How can you start a business in Portugal? For various reasons, Portugal is now an attractive jurisdiction in which to conduct business, and creating a corporation might be a great idea!
If you currently have a consolidated business plan, we can help you analyze it to make it more effective from a corporate and tax standpoint.
Taking all of this into consideration, and as a quick step-by-step guide for forming a corporation under Portuguese law, we would emphasize the following:
The method for incorporating a business is relatively straightforward and quick, provided that the essential requirements are determined first:
Details on the firm’s structure – you can choose a limited liability company (sociedade por quotas), a stock company (sociedade anónima), or even a holding company (briefly named SGPS). Depending on the type/nature of the firm, the articles of association should be changed to meet specific needs, such as the appointment of obligatory statutory bodies.
Share capital and shareholders – there is no minimum share capital in Portugal (you may even incorporate a company with a share capital of EUR 1,00). The minimum share capital for a stock corporation is EUR 50.000,00.
You can form a lone shareholder firm ( in which case its shareholder may not be another sole shareholder company). The steps below describe how to establish a corporation in Portugal in general terms (or Madeira island).
So the first step will be to apply for the name approval certificate:
This application is submitted via the RNPC website. One of the company’s prospective shareholders should request it under the incorporation process (or by an appointed attorney or even by a lawyer). The shareholder is a foreign national who must have a Portuguese tax number, which is readily obtained from the Portuguese tax office (in case of an individual residing outside the EU, when applying for the fiscal number, a fiscal representative residing in Portugal should be appointed as well). If the shareholder is a company, it will also need to get a fiscal number: the commercial registration central services will require a commercial certificate that has been deferred.
The suggested name of choice for the business (three alternatives available), the social purpose (full list of activities), and relevant economic activity codes (CAEs) shall be provided in the application for the name approval certificate, as well as the municipality for the registered office.
Once the proposed details for the new business to incorporate have been approved through a certificate of name approval that is valid for three months, the following steps will be taken:
Prepare and formalize the paperwork containing the incorporation act.
The shareholders, or lawfully designated attorneys, must organize and formalize the private document that incorporates the business (as per Decree-Law 76-A/2006, March 26th), whose signatures must be legalized (and powers validated if signed by attorneys) by a public notary or a lawyer (authentication could also be required in some instances).
The articles of association of the company must be detailed in the incorporation legislation. It must also designate the corporate body(ies), namely the director (s). (Details such as complete name, marital status, if married, marriage regime and name of spouse, Portuguese tax number, and place of residence must be provided).
Furthermore, in the incorporation act, we propose specifying whether or not the director will be compensated for the position. The monthly contributions are due (unless sufficient evidence is that the director is already enrolled either in Portugal or abroad and making payments to a recognised jurisdiction, in which case exemption can be applied). Even if they have not paid, they must be enrolled in the Portuguese social security system.
Finally, we recommend declaring in the document that the company’s share capital is to be fully subscribed until the end of the fiscal year (at this point, it is not feasible to create a bank account, which is a to-do step, either with a Portuguese bank or with a foreign EU bank).
The incorporation of the business in Portugal
The next step is to bring the firm to registration with the legitimate certificate of name approval and correctly legalised incorporation act document.
Regardless, the business register office will want the following documents:
Acceptance statement for the office of director and unambiguous declaration of the absence of any conditions that might impede the charge’s occupancy;
List reflecting the ultimate beneficiary(ies) under the anti-money laundering rules in effect (Law 89/2017, 21st August).
Statutory Auditor Acceptance Declaration – Effective and Substitute – (in case of a stock company where the appointment of an Audit Committee is mandatory)
Congratulations! You have started your business in Portugal!
Remember that there is a 15-day limit to begin the activity with the tax services, as well as to register the firm and enroll the director in the social security system.
You can now open a bank account (in Portugal or elsewhere in the EU) and begin your company operations.
Remember that you may rely on the MCS integrated team to support your business in Portugal with accounting, fiscal, administrative, or other issues!
This material is meant for general information purposes only and should not be interpreted as legal or professional advice of any sort. Please do not hesitate to contact us if you have any queries.