How to Start a Business in Portugal
Traditional Method
Step 1: Admissibility Certificate.
Partners (or a qualified representative) must request, duly signed by one of the future members, of , the Admissibility Certificate of the company’s name, The application for the Admissibility Certificate can be completed online through the website Business Portal or the Institute of Registries and Notaries (IRN), in person at the National Register of Legal Entities (RNPC), or in written form (Model 1) or by regular mail. Step 2: Company Card. Always available in electronic format, it may also be available in hard copy, upon request. It is identification for multiple legal entities and similar entities with ID Tax Number (NIPC) with the exception of Traders / Private Entrepreneurs and Individual Limited Liability Establishment, which corresponds to the Taxpayer Identification Number and Social Security Registration Number (NISS), when applied. The card also has the main CAE and 3 secondary CAEs, the legal nature of the entity and the date of incorporation. The reverse side of the card includes the access code to the permanent certificate provided with the submission of the IES. The Company’s Card is available for free to companies who are incorporated under the service “Firm on the Spot”, “Branch on the Spot” and “Association on the Spot” and even companies online with definitive registration. The Company’s Card can be requested online at Business Portal or at the Office of Registration and Notary’s website, or in person at the RNPC, in the Commercial Registry Offices, Service Points in the Registries or Service Points of the Commercial register of the Company Store (“Loja da Empresa”). Step 3: Filing of Capital of the Company. The company's capital must be deposited in banks in an account opened on behalf of the future company. Step 4: The Memorandum of Association. Having completed all the steps above, it is now possible to create an agreement or Memorandum of Association. According to Decree-Law 76-A/2006 of March 29th, this became an optional step. Even in cases where there is the transfer of an immovable property, the deed is not mandatory, under Decree-Law No. 116/2008 of July 4th. The documentation to be submitted to the legal entity includes:
Step 5: Appointment of a Notarized Company Deed. This step will require the following documents:
Step 6: Company Deed by a public notary. The following documents for identification of incorporators are required:
Step 7: Declaration of commencement of activity. Within 15 days after registration, a declaration of commencement of activity must be submitted to the local tax office. This declaration is intended to settle the taxes obligations applicable to the company in order to comply with current tax laws. Step 8: Commercial Registration. The commercial registration is intended to make public the legal status of the following types of companies: sole traders, partnership companies, Individual Limited Liability Establishment, Cooperatives, Government Companies, Enterprises Group, European Limited Liability Companies, affiliated offices of foreign companies and entities of public utility (associations or foundations). The aim is to assure security of legal transactions. The registration process has to be submitted at the Commercial Registry Office, with the following documents:
The Commercial Registry Office will officially make public through the Internet and it will communicate the registration to the RNPC, to make part of the Collective Entities Database. In recent years, some innovations were introduced which resulted in the simplification of the incorporation process. The Decree-Law nº 76-A/2006 of March 29th introduced two new registration forms: transcription’s registration and deposit’s registration. The latter merely consists of the filing of documents that are entitled to registration and are not subject to validation by the Commercial Registry Office, which means the responsibility of the information submitted is of the applicant (usually the company). Decree-Law nº 73/2008 of April 16th established a bilingual Commercial Registration, thus allowing free access on-line of the company records in English language. This enables foreign investors to access on-line to the information of the Portuguese companies, without the need for Portuguese translation services. In the future, other foreign languages can also be made available. Ordinance nº 547/2009 of May 25th establishes the procedures for special operations with registration. With this legislation in force, entities can access a new counter called SIR (Integrated Solutions for Registration), with competences to carry out registration throughout the country, and providing the same services as the Commercial Registry Office. Step 9: Register with the Social Security Regional Center. The following documents are required:
Registration in the Social Security regional center should be made within 10 working days after the tax declaration on start of business activities. After this procedure is conducted, employers and employees are part of the National Social Security System and become taxpayers. Step 10: Submit an application for registration (“cadastro comercial”) at the Directorate General of Economic Activities (DGAE) or at the Local Directorate of the Ministry of Economics (DRE). Since 2008, companies are exempted from submitting a declaration of commencement or change of activity to the DGAE as the information is already available at the Taxes Authority. Regarding the industrial register (“cadastro industrial”), the Decree-Law Nº 174/2006 of August 25th, removed the mandatory registration of industrial facility, as well as its application. Under the new legislation, the information provided within the industrial licensing process will be assessed by the licensing authorities in order to get the “cadastro industrial” license without the need to supply additional information. Since June 30th 2006, according with the Decree-Law nº 76-A/2006 referred above, several procedures were simplified or even removed, namely the public deed which is no longer required for the incorporation of a company or in case of changing the memorandum of association. The only exception remains when initial capital has entries in kind (real estate), and in addition to the deed, the incorporation can be done through a certified private agreement. Thus, the Memorandum of Association only requires a written form and notarized signatures of all partners. Similarly, changes in the Memorandum of Association must have written form and the minutes of the respective meeting should be enough unless the law or the Memorandum specifies differently. In any case, the efficiency of these procedures depends on the final registration and publication. |
On the Spot Firm (“Empresa na Hora”)
Step 1: Choose a pre-approved company name.
The first step is to choose a name from the list of pre-approved names available at the website On the Spot Firm, or check the list that is available at the On the Spot Firm’s desk. The name chosen will only be kept until you come to the desk and start the setting-up process. A reference to the activity can always be added to the pre-approved name. Step 2: Choose a pre-approved memorandum and articles of association. Choose one of the pre-approved standard memorandum and articles of association packs, available at On the Spot Firm and in the portfolio of packs available at the desks. This process is only available to the following legal forms of companies: sole proprietorships, public limited companies and private limited liability companies. Step 3: Contact a Service Desk in person. The partners of the future company should go to the On the Spot Firm desk to start the incorporation process. A list of available desks can be found in the “Contacts” area at On the Spot Firm. In case partners of the future company are private individuals, the following documentation is required:
In case partners are legal enterprises/corporations:
Step 4: Memorandum and Articles of Association and Commercial Registration. At the service desk, it is possible to get both the articles of association and commercial registration. Partners will receive a certificate of incorporation, the corporate identification card, the Social Security number, the deed, and a business registration certificate. Step 5: Deliver the Declaration of Commencement of Activity. For tax purposes, the declaration of commencement of activity can be submitted at the help desk, duly signed by the accountant. If this is not submitted right away, it must be done within 15 days of the incorporation. Step 6: Deposit initial capital. Within no more than 5 working days of incorporation, the members must deposit the sum of the share capital in any bank, in the name of the company. The cost of incorporation is €360.00 and an amount of stamp duty at a rate of 0.4% over the capital value will also apply. This amount is payable at the time of incorporation, in cash or by check. For firms whose activity is related with technological development or research the cost of the service is €300.00, not including stamp duty. These costs include the publishing rate of the register over the Internet. If the company's share capital is fully or partly paid in by non-cash contributions (real estate), the property tax on real estate transfer or other related taxes will be levied by the service desk, ensuring its payment prior to the company’s incorporation. The Decree-Law nº111/2005 of July 8th approves the On the Spot Firm service which allows to set up a business in less than an hour, all the procedures are carried out in one place and as long as the partners have all of necessary documents, the company is set up immediately at one of the desks of the On the Spot Firm, available throughout the country, regardless of the location of the company’s headquarters.
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