The west London club are looking to fill the vacancy created by the sacking of Carlo Ancelotti at the end of last season and speculation suggests they have targeted Villas-Boas, who led Porto to the domestic double and Europa League success last term.
The 33-year-old has a clause in his contract which allows him to move clubs should a release fee of 15million euros (£13.2m) be met.
Porto president Pinta da Costa admitted the club were powerless to prevent him from leaving should certain financial conditions be met.
He said: "Villas-Boas has a contract and a clause of 15million euros.
"If someone deposits 15million euros into our account and he wants to go, we can not do anything because it is something that is contractually specified."