By Miguel Silva Reichinger Pinto Correia No Comments
Last Updated on October 22, 2020 by Miguel Silva Reichinger Pinto Correia
There are several ways one can open a company in Portugal, as the Portuguese Government aims at reducing bureaucracy for investors and as such it has implemented some quicker ways for investors to open a company.
In this blog post we will discussing the “traditional” procedure of opening a company Portugal, a procedure that is followed by most investors who at the time of incorporation cannot be present in country to perform all the required diligences or who prefer to have assurance of a legal team in dealing with the Portuguese bureaucracy.
Opening a company in Portugal (or Madeira) starts with the filing for the name approval certificate. The filing shall be done by one of the future company’s shareholders or by its legal representative and must clearly identify the company’s denomination, detailed corporate object (i.e. economic activities to be carried out by the company), and Portuguese address of the company’s registered office.
Application for the name approval certificate is usually completed online with the Institute of Registries and Notaries and once issued it is valid for a 3-month period as from its issuance date or renewal date.
For the name approval procedure, we recommend the shareholders suggest at least 6 different company names, in case the initial 3 are refused by the National Register of Legal Entities. A formal requirement, in case of name refusal, can be filed for with Institute of Registries and Notaries, however such procedure is time consuming and may include providing duly certified and translated documentation proving that shareholders have a solid claim for the name they have applied for.
Once obtained the company’s name approval certificate, shareholders wishing to open a company within the Madeira International Business Centre (MIBC) must submit a formal application (in Portuguese language) to Sociedade de Desenvolvimento da Madeira, the official concessionaire of the MIBC, in two copies, addressed to the member of the Regional Government of Madeira responsible for the MIBC in the name of an existing company, in Portugal or abroad, or of a company to be incorporated. All relevant information concerning the activity to be performed by the company must be included in the licence application, namely: company name and address; activity to be undertaken and corresponding NACE codes (European nomenclature of the economic activity); total value of the investment; foreseen number of full-time tax resident job posts to be created.
Once the document(s) mentioned above are produced, the opening of the company is formalized by means of the execution of the incorporation private act which will contain detailed information on the share capital, its shareholders, its directors, the binding rules, and the articles of association of the company. The grantors’ signatures (shareholder(s) or legal representative(s)) must be legally recognized, in the presence of a notary or a lawyer with express declaration of intent to open the company.
All shareholders and members of the corporate bodies must hold a Portuguese Taxpayer Identification Number (known as NIF) and those who are not EU-Residents must also appoint a tax representative in Portugal.
The opening of a company (and the appointment of the members of the corporate bodies) will then be subject to public accessible registration. Once opening of the company is concluded, an access code to the on-line commercial registry certificate of the company is generated by the Commercial Registry Office.
The opening of the company then becomes effective for operational activity and tax purposes (including VAT) by registering the company with the Portuguese Tax and Customs Authority (AT), done by filling specific forms with the Portuguese Tax and Customs Authority which must be signed by Certified Accountant (which all companies are obliged to have under bookkeeping rules and regulations) together with the company’s legal representatives. The deadline for such procedure is 15 days after registration with the Commercial Registry Office.
Registration of the company with the Portuguese Social Security must take place within 10 business days after filing the registration with the AT and by providing the following documents: commercial registry certificate; evidence of the commencement of activity for tax purposes; document appointing corporate bodies (incorporation document or relevant minutes of the competent corporate body’s resolution); and taxpayer number of members of corporate bodies.
Directors may be exempt from social security contributions in Portugal provided they present proof of social security contributions made in country of residence with which Portugal has entered a Social Security cooperation agreement.
Our multidisciplinary team of lawyers, economists and accountants has more than 20 years of experience and is able to provide you an integrated approach to your investment and relocation to Madeira Island by operating as one-stop-shop.
The founding of Madeira Corporate Services (MCS) dates back to 1995. MCS started as a private and corporate service provider in the Madeira International Business Center and rapidly became one of the leading management firms. As a result of its position in the market, the quality of the services it has been providing for over a decade and full compliance with business ethics, MCS was awarded the Merit Certificate by SDM – Sociedade de Desenvolvimento da Madeira.
auctor Lília Caldeira & Miguel Pinto-Correia Continue reading
By Miguel Silva Reichinger Pinto Correia No Comments
Last Updated on October 14, 2020 by Miguel Silva Reichinger Pinto Correia
Madeira Island, Portugal, is affirming itself as a tech hub for European and American entrepreneurs. The main reasons? Low taxation, good weather, fast internet connections (above European and American mainland averages) and a steady supply of high-skilled work force in the IT sector.
Taxation is one of the main reasons that hinder economic growth of a startup and finding the correct jurisdiction for your rising business can be troublesome. That is why Portugal has come up with a taxation business that is startup-friendly.
Madeira Island, is located 1h 30min by plane from Lisbon, as offers a 5% corporate rate on all income derived from profit with non-Portuguese companies, full exemption from withholding tax on dividend remittances from the Madeira, among other tax benefits.
The MIBC is a tax benefit scheme granted under the Portuguese Tax Benefits Statute and duly approved by the European Commission.
Since the MIBC is governed by Portuguese and European Law, it offers the required legal certainty to its investors. All companies duly licensed to operate within the MIBC comply with all legal requirements to operate in Portugal, and therefore in the EU.
Given the above, all e-commerce directives have been duly transposed into Portuguese law, including those relating to electronic billing, digital signatures and data protection.
Such facts make it clear that, in addition to being a completely transparent tax incentive, the MIBC also allows a for an effective tax saving that can be used in the internationalization of the licensed company.
In addition to all the above-mentioned benefits, companies that are duly licensed in the MIBC may cumulatively apply for European funding and other financial instruments available to companies based in the Autonomous Region of Madeira.
Apart from the above, employees of startup companies and other technological companies might also be entitled to a 20% flat rate on their salary for a period of 10-years and a 0% tax rate on the foreign income they earn. These incentives not only allow you easily bring your team to live in on the world’s most beautiful islands, but also to attract the best of the best worldwide.
Startups looking into expand their international business, have access to a skilled workforce (namely IT engineers), good and speedy internet connections should be looking into locating their business in Madeira Island, Portugal.
Madeira enjoys the existence of a modern dedicated building designed to host telecommunications and data equipment, such as Data Centres and Internet Service Providers, among others. The Data Centre offers: uninterrupted power supply; An intrusion and a fire detection systems; A specialised air conditioning system; Computerised access control system; redundant telecommunications network; and technical support by dedicated personnel.
Madeira is also a hub for several international optical submarine cables, operated by the Submarine Cable Station also hosted in the Data Centre. Such allows inter-connectivity with national and international SDH networks and providing significant advantages in terms of quality, cost, bandwidth and scalability.
The Internet Gateway provided by Marconi Internet Direct (MID), offers international Internet access with no kind of contention and using diversity in the access to international backbones. The IP platform has its international connectivity distributed by: 3 PoPs (London, Amsterdam and Paris); Peering connections with hundreds of major international ISPs; and IP transits to Europe and the USA.
Apart from the above mentioned unique characteristics, the Regional Government is keen in supporting tech companies in moving to Madeira, mainly through its Start Up Madeira and the Brava Valley project, where incubation facilities are available to start ups looking for island life and low taxation.
We know that bureaucracy and costs can slow down your vision and hinder your will to relocate to another jurisdiction, but we at MCS believe that Madeira Island, Portugal, holds the key to its growth. Continue reading