• Incorporation of a Company in Portugal

    By Marina Andrade

    19-12-2018

    In order to incorporate a company and in accordance with what it is foreseen in the Law, you may choose one of the two “simple” ways to move forward with it: (i) Through the “On the Spot Firm” or to (ii) “Online Set Up Firm”.

    Regardless of the way of incorporation of the company that you may choose, a common step to both of them is that all the share holders have to have a Portuguese Tax Payer Number in Portugal.

    For that, you need to appoint a tax representative (since you are not tax residents in Portugal), and go with him/her to a Tax office with a proof of address (a bill or a bank statement with your name and address on it) and a copy of your passports in order to get the said tax payer number – usually the accountants companies do this kind of services, provided that the accounting of the company will also be done by them.

    Therefore, you must bring:

    1. Address proof; and
    2. Copy (and original) of your passports.

    After having the said Portuguese Tax Payer number you will be able to move forward with the incorporation of a company in Portugal.

    Since you will be 3 partners, I strongly suggest you that you incorporate a limited liability company, with 3 shareholders, with equal shares on the share capital of the company and being the 3 of you appointed as managers of the company – meaning that only with the signature of all of you 3 the company will be legally represented.

    So, based on the above, please find bellow the two incorporation possibilities mentioned:

    (i) On the Spot Firm

    This model allows setting up a company in less than an hour; all the procedures are carried out in one of the desks of the “On the Spot Firm” available throughout the country, regardless of the location of the company’s headquarters.

    This service also offers the possibility to adopt a pre-approved trademark similar to the company’s trade name, during the incorporation process (“On the Spot Trademark”) – not mandatory.

    The “On the Spot Firm” procedure is only available for Private Limited Companies, Public Limited Companies and Sole Shareholder Private Limited Companies.

    A description of the steps to incorporate an “On the Spot Firm” is set out below:

    1st Step: Choose of the company’s name

    The shareholders shall choose from a list of pre-approved names (made available online in the “On the Spot Firm” website or in the competent departments where “On the Spot Firms” may be incorporated). This list is a selection of proposed names which already have a Corporation Identification Number of the company, that shall correspond also to its taxpayer number (NIPC) and a Social Security number, to be issued upon incorporation. A reference to the scope of activities of the company shall be added to the pre-approved name – please note that those pre-approved names are things like “Blue Table” or “Simple Dress” but in Portuguese. We may have the luck to find a name that suits you but it will be like a “miracle”. On the other hand, you may choose to move forward with one of this names and then, later on, change it for another one better.

    However, the definitive attribution of the name is only carried-out in the presence of the shareholders at the moment of incorporation.

    It is possible to choose a name not included in the aforementioned list of pre-approved names in case it is presented a certificate on the name approval previously obtained with the National Registry of Corporations (this procedure is detailed below in the 1st Step of Traditional set-up procedure).

    2nd Step: To choose a pre-approved standard article of association

    The shareholders shall choose the articles of association from the several pre-approved models.

    3rd Step: Attendance at Competent Service

    In order to initiate the procedure of the “On the Spot Firm”, shareholders must personally attend one of the competent services for that purpose. The “On the Spot Firm” website contains a list of all competent services in Portugal.

    Individual shareholders shall possess the citizen card or the following documents:

    • Identification Document (identity card, passport, driver’s license or residence authorisation);
    • Taxpayer number; and
    • Address proof.

    Note: Individual shareholders may be represented through a power of attorney issued in the presence of a Notary or a Portuguese lawyer and duly authenticated.

    Individuals representing corporations shall also possess the following documents:

    • Company card or taxpayer card of the company;
    • Updated extract of the entry in the Commercial Registry;
    • Instrument conferring representation powers for the incorporation of the company (minutes of resolutions or powers of attorney, as applicable).

    In case the share capital is fully or partially paid up by means of contributions in kind, the auditor’s report shall be presented at the incorporation of the company. In fact, contributions in kind shall be subject to an evaluation by an independent auditor who shall issue a report on the valuation of the contribution in kind which is valid for 90 days and that shall be made available to the shareholders no later than 15 days before the incorporation of the company.

    4th Step: Execution of articles of association and commercial registry

    Upon choice of the articles of association the same shall be immediately executed and the commercial registry is performed immediately afterwards. The shareholders shall receive an access code to the on-line commercial registry certificate, the social security number and a certified version of the articles of association.

    Additionally, the commercial registry office shall also issue the company card (in electronic form). The company card is the ID card of the company and shall contain the Corporation Identification Number of the company, which shall correspond also to its taxpayer (NIPC), and the company’s social security number (unless in the case of Individual Sole Traders and Limited Liability Sole Trader Establishment). This card also contains the code(s) of activity of the company, its legal nature and its date of incorporation.

    5th Step: Share Capital

    Shareholders shall proceed with the deposit of the share capital within 5 days after the incorporation. As to Private Limited Liability Companies and Sole Shareholder Private Limited Liability Companies, the shareholders may declare in the incorporation document that the share capital will be deposited in a bank account opened in the name of the new company until the end of the first fiscal year.

    In case of contributions in kind regarding assets whose transfer is subject to registration (e.g. transfer of real estate property), the Competent Service shall promote the assessment of any applicable tax (e.g. Property Transfer Tax) and ensure that incorporation only takes place after tax payments have been completed.

    6th Step: Filing of commencement of activity statement

    The company shall be registered for tax purposes by means of the submission of a commencement of activity statement that may be immediately filed with the service that has incorporated the company in case the same is signed by the Chartered Accountant (Técnico Oficial de Contas). Otherwise, the commencement of activity statement shall be filed with the tax services within 15 days following the company’s incorporation.

    The cost of incorporation is of €360. This amount may be paid in cash, by cheque or through ATM. For companies with scopes of activity related to technology and investigation the cost is reduced to €300. The referred amounts include the online publication of the incorporation registry.

    (ii) Online set-up

    The special regime on the online set-up of companies has been approved and allows the setting up of a company through the internet.

    Incorporation of Public and Private Limited Liability Companies (with the exception of European Companies and companies whose contributions of capital involve real estate assets) is made in the website Portal da Empresa. The procedure is supervised by the National Registry of Corporations regardless of the location of the registered offices of the company to be incorporated.

    The registration is performed immediately (in case the company adopts a version of articles of association pre-approved by the National Registry of Corporations) or within a maximum term of 2 business days (in case the shareholders agree on a different version articles of association which is submitted by the applicant).

    Administrative fees are reduced in 40%.

    The access to the Online Setup service requires a personal computer with an internet connection and digital certification resources (these latter are available in Portuguese citizen cards) – I may do it in your behalf since I’m an attorney with an electronic certificate.

    A description of the steps to an Online Set-up is set out below:

    1st Step: Choose of the company’s name

    There are two options to choose the name of the company:

    1. Choice and reservation of a name from the list of names available online (list of names proposed by the National Registry of Corporations, which already have a Corporation Identification Number of the company, that shall correspond also to its taxpayer number (NIPC) and a Social Security number, to be issued upon incorporation);
    2. Choice of name through prior filing for a name approval certificate previously obtained with the National Registry of Corporations (case where the applicant shall insert the corporation identification number in the system). The name approval certificate has a validity of 3 months as of issuing or renewal.

    So, in this second case you may choose a name, submit the said name to the approval of the National Registry of Corporations Office and then use it to incorporate the company.

    2nd Step: Information on the company

    The applicant must select either a pre-approved template of the articles of association or a customized document prepared by the shareholders.

    The following information should be filed:

    a) Company:

    • In case the company’s name is selected from the list of names, reference to the scope of activity that shall join the company’s name (optional);
    • Type of company;
    • Registered offices;
    • Scope of activities;
    • Economic Activity Classification (CAE);
    • Share capital; and
    • IBAN (optional) for possible reimbursement by wire transfer.

    Additionally to the above, and in case the applicant has chosen pre-approved articles of association, the following information shall be added:

    1. how share capital will be paid-up;
    2. in case of a Public Liability Company, face value of the shares; and
    3. binding rule.

    Whenever applicable, administrative licenses may also be required.

    b) Participants:

    Shareholders:

    1. Information on individual shareholder - name, gender, taxpayer number in Portugal, marital status (and in case of being married, marital regime and name of husband/spouse), city of birth, nationality, address, telephone contact, e-mail address;
    2. Information on shareholder who are corporations – corporate name, registered offices and corporation identification number; and
    3. Amount of quota (Private Limited Companies) or number of shares (Public Limited Companies) to be held.

    In case of customized document of Incorporation, it shall be included in the forum the name, Portuguese taxpayer number and e-mail of the shareholder (optional). This identification allows the shareholders to have access to the draft of the document of incorporation made available on-line for discussion purposes.

    Management and Audit:

    1. In case of Public Limited Companies, identification of Effective Auditor, Substitute Auditor and at least one director (full name, address and Portuguese taxpayer number); or
    2. In case of Private Limited Companies, identification of at least one director (full name, address and Portuguese taxpayer number).

    Chartered Accountant (Técnico Oficial de Contas) – three options:

    1. Appoint an accountant by inserting the respective data (association member number, name, taxpayer number, professional address, telephone contact and e-mail address);

    3rd Step: Undertaking in relation to an Arbitration Centre

    After inserting the company’s information, the applicant shall inform whether he/she accepts an undertaking in relation to an arbitration center. The undertaking is simple, voluntary and has no cost implication: the applicant shall fulfill the form Adesão Plena e Imediata at the time of the Online Set Up. By this undertaking, the company accepts to submit to such center exclusive jurisdiction in relation to any conflicts that may arise within the competencies of the center.

    Codes of activity related to the sale and purchase of vehicles or provision of services related to vehicles are only allowed to accede to the Automobile Arbitration Centre.

    4th Step: Validation of the articles of association

    After inserting the information on the company and participants, the applicant may proceed with the validation of the articles of association.

    For pre-approved articles, the application only allows the review of the document for the identification and amendment of errors or inaccuracies resulting from the data insertion. This operation is performed in a private forum with limited access to shareholders whose e-mail address has been provided in 2nd Step.

    When the articles are prepared by the applicant, these shall be uploaded so that the same are available to the shareholders in the private forum.

    Afterwards, by receiving a notice from the shareholders, the applicant may proceed with any necessary amendments by acceding to the process in the Company Electronic File. When this process is concluded, the application shall automatically generate a social security number.

    5th Step: Signature and submission of documents

    After validating the articles of association, the applicant shall proceed with the following steps:

    • Print and signature of the following documents:
      1. Articles of Association;
      2. Form of Undertaking to the Arbitration Centre (if applicable); and
      3. Form for signature certification.
    • Upload of the aforementioned signed documents as well as of:
      1. Relevant powers of attorney (if applicable);
      2. Commercial registry certificate (if applicable);
      3. Minutes of resolutions (if applicable);
      4. Articles of association of shareholders (if applicable);
      5. Statement of acceptance issued by Effective Auditor (if applicable);
      6. Statement of acceptance issued by Substitute Auditor (if applicable);
      7. Administrative authorizations (if applicable); and
      8. Any other relevant document.

    The online submission of documents replaces the requirement of sending by courier physical documents. The submitted documents shall be kept until receipt of confirmation of the company’s incorporation.

    6th Step: Payment

    The costs of the incorporation correspond to the sum of the fixed and variable figures set out below:

    • €75,00 to request a specific name – and if you ask it with urgency the cost will be €150,00;
    • €180 (pre-approved model of articles of association); or
    • €380 (articles prepared by applicant and agreed between the participants)

    For companies with scopes of activity related to technology and investigation the cost is reduced to €120 or €20, respectively.

    In case a trademark is associated to the company, an additional amount of €100 shall also be paid (plus €44 per each additional class of trademark).

    7th Step: Non-conformities

    In case of errors being detected during the registration process, the applicant receives an e-mail requesting the respective rectification which shall occur within five working days. If not settled within the time limit, the status of incorporation will be "deadline for error resolution expired”. In these cases, registration remains as provisional or is refused.

    This error rectification is made through log in at the Business Portal and, once it is complete, the process must be re-submitted for final registration.

    If the errors are related with the payment, the applicant will have to go to the National Registry of Corporations to rectify the situation.

    8th Step: Next Steps

    After submitting the application for incorporation of the Company Online, the information is validated by the services. Then the following steps will occur:

    • E-mail notice to the applicant acknowledging the receipt of the request by the competent services;
    • E-mail notice to the applicant confirming the incorporation process;
    • Documentation sent by regular mail to the company’s headquarters: commercial registry certificate, company’s card and payment receipts;
    • Publication of the company’s registration on-line at the Ministry of Justice;
    • Notify the tax authorities: the information of the Accountant (if appointed or assigned) is also made available that it may submit the declaration of commencement of activity;
    • Submission of the information on the company’s incorporation with the Social Security services;
    • Submission of the information with the Office for Legal Policy and Planning site: information related to the registration of companies’ business (e.g., incorporation, change of headquarters or changes to the corporate bodies), to the National Institute of Statistics, for statistical purposes; and
    • After incorporation, the Foundation for National Scientific Computing issues a user ID and password that will allow the management of the Internet domain for the company’s website and corporate e-mail addresses.
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  • The information provided in this article is for general information purposes only. The information is not intended to be comprehensive or to include advice on which you may rely. You should always consult a suitably qualified professional on any specific matter.

Marina Andrade

Marina Andrade is based in Portugal and has been a member of the Portuguese BAR Association since 2009. Marina Andrade has over 12 years of experience specializing in international issues as Immigration Law and Non Habitual Tax Residence Regime in Portugal. She has written articles in the Portuguese News Papers, as well as in international papers as Multilaw. Marina Andrade gained experience through volunteering, having helped institutions as JA Worldwide.

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