Company act in Portugal is based on the Portuguese Commercial Code, Decree Law 262/86 of 2nd September 1986. All companies in Portugal fall under the regulations of the above mentioned law. It is needless to say that for companies with the head office in Portugal, the rules apply according to company act in Portugal, while companies that activate in Portugal but have their head office abroad are only subject to company law after one year of commercial activity.
The Company Act in Portugal mentions several types of companies. Private limited companies, public companies, general and limited partnerships, as well as companies with a single shareholder are mentioned in the Portuguese Commercial Code, each of them with the specific requirements and regulations regarding structure and organization.
The Company Act in Portugal goes hand in hand with the Labour Law in Portugal. The Labour Code amended by the Law 7/2009 is responsible for every aspect regarding employment issues. Employment contracts can either be made in written or not. It is mandatory to write and sign an employment contract only for determined period contracts. Responsibilities and rights are mentioned in the Labour Code for both employers and employees, as well as certain specifications on their professional relationship. Foreign employees in Portugal must obtain a work permit and afterwards they have the same rights as Portuguese nationals.
All entrepreneurs who set up a company in Portugal must be aware of the regulations of the Company Act in Portugal, even foreign investors. This way, it will be easier to observe the rules and keep the company’s activities legal.