General Overview on Company Incorporation Portugal
Company formation in Portugal requires completing some actions before the company is ready to begin its activity. It is necessary for a new company started in Portugal to draft the articles of association and all other documents such as passport copies, specimen signatures and special forms from the company registration office. Some public notary procedures also must be taken care of, as well as finding a registered office for company registration in Portugal. An accountant and a bank account are mandatory for company formation in Portugal.
TYPES OF BUSINESS ENTITIES IN PORTUGAL
In order to incorporate a small or medium business with little capital and a liability limited by the contribution to the capital, the investors are advised to incorporate a Private Limited Company (Sociedade por Quotas - LDA) in Portugal. The LDA must be established by at least two founders with a minimum share capital of 5,000 EUR. All the shareholders must bring a contribution to the capital and their liability is limited by that contribution. The management is assured by a director appointed by the general meeting of the shareholders, the supreme authority in the Portuguese LDA
If the founders have a high amount of capital and which to have a company where this capital can be increased without problems can incorporate a Public Company (SociedadeAnónima - SA) which is a form of large company elected by the investor who can provide a minimum share capital of 50,000 EUR. At least five shareholders are necessary to incorporate this type of business and their liability is limited by the contribution to the capital. In this type of Portuguese business, the management is assured by a board of directors which is supervised by a Supervisory board, both invested by the general meeting of the shareholders.
Forms of business with small investments. The Limited Partnership (SociedadeemComandita - SC) is formed by at least two partners, at least one must be general and have full liability for the company’s obligations (SociosComanditarias), while the other one must have limited liability and must deliver capital to the partnership(SociosComanditados).
A General Partnership (Sociedadeem Nome Collectivo - SNC) has also two partners but only with full liability. They are equally responsible for making decisions in the name of the entity and can manage the company. No minimum share capital is necessary for this type of business.
Another form of business established with no requirements for share capital is the Company with a Single Shareholder (EIRL). The founder of such company is liable with his own personal assets for the entity’s debts.
INCORPORATION PROCEDURE IN PORTUGAL
It is mandatory that the name of the newly formed company in Portugal is checked at the National Registry of Collective Entities (Registro Nacional de Pessoas Colectivas, RNPC). If the name is available it can be reserved for a period of 48 h if a fee is paid. Also a preapproved name can be elected from the RNPC data base.
In order to obtain a certificate of registration, the founders of an entity must submit an application followed by the articles of association and the certificate of the name approval but no later than 15 days from the incorporation. When receiving the above, the one-stop shop will deliver the corporate tax number, the company's Social Security number and the declaration of commencement of business activities.
The entity’s employees must be registered at the Centros de Formalidades das Empresas or at the Business Registry Offices 24 hours before they start their activity or 10 days latest after the declaration of starting the business.
The Labor Inspectorate must also be notified regarding its existence by providing the newly formed business name and tax number, a copy of the published announcement regarding the company incorporation, the company's activities and the headquarter address. The declaration of commencement of activities can be submitted at the one stop shop also and the Registry will deliver it to the Work Inspection Agency.
The registration for the employee’s accident compensation insurance is performed online at a private insurer and cannot cover the individual which don’t receives a salary.
ECONOMY OVERVIEW IN PORTUGAL
Portugal’s economy is mainly based on agriculture, tourism and trade. As a matter of fact, Portugal is an important partner in international trading. Besides, Portugal is well-known for its production of cork oak and olive oil.
Incentives are offered for foreign company formation in Portugal, such as the development of renewable energies, specifically solar energy. Moreover, foreign investors willing to start a company in Portugal can ask for help at the Agency for Investments and External Commerce in Portugal in order to find out more about the company formation in Portugal.
Foreign company formation in Portugal represents approximately 2.5% of the Gross Domestic Product over the past years. In 2008, the Bank of Portugal registered a sum of 31.9 million EUR from foreign investments in Portugal. The main investors in Portugal are Germany, UK, Spain, France and the Netherlands.