The two types of business entities commonly used by foreign investors in Portugal are the limited liability company (Lda) and the corporation (SA). The first is more suited to small or medium companies, and it can be incorporated by only one director and one shareholder and has a very low minimum share capital of only 1 EUR. Shareholders are liable for debts up to the amounts covered by business assets. The SA requires at least 5 shareholders and has higher minimum share capital requirements (50,000 EUR), making this business form suited to large companies. Liability of debts is limited to business assets and shareholders are liable for amounts up to their share value. But before starting the legal procedures, please check first if your area of business activity has any additional requirements, such as a license or certain qualifications.
There are three methods of setting up a Company in Portugal. You can choose the Traditional method or in alternative, two other simplified ways: online and on-the-spot. By the traditional method procedure, you have first to obtain a Certificate of Admissibility through the Institute of Registries and Notaries (IRN), to formally identify your Portuguese company name. You have to request a Portuguese tax number for all non-Portuguese shareholders and open a bank account to deposit the initial share capital. You have to draft the Articles of Associationwith the information of the company name, corporate Bodies -Board of directors/ managers and auditor-corporate purpose, share capital, shares/quotas nominal value. After that you are able to formalize the Companythrough a private written document–where the shareholders’ signatures must be certified in the presence of a lawyer or a notary -that has to be Registered at the Commercial Registry Office and declared c at the local Tax Office. In alternative, if you incorporate your company through the two other possible procedures – the on-the spot firm-procedure or the online company incorporation – youhave to choose a name for the business from the list of pre-approved names and adopt one of the pre-approved by-laws available created and reserved by the Portuguese authorities. All partners should be present along with all necessary documentation and any legal representatives.Your company will be immediately incorporated and registered, and in these two last procedures the share capital in cash shall be deposited within 5 days following the incorporation.
If you want to hire employees you have to celebrate employment contracts that can be verbal, except the ones that are mandatorily required to be entered into in writing which are the fixed term employment contract, the part-time employment contract, the temporary work contract, the intermittent employment contract; the teleworkingcontracts and the single employee contracts with multiple employers. Don’t forget to register each employee with theSocial Security.
Article courtesy of Catarina d’Orey.