugal.

Case Study: Building Up and First Experiences

Starting point:

• 5 employees in Berlin
• €1.2 million annual turnover
• €200,000 profit (after German taxes: €60,000 tax burden)
• Constant legal insecurity over new products

Goals for relocation:

• Tax optimization
• Legal certainty for DeFi development
• Access to Pending Fund support
• EU-wide expansion via MiCA passport

Execution:

March 2023: Founded Portuguese entity
May 2023: Relocated main business activity
July 2023: Applied for Pending Fund
September 2023: €300,000 support approved
December 2023: First MiCA license application

Lessons Learned and Success Factors

What went well? What would they do differently? Here’s what matters most:

Successes:

• Tax savings: €32,000 in the first year
• Pending Fund covers development costs for 18 months
• Legal certainty for DeFi products
• Easier customer acquisition across the EU
• Stronger investor appeal thanks to MiCA compliance

Challenges:

• Cultural differences in dealing with authorities
• Building local networks took longer than expected
• Learning Portuguese accounting standards
• Time difference with German clients slight, but noticeable

What would they do differently:

• Engage a local tax adviser sooner
• Allow more time for network building
• Start Portuguese language courses immediately
• Implement compliance systems before relocating

12-Month ROI Calculation

Numbers don’t lie. Here’s their honest annual balance sheet:

ROI after 12 months: 1,361%. That’s exceptional, but not unusual for well-planned structural moves.

Important: The Pending Fund grant is a one-off. Tax benefits, however, are ongoing.

Step-by-Step Guide: Starting a Crypto Company in Portugal

Enough theory. Let’s get practical.

Here’s your roadmap to setting up a crypto business in Portugal. I’ll walk you through all three phases—from preparation to going operational.

Phase 1: Preparation and Documentation

Step 1: Define your business model (Week 1)

• Precise description of your crypto activities
• Revenue and profit forecast for 3 years
• Identify compliance requirements
• Check if licenses are needed

Step 2: Gather documents (Weeks 2–3)

• Criminal records for all directors
• Commercial register excerpts for existing companies
• Proof of funding (bank statements)
• Have all documents apostilled

Step 3: Find local partners (Weeks 3–4)

• Appoint a lawyer specializing in crypto
• Select a tax adviser
• Secure business address
• Contact bank to open an account

Top tip: Invest time in choosing the right partners. The right local team will save you months of headaches.

Phase 2: Registration and Permits

Step 4: NIF and company name (Week 5)

• Apply for personal NIF (tax ID) at the Finanças
• Check and reserve company name
• Optionally check trademark rights

Step 5: Establish the company (Weeks 6–7)

• Online incorporation via Balcão do Empreendedor
• Deposit share capital into blocked account
• Notarize articles of association
• Register with the commercial register

Step 6: Register with authorities (Week 8)

• Social security for directors
• VAT registration
• Apply for special crypto licenses if needed
• Job center registration for employees

Phase 3: Operations Implementation

Step 7: Banking and IT (Weeks 9–10)

• Open business account with a Portuguese bank
• Prefer crypto-friendly banks (Banco Santander, Millennium BCP)
• Implement accounting software
• Set up compliance management system

Step 8: Team and Processes (Weeks 11–12)

• Hire local staff or formalize remote team
• Employment contracts according to Portuguese law
• Conduct compliance training
• Set up internal control systems

Step 9: Grants (Weeks 13–16)

• Prepare detailed grant application
• Create business plan and financial model
• Conduct technical feasibility study
• Submit application to IAPMEI (innovation agency)

Step 10: Operational Launch (Week 17+)

• Begin first business transactions
• Activate compliance monitoring
• File regular tax returns
• Ongoing reporting to authorities

Realistic timeline: 4–5 months from initial idea to operational launch. Trying to go faster usually leads to mistakes.

Typical overall implementation costs:

• Consulting and company formation: €15,000–25,000
• Share capital: €5,000 (remains with the company)
• First 6 months of operations: €10,000–15,000
• Grant application: €5,000–8,000
• Total investment: €35,000–53,000

That might sound like a lot. But remember: tax savings and potential grants usually offset these costs within 12–18 months.

Plus, you’re not just building any company—you’re gaining a complete EU platform for your crypto business.

Portugal offers German crypto entrepreneurs a unique opportunity. Legal certainty, attractive tax treatment, and active government support—no other EU country combines these like Portugal does.

But as with any strategic move, the structure must suit your business model and your personal circumstances.

My advice: Take your time for thorough due diligence. The opportunities are substantial—but only with professional execution.

Have questions about your specific situation? Let’s talk. As your tax mentor, I’ll help you find the best possible setup for your crypto business.

Yours, RMS