Opening a branch in Portugal is an easy process and can be completed in a few days. Even though the foreign company is fully liable for its actions, it is considered an advantageous form of business, especially from the financial point of view.
There is no need to subscribe a minimum share capital at registration of the Portuguese branch and the invested capital comes only from the parent company. The assets are also provided by the foreign company and, if an authority asks the branch to present a list with its assets, all the properties of the foreign company must be included.
The major decisions of a branch, especially related to acquiring assets and shares, must receive the confirmation from the parent company.
Other request is to register the foreign company’s balance sheet and statements of losses and profits every year at the Portuguese Commercial Registry. The financial statements of the branch are kept separately and must be deposited every year.
If the country of origin has signed double tax treaties with Portugal, special incentives may be applied to the branch’s incomes, for example the reduction or exemption of the withholding taxes on dividends, interests and royalties or the refunding of the corporate taxes.
For this, the branch established in Portugal must bring evidence that those taxes are already paid in the country of origin.
A Portuguese branch has the same treatment as a local company so the registration in the Commercial Registry is mandatory, with specific documents, different from the ones submitted by the national companies.
A branch opened in Portugal must bring evidence that the foreign company exists in another country and submit its certificate of registration. The articles of association are also required. A list with the members of the management board and supervisory board must be presented at registration, if available.
Other necessary information are:
All the above must be written in Portuguese or accompanied by a Portuguese official translation.
The registration at Commercial Registry has as result the issuing of the certificate of registration, the tax number, the VAT and the statistical number.
Other requirements that a branch must fulfill before starting to operate business in Portugal is to register at the Social Security Regional Center, the Labor Inspectorate, and at a private insurer for the workmen’s accident compensation insurance.