Setting up a Company in Portugal – Overview
Drafting articles of association alongside every other document such as copies of passports, special forms, and specimen signatures are requirements anyone applying to own a newly registered business in Portugal must have. The process also involves going through certain public notary procedures and completing all the paperwork required from the registered office that takes care of registering companies in Portugal. For any company formation process to go through in Portugal, it is mandatory to have a bank account plus an accountant. For a comprehensive and better understanding of this information and requirements, our specialist agents in charge of creating companies in Portugal are readily available to assist with full information and assistance.
The Process of Setting Up a Company in Portugal
Creating a public or private limited liability company in Portugal is easy to accomplish if you follow these steps:
Check if the business name is available and visit the Trade Register in Portugal for a reservation;
Assign a legal representative in Portugal to handle some of the procedures for your firm;
Apply for permits and licenses based on the firm’s activities;
Provide Articles of Association that have information on the owners, company activities, etc;
Complete tax-related and social contribution registration.
Types of companies
Limited liability firm
To be able to create a small or medium-sized business that requires a small amount of capital as well as a liability based on the contribution to their capital, owners of companies are recommended to create a private limited entity or company in Portugal referred to as sociedade por quotas (LDA). The establishment of the LDA must include a minimum of two founders that operate on at least a EUR 5,000 share capital. It is mandatory for every shareholder to provide their own contribution to the company’s capital and with their liability restricted to the contribution. It is shareholders’ general meeting, which is the overall authority in the Portuguese LDA, that appoints a director who takes care of the management.
The founders are free to bring a public company provided they have a significantly high capital to invest in the initiative. This type of public company, known as sociedade anonima (SA) refers to a category of large businesses that investors who provide at least a EUR 50,000 share capital create. It takes a minimum of five shareholders to establish this type of large company. Besides, their liability is restricted to the contribution they make to the capital. This category of business in Portugal requires that its board of directors assures the management. A supervisory board monitors this board of directors, and both of them are put there by the general meeting consisting of shareholders.
Referred to as sociedade em comandita (SC) in Portuguese, a limited partnership is formed by a minimum of two partners. A minimum of one is obligated to be general and with complete liability for the obligations of the company (socios comanditarias). On the other hand, the other one’s liability will be limited and must provide capital to their partnership (socios comanditados).
Translated as sociedade em nome collectivo comprises of two partners also and who have complete liabilities in the business. Both of the partners’ responsibilities also involve the right to make decisions in the company’s name and managing it too. This form of business does not require any minimum share capital.
Single shareholder company
One other type of business that does not require share capital to set up. The personal assets of the founder of this type of company are liable for the entity’s debts.
Checking to ensure that the newly created company’s name is there and with a corresponding status as recorded in the National Registry of Collective Entities translated as Registro Nacional de Pessoas Colectivas, RNPC is mandatory. In case the name is available, it gets reserved for 48 hours provided a required fee is paid. Besides, they can elect a pre-approved name from the database of RNPC.
Before the founders of any entity receive their company’s registration certificate , they are mandated to submit their application, articles of association as well as a name approval certificate. Submission of all these documents should be complete within 15 days, beginning from the date of incorporation. At the time of submission, the founders will, in return, receive the following from the Portuguese authority; corporate tax number, social security number of the entity as well as a declaration of commencement for the company’s activities. Another requirement is to go to the Business Registry Offices to register the employees of the entity 24 hours before the employees can start doing any company work or within a maximum of 10 days after the business is declared to have started.
In addition, you must report the existence of the firm to the Labor Inspectorate and provide the newly created business name, tax number, copy of the published statement declaring the incorporation of the company, the activities the company undertakes, and the address of its headquarters. When it comes to workers” injur compensation insurance registration, the process is done online and at any relable private insurer. The insurance is not designed to cover any individual who is not receiving a salary.
Would you require assistance in setting up a company in Portugal, please contact our specialists!