Company Registration in Portugal - Business Starting & Setup

The Portuguese legal system is a civil law or continental legal system, based on Roman law. Portuguese law is mainly influenced by French law. EU law is now a major driving force in many respects, such as corporate law, administrative law and civil procedure.

Basic corporate Law of Portugal is found in the Commercial Code (1888, as amended).

Under Portuguese legislation, the following types of commercial entities may be established in Portugal to carry on business:

• sole proprietor (Empresário em Nome Individual);
• individual limited liability establishment (Estabelecimento Individual de Responsabilidade Limitada);
• partnership company (Sociedade em Nome Coletivo);
• limited partnership company (Sociedades em Comandita);
• cooperative;
• limited liability company (Sociedade por Quotas);
• public limited company (Sociedade anônima );
• branch of a foreign entity.

The most common type of company in Portugal is limited labiality company (Lda.).

The usual company name format in Portugal is “Name – Business Activity, Extension”, but the business activity component is now optional and many newly incorporated companies are dropping it. As regards the extension, a quota company must end its name with Lda. If the quota company has a single quota holder, then the name must end with “Unipessoal, Lda”.

In the event you do not have a preferred name, a "pre-approved name" will be adopted. This is a fantasy name from a list that is put together and regularly updated by the company registry office, from which anyone can choose a company name that will not be challenged for being confusable. Names on this list cannot be reserved and will be allocated on a first-come, first-served basis.

If a specific name is to be adopted, you can either adopt the name(s) of the main shareholder(s) or a fantasy name of your choice. In the latter case you should provide at least 3 alternative names, as the registrar has to ensure that it shall be unique and not confusable with an existing company name. The name may be any name in any language, but it must in the Roman alphabet and must not be misleading, contain sensitive words, or suggest an activity subject to special authorization (e.g. financial).

There are two ways of starting a business in Portugal:

1) "On the Spot Firm" (Empresa na Hora). This service enables to set up a company in less than an hour at a single contact point:, 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. Registration procedure includes the following steps:

• 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.
• 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.
• Obtain a certificate of incorporation, the corporate identification card, the Social Security number, the deed, and a business registration certificate. 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.

Incorporation under "Empresa na Hora" costs EUR 360.

2) "Online company setting up” (Empresa Online). This service enables to set up a company through the Internet in 1 to 2 days. The access to the service On-Line Company (‘Empresa Online’) can be made through the Business Portal (www.portaldaempresa.pt).

Incorporation a company under "Empresa na Hora" costs EUR 360 if not incorporated with pre-approved by-laws, or EUR 220 if incorporated with pre-approved by-laws.

After incorporation of a company the employers must register with the social security regional center. The employers shall communicate the admission of employees to the Portuguese Social Security services of the area of the employee's workplace, by any written means, or online at www.seg-social.pt, within (i) 24 hours preceding the employment agreement’s entry into force; or (ii) 24 hours following the beginning of the activity. The non-compliance with this obligation implies the assumption that the relevant employee started to work for the company on the 1st working day of the sixth month prior to the occurrence of the infringement. In case the relevant employee is receiving sickness or unemployment benefits there is also an assumption that the employ started to work for the company on the date in which those benefits were granted, whereby the company will be severally liable for returning the whole amounts unduly received by the employee by the Portuguese Social Security. Moreover, the non-compliance with the above mentioned obligation may result in a minor or a serious misdemeanor, depending on its compliance within 24 hours after the deadline or after that, corresponding to a fine from EUR 75 up to EUR 4 800.

All Portuguese businesses need a registered office where the authorities can send official letters and claims, as well as where control of the tax forms is executed. All financial and fiscal documents, registers, company papers etc. must be kept at the registered office of the business, but they may be kept in digital format.

Under Portuguese law, a company is not required to have a corporate seal. The standard practice is to have a rubber stamp, but even this is becoming less common.

The redomiciliation of companies either to or from Portugal is permitted.

In Portuguese companies at least one director is required. There are no legal restrictions on the nationality or place of residence of Portuguese company directors. But please note that each of them has to have or obtain a Portuguese taxpayer identification number and that non-EU/EEA entities must have a resident tax representative.

Corporate directors are permitted, but in this case an individual representative of the corporate director must be appointed and registered with the registry office.

It should be noted that under Portuguese law a company director can be personally jointly liable with the company in connection with any company's unpaid taxes and social security contributions that originated or became due during his/her term as a director. For this reason, the availability of nominee directors is very scarce, those available are relatively highly paid and as a rule will not issue general powers of attorney - only specific ones.

There are no requirements to meeting of Board of directors.

Names of directors do appear in public records.

For Portuguese companies, secretary is optional, but it is recommended in the event that the company does not have a Portugal resident director. The secretary is appointed by the general meeting of quota holders. The secretary is appointed for the same term as that of the officers that appointed him/her.

The secretary must be an individual, must hold a “suitable academic degree” and, except in the case of companies belonging to the same group of companies, may not act as the secretary of more than 7 companies.

A Portuguese company must have at least 2 shareholders. There are no legal restrictions on the nationality or place of residence of the shareholders of a Portuguese company and they may be either individuals or corporate bodies. But please note that each of them has to have or obtain a Portuguese taxpayer identification number and that non-EU / EEA entities must have a resident tax representative.

Names of shareholders do appear on public records.

Shareholders must hold General Assembly annually to approve the annual financial statements within 3 months from the close of the fiscal year to which it relates.

In 2017, the Law on the Central Registry of Beneficial Owners was adopted.

BOCR is a database containing information on individuals who own or control legal entities - directly, indirectly or through third parties.

Information on beneficial owners in BOCR is provided online on the IRN website. The information must be accurate, allow to identify the ultimate beneficial owner (name, date of birth, address of residence), and must reflect the nature and extent of his/her participation in the legal entity. The date when the individual became the beneficiary is also indicated.

Using information from the register, the tax authorities will be able to check whether the company applies tax rates on tax treaties reasonably, and will be able to monitor transactions between related persons of the same beneficiary.

Since January 2011, there is no minimum capital required for Limited Liability Companies in Portugal. Partners must define a certain amount which is represented by “quotas” (shares), each one with a minimum value of EUR 1 and may assume different values.

Shares in a private company are usually transferred by a written agreement duly registered at the appropriate Registry Office.

Bearer shares and shares with no par value are not allowed.