Are you wondering what the steps are to open a business in Portugal? With its favourable business environment and strategic location, Portugal has become an attractive jurisdiction for entrepreneurs and investors. Establishing a company in Portugal (or Madeira) can be straightforward if you follow the proper steps. This guide will walk you through the steps to opening a business in Portugal, from choosing the right business type to registering your company and initiating your business activities.
Steps to opening a business in Portugal?
Choosing the Right Business Type
The first step in setting up a company in Portugal is to determine the type of business entity you want to establish. Portugal offers various options, including limited liability companies (sociedade por quotas), stock companies (sociedade anónima), and holding companies (SGPS). Each type of company has specific requirements that need to be met, such as the appointment of mandatory statutory bodies. Depending on your business plan and goals, you should carefully consider which type of company suits your needs best.
Define Share Capital and Shareholders
In Portugal, no minimum share capital is required to incorporate a company. You can even establish a company with a share capital of just EUR 1. However, if you set up a stock company, the minimum share capital is EUR 50,000. It’s essential to determine the amount of share capital you want to invest in your company and identify the shareholders who will contribute to the capital. Portugal allows for sole shareholder companies, but keep in mind that a sole shareholder cannot be another sole shareholder company.
Applying for the Certificate of Name Approval
Before incorporating your company, you must apply for a certificate of name approval. This can be done online through the RNPC (Registro Nacional de Pessoas Coletivas) website. The application should be submitted by one of the future shareholders or their appointed attorney. If the shareholder is an individual from a foreign country, they should have a Portuguese tax number, which can be obtained from the Portuguese tax office. In the case of a corporation shareholder, a commercial certificate will also be required.
In the application for the certificate of name approval, you will need to provide the proposed name for your company, along with a detailed list of activities (social object) and the corresponding economic activity codes (CAEs). You should also indicate the municipality where your company’s registered office will be located. Once you receive the approval, the certificate will be valid for three months.
Prepare and Formalize the Incorporation Act Document
The next step is to prepare and formalize the Incorporation Act document. This document will serve as the legal basis for incorporating your company. The shareholders or their appointed attorneys should organize and formalize the private document, including the company’s articles of association. It should also appoint the corporate body or bodies, such as the director(s), and provide their details, including full name, marital status, Portuguese tax number, and residence.
It is advisable to specify in the incorporation act whether the director(s) will be reimbursed for their role. If remuneration is expected, monthly contributions must be paid to the Portuguese social security system. However, an exemption may be applied if the director(s) is already enrolled in Portugal or abroad and making payments to a recognized jurisdiction. The incorporation act should also state that the company’s share capital will be fully subscribed by a specific date.
Registering the Company
You are ready to register your company with the certificate of name approval and the properly formalized incorporation act document. The registration process involves submitting the necessary documents to the commercial registry office. In addition to the certificate of name approval and the incorporation act, you must provide a declaration accepting the director’s office and confirming the absence of any circumstances that may hinder the occupation of the position.
Furthermore, you must submit a list indicating the ultimate beneficiary or beneficiaries of the company, as required by anti-money laundering regulations. If you are setting up a stock company, you must also include an acceptance declaration from the statutory auditor and substitute auditor, if applicable. Once you have submitted all the required documents, your company will be officially registered.
Initiating Business Activities
Congratulations! Your company is now incorporated, and you are ready to start your business activities in Portugal. However, keep in mind that you have 15 days to initiate your business activities, register your company with the tax services, and enrol the director(s) with the social security system. Complying with these requirements is important to ensure that your business operates legally and smoothly in Portugal.
Opening a Bank Account
To facilitate your business operations, opening a bank account for your company is essential. You can choose to open an account with a Portuguese bank or with a foreign EU bank. A bank account will enable you to receive and make payments, manage your finances, and comply with financial reporting obligations. It is advisable to consult with a financial advisor or banking professional to determine the best banking options for your company’s needs.
Additional Services and Assistance
Opening a business in Portugal involves various legal, financial, and administrative aspects. You may seek assistance from professional service providers to ensure you navigate the process smoothly and efficiently. Companies like MCS offer integrated corporate services, including accounting, tax, and administrative support. Their experienced team can analyze your business plan, optimize it from a corporate and tax perspective, and provide guidance throughout the incorporation process and beyond.
Conclusion
Opening a business in Portugal can be rewarding, thanks to the country’s favourable business environment and strategic location. By following the steps to opening a business outlined in this article, you can confidently navigate the process of setting up a company in Portugal. Remember to choose the right business type, define your share capital and shareholders, apply for the certificate of name approval, prepare and formalize the incorporation act document, register your company, and initiate your business activities within the designated timeframe. Seeking professional assistance from reputable corporate service providers can also ensure a smooth and successful incorporation process. Start your entrepreneurial journey by opening a business in Portugal and unlock the opportunities this dynamic and vibrant country offers.
This article on steps to opening a business is provided for general information and should not be construed as legal or professional advice. Consult with a qualified professional for personalized guidance tailored to your specific situation.
The founding of Madeira Corporate Services dates back to 1995. MCS started as a corporate service provider in the Madeira International Business Center and rapidly became a leading management company… Read more
