Opening a branch in Portugal is not a complex procedure and such an entity can be completed in just a few days. Even though the foreign company is fully liable for its actions, it is considered an advantageous form of business, particularly from the financial point of view. Our company formation specialists in Portugal are at your service if you would like to know the requirements for opening a branch in this country, plus details about the tax structure.
Do I need a minimum share capital for opening a branch in Portugal?
There is no need to subscribe a minimum share capital at registration of the Portuguese branch. It is good to know that the invested capital comes only from the parent company. The assets are also provided by the parent company and, if an authority asks the branch to present a list with its assets, all the properties of the foreign company will have to be included. The major decisions of a branch, especially related to acquiring assets and shares, must receive the confirmation from the overseas company.
What are the requirements for branches in Portugal?
A branch needs 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 on a yearly basis. 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 foreign country. Here are a few facts to consider when opening a branch in this country:
- A branch in Portugal has the same treatment as a local company so the registration in the Commercial Registry is compulsory, with specific documents, different from the ones submitted by the national companies.
- A branch opened in Portugal must bring evidence that the foreign company is established in another country.
- The Articles of Association and the certificate of registration of the company abroad are also required.
- The list with the members of the management board and supervisory board must be presented at registration, if available.
Necessary information when registering a branch in Portugal
A branch in Portugal
can run under the rules of a limited liability company
or as a joint stock company, providing the following information:
- • the name of the company, the type of business, and the registered address;
- • a copy of the minute of the meeting where the decision of opening a branch was taken;
- • the name of the branch and its address,
- • the name of the person appointed to register the branch and the name of the branch’s representative,
- • the type of activities that will be performed by the branch.
All the above must be written in Portuguese or accompanied by a Portuguese official translation. The registration at Commercial Registry comes with the issuance 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 a 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.
Why open a branch instead of a subsidiary?
The registration procedure of a branch in Portugal is relatively simple compared to a subsidiary, meaning that there are fewer requirements, where the Articles of Association and the declaration of branch registration are mandatory. In the case of a subsidiary, the incorporation might seem complex because the investor needs to consider all the incorporation procedures of a company, from scratch. The accounting and the financial reporting for branches in Portugal are different from the ones for subsidiaries, the latter ones having to submit the annual financial reports. As for taxation of branches, these are subject to the corporate income tax of 21% as for any kind of local companies in Portugal. One of the important advantages of a branch in Portugal is that there is no need for a minimum share capital to deposit in a Portuguese bank account, just like in the case of subsidiaries.
FAQ about branches in Portugal
1. Do I need to travel to Portugal to open a branch?
No, there is no obligation for you to travel to Portugal
for establishing a branch
, however, you may appoint one of our representatives, with a power of attorney, to act on behalf of your foreign company in this country. We remind that our consultants are at your service if you would like to set up a branch and need a legal representative. Let us tell you more about this matter.
2. Do I need to register for tax purposes in Portugal?
Yes, all business entities, including branches, need to register for tax purposes and align with the taxation matters in this country. One needs to observe the corporate income tax and the VAT
, two major taxes imposed in Portugal.
3. What are the necessary documents for opening a branch in Portugal?
The Certificate of Good Standing of the foreign company, the Memorandum and the Articles of Association, a copy of the Certificate of Registration of the parent company, the minute of the General Meeting of the board of managers are a few of the necessary documents for establishing a branch in Portugal. In matters of formalities, the branch needs a legal representative with residency in Portugal.
4. Do I need accounting services in Portugal?
Yes, it is important to hire the services of an accounting firm in Portugal
if you would like to set up the operations as a branch. Before that, you will need to register for tax purposes, especially for VAT and social contributions. We remind that branches in Portugal
are subject to annual tax filings.
5. Can I purchase virtual office services for my branch in Portugal?
Yes, a virtual office
might be the proper solution for large companies from abroad that would, first of all, check up on the market and still have a professional business image with a notable business address and office in Portugal’s main cities. You should know that virtual office packages come with a virtual assistant, mail collecting and forwarding, phone and fax services, bank collection statements and many more.
6. Where do I register a branch in Portugal?
The Conservatorias do Registro Comercial or the Commercial Registry is the institution in charge of company registration, including branches in Portugal.
7. Do I need a representative agent for a branch in Portugal?
Yes, it is important to appoint a representative agent and a board of managers for your branch in Portugal.
8. Do I need a bank account for my branch in Portugal?
Yes, future financial operations need a bank account, therefore, it is mandatory to bear in mind this condition.
9. What is the duration for a branch in Portugal?
There is no specific duration for a branch in Portugal or for any company in this country, meaning that a company can perform the activities on indefinite time and no restrictions in this sense.
10. Can I hire staff for my branch?
Yes, you can decide on the local workforce
, and respect the Labor Law and the Employment Law in Portugal. If you choose to hire employers from other countries, you should observe the work permit rules for expats in Portugal
Our company formation agents in Portugal
are at your disposal if for more details related to branches
in this country. Contact us
for further information and personalized consultancy.