How does one proceed with company formation in Portugal? Portugal is presently a desirable jurisdiction for conducting business, and establishing a company there could be an excellent option!
If you already have a consolidated business plan, we can assist you by analysing it to make it more effective from a corporate and tax perspective.
Considering the preceding, and as a concise step-by-step guide to company formation in Portugal, we would emphasise the following:
The procedure for company formation in Portugal is quite simple, provided that the following information is specified at the outset:
- You may choose a limited liability company (the so-called sociedade por quotas), a stock corporation (sociedade anónima), or a holding company (abbreviated SGPS). Depending on the form or nature of the company, the respective articles of association must be modified to meet specific requirements, such as the appointment of mandatory statutory bodies.
Share capital and shareholders – there is no minimal share capital in Portugal (you can incorporate a company with a share capital of €1.00). As for stock corporations, the minimal share capital is 50,000.00 EUR.
- You may incorporate a sole shareholder company (though its shareholder cannot also be a sole shareholder company). The stages below provide an overview of establishing a company in Portugal (or Madeira Island).
So the initial stage will be to apply for the certificate of name approval:
This application is submitted via the RNPC’s website. One or more of the company’s future shareholders (or by a designated attorney or even a barrister) must apply for it. The shareholder is an individual from a foreign country and must have a Portuguese tax number, which can be easily obtained from the Portuguese tax office (in the case of an individual residing outside the EU, a fiscal representative residing in Portugal must also be appointed when applying for the fiscal number). If the shareholder is a corporation, it will also be required to obtain a tax identification number; the commercial registry’s central services will require a commercial certificate with a postponed expiration date.
In the application for the name approval certificate, the proposed name of preference for the company (three options are available), the social object (detailed list of activities) and respective economic activity codes (CAEs), as well as the municipality where the registered office will be located, will be specified.
The next step will be taken once the approval of the proposed specifications for the new company to incorporate has been obtained through a certificate of name approval that is effective for three months:
Formalise and prepare the incorporation act document
The shareholders, or their duly appointed attorneys, must organise and formalise the private document that incorporates the company (as per Decree-Law 76-A/2006, 26 March), which signatures must be legalised (and powers verified if executed by attorneys) by a public notary or by an attorney (authentication may also be required in some instances).
Articles of association must be described in the company’s incorporation act. Additionally, it should appoint the corporate body, namely the director(s). (metadata including full name, marital status, if married, marriage regime and spouse’s name, Portuguese tax number, and place of domicile must be provided).
In addition, the incorporation act should specify whether the director will be compensated for their position. Payment of monthly contributions is required (unless there is sufficient proof that the director is already enrolled in Portugal or abroad and contributing to a recognised jurisdiction, in which case an exemption may be applied). Even if unpaid, they must enrol in Portuguese social security.
Lastly, we recommend indicating in the document that the company’s share capital is to be wholly subscribed by the end of the year (at this stage, it is not possible to establish a bank account, which is a must-do step, either with a Portuguese bank or a bank in another EU country).
Registration of the organisation
With a valid certificate of name approval and incorporation act document that has been properly legalised, the next step is to present the company for registration.
However, additional documentation will be required by the commercial registry office:
- Declaration of acceptance for the position of director and explicit denial of any circumstances that could constitute an obstacle to assuming the role.
- A list identifying the ultimate beneficiary(s) per anti-money laundering regulations (Law 89/2017, 21 August).
- Acceptance declaration of Statutory Auditor – effective and replacement – (in the case of a publicly traded company where the appointment of an Audit Committee is required)
Congratulations! Your business is now incorporated, and you understand how to incorporate it in Portugal! Do not forget that there is a 15-day deadline for initiating activity with the tax authorities, registering the company, and enrolling the director with the social security system.
Once the above is concluded, you can open a bank account (either in Portugal or within the EU) and commence business operations.
Do not neglect that you can rely on the MCS integrated team for assistance with accounting, financial, administrative, and other issues.
This article is provided for informational purposes only and should not be construed as legal or other professional advice. If you have any queries, please feel free to contact us.
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