Investor's Guide – How to set up a company - Incorporatrion and Registration of a Company - Traditional set-up

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Investor's Guide

 

 

How to set-up a company

 

2.2.1 Simplified set-up

  

2.2. Set-up of a companyThe Legislative and Administrative Simplification Program (“Simplex”) has been created with the purpose of simplifying procedures as well as associated practices of the Public Administration, reducing the bureaucracy towards citizens and companies.

 

 

 

In terms of the setting-up of companies, the following Simplex procedures are noteworthy: 

  • On the Spot Firm: special regime on the instant incorporation of companies; 
  • Online Set-up: incorporation of companies online. 

On The Spot Firm

Online Set Up

Costs in case of pre-approved corporate name

€360

Costs in case of pre-approved Articles of Association

€180

Costs in case of prior request of the corporate name approval certificate

€435

Costs in case of customized / tailor-made Articles of Association

€380

Where?

At the Company store
– Loja da Empresa

(several locations across the country)

Telephone: 707 10 10 99;

From abroad: (+351) 289 106 540;

Weekdays, from 09:00h to 17:00h;

info.portaldaempresa@ama.pt.

Where?

At the website:

www.portaldaempresa.pt

 

 

(i) On the Spot Firm

 

Decree-Law no. 111/2005 of July 8th approves the On the Spot Firm service which allows setting up a business in less than an hour; all the procedures are carried out in one of the desks of the On the Spot Firm Service available throughout the country, regardless of the location of the company’s headquarters.

 

This service also offers the possibility of adopting a pre-approved trademark similar to the company’s trade name, during the incorporation process (“On the Spot Trademark”).

 

The On the Spot Firm procedure is only available for Private Limited Liability Companies by Shares, Private Limited Liability Companies by quotas and Sole Shareholder Private Limited Liability Companies by quotas.

 

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

 

1st Step: Choice of the company’s name

 

The shareholders shall choose from a list of pre-approved names (available online at the On the Spot Firm website or at any desk where On the Spot Firms may be incorporated). This list is a selection of proposed names which already have an associated Company Identification Number, that also corresponds to its taxpayer number ("NIPC") and a Social Security number, to be issued upon incorporation.

 

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 a certificate of approval of company name previously obtained with the National Register of Legal Entities is presented (this procedure is detailed below in the 1st Step of the Traditional set-up procedure).

 

2nd Step: Choice of pre-approved articles of association

 

The shareholders shall choose one of the pre-approved articles of association available online at the On the Spot Firm website or at any of the desks where On the Spot Firms can be incorporated).

 

3rd Step: Attendance at the Competent Service

 

In order to initiate the procedure of the On the Spot Firm, shareholders must personally appear 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 carry their citizen card or the following documents: 

  • Identification Document (identity card, passport, driver’s license or residence permit); and
  • Taxpayer card.

 

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 legal entities shall also present the following documents: 

  • Updated commercial registry extract; 
  • Document granting representation powers for the incorporation of the company(minutes of resolutions or powers of attorney, as applicable).

Note: In the case of foreign legal entities, the commercial registry extract and the document granting representation powers for the incorporation must be, respectively, legalized (with an Apostille or, in case the issuing country is not party to The Hague Convention of October 5th, 1961, by the local Portuguese Consulate) and certified by a Notary and legalized (as described above). Both documents shall be translated into Portuguese.

 

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. Contributions in kind are subject to valuation 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 at least 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 Company Identification Number, which also corresponds 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 main Economic Code of Activity of the company and up to 3 second codes, its legal nature and its date of incorporation.

 

5th Step: Share Capital

 

Except in the case of postponement of capital contributions, the shareholders shall deposit the share capital within 5 days after the incorporation. As for Private Limited Liability Companies by quotas and Sole Shareholder Private Limited Liability Companies by quotas, 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 all taxes have been paid.

 

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) ("TOC"). 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 €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 to 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 by Decree-Law no. 125/2006, of June 29th, and allows the setting up of a company through the internet.

 

The incorporation of  Private Limited Liability Companies by shares and by quotas (with the exception of European Companies and companies whose contributions of capital involve real estate assets) is made on the website "Portal da Empresa". The procedure is supervised by the National Register of Legal Entities 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 Register of Legal Entities) or within a maximum term of 2 business days (in case the shareholders agree on a different version of the articles of association which is submitted by one of the applicants).

 

Administrative fees are reduced by 40%.

 

The access to the Online Set-up service requires a personal computer with an internet connection and digital certification resources (these latter are available in Portuguese citizen cards).

 

Firstly, the applicant’s digital certificate shall be authenticated in the "Portal da Empresa" website. In case the respective digital certificate is being authenticated for the first time, the applicant will have access to the information made available by the digital certificate (name, e-mail address, physical address and taxpayer number) and is allowed to update the contact details.

 

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

 

1st Step: Choice of the company’s name

 

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

(i)   Choice and reservation of a name from the list of names available online (list of names proposed by the National Register of Legal Entities, which already have a Company Identification Number, that shall also correspond to its taxpayer number ("NIPC") and a Social Security number, to be issued upon incorporation); or

(ii)  Choice of name through prior filing for a name approval certificate previously obtained with the National Register of Legal Entities (case where the applicant shall insert the company identification number in the system). The name approval certificate is valid for 3 months as of issuing or renewal.

 

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 filled in: 

a) Company:  

In case the company’s name is selected from the list of names, reference to the scope of activity that shall be added to the company’s name (optional);

  • Type of company;
  • Registered offices;
  • Scope of activities;
  • Economic Code of Activity;
  • Share capital; and
  • IBAN (optional) for possible reimbursement by wire transfer.

Without prejudice of the above, and in case the applicant has chosen pre-approved articles of association, the following information shall be added: 

(i)   how share capital will be paid-up;

(ii)  in case of a Private Liability Company by shares, face value of the shares; and

(iii) binding rule.

 

Whenever applicable, administrative licenses may also be required for conclusion of the incorporation procedures.

 

b) Participants:  

Shareholders:  

(i)   Information on individual shareholder - name, gender, taxpayer number, marital status (and in case of being married, marital regime and name of spouse), city of birth, nationality, address, telephone contact and e-mail address;

(ii)  Information on shareholder(s) who are legal entities – corporate name, registered offices and company identification number; and

(iii) Face value of quota (Private Limited Liability Companies by quotas) or number of shares (Private Limited Liability Companies by shares) to be held.

 

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

 

Management and Audit: 

(i)   In case of Private Limited Liability Companies by shares, identification of Effective Auditor, Substitute Auditor and director(s) (full name, address and Portuguese taxpayer number); or

(ii)  In case of Private Limited Liability Companies by quotas, identification of at least one director (full name, address and Portuguese taxpayer number).

 

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

(i)   Appoint a TOC by inserting the respective data (association member number, name, taxpayer number, professional address, telephone contact and e-mail address);

(ii)  Select a TOC from the list made available by the Association of Certified Accountants (Ordem dos Contabilistas Certificados); or

(iii) Not to appoint a TOC and file the commencement of activity statement within 15 days.

 

3rd Step: Adhesion to an Arbitration Centre

 

After inserting the company’s information, the applicant shall inform whether he/she accepts to adhere to an arbitration centre. The undertaking is simple, voluntary and has no cost: 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 centre exclusive jurisdiction in relation to any conflicts that may arise within the attributions of the centre.

 

Companies that adopt Economic Codes of Activity related to the sale and purchase of vehicles or provision of services related to vehicles are only allowed to adhere 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 applicants are only allowed to review the document for the identification and amendment of errors or inaccuracies resulting from the data insertion. This is performed in a private forum with limited access to shareholders whose e-mail address has been provided in the 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 accessing 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: 

( i)   Articles of Association;

(ii)  Form of Adhesion to the Arbitration Centre (if applicable); and

(iii) Form for signature certification. 

  • Upload of the aforementioned signed documents as well as of: 

(i)   Relevant powers of attorney (if applicable);

(ii)  Commercial registry certificate (if applicable);

(iii) Minutes of resolutions (if applicable);

(iv) Articles of association of shareholders (if applicable);

(v)  Statement of acceptance issued by Effective Auditor (if applicable);

(vi) Statement of acceptance issued by Substitute Auditor (if applicable);

(vii)   Administrative authorizations (if applicable); and

(viii)  Any other relevant document.

 

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

 

6th Step: Payment

 

The costs of the incorporation:  

  • €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 €320, 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 5 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 "Portal da Empresa" 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 Register of Legal Entities 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 website of the Ministry of Justice;
  • Notice to the tax authorities: the information of the TOC (if appointed or assigned) is also made available so that he/she 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 to the Office for Legal Policy and Planning: 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. 

2.2.2 Traditional Set-up

 

Although the incorporation of a company in Portugal may be carried-out through highly simplified procedures described above, any investor may incorporate a company through the traditional procedure, which is set out below:

 

1st Step: Name approval certificate

 

The first step is the filing for the name approval certificate. The filing shall be undertaken by one of the future shareholders of the company (or by its legal representative) and shall identify the name, scope of activity and district and municipality of the company’s registered offices.

 

The application for the name approval certificate can be completed online through the website "Empresa Online" or the Institute of Registries and Notaries, in person at the National Register of Legal Entities, or in written form (Model 1) or by regular mail.

 

The name approval certificate is valid for 3 months as of issuance or renewal.

 

2nd Step: Share Capital

 

The contributions in cash to the company’s share capital shall be deposited in a bank account opened in the name of the company to be incorporated.

 

In case there are contributions in kind to the share capital, they shall be subject to valuation by an independent auditor. The auditor shall issue a report on the valuation of the contribution in kind which shall be valid for 90 days and made available to the shareholders at least 15 days prior to the execution of the incorporation document (see below).

 

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

 

As regards Private Limited Liability Companies by shares, the payment of 70% of contributions in cash may be postponed for a 5 years’ period. The issuance premium (if existent) may not be postponed.

 

As regards Private Limited Liability Companies by quotas, the payment of the full amount of contributions in cash may be postponed for a 5 years’ period. Without prejudice of the possibility of postponement of the payment of contributions the shareholders may state in the incorporation document that the payment of the contributions to the company’s share capital will be undertaken up until the end of the first financial year.

 

3rd Step: Incorporation document

 

The incorporation of the company shall be formalized by means of the execution, by the shareholders, of a written document which shall contain as an attachment the articles of association of the company.

 

Under Decree-Law no. 76-A/2006, of March 29th, the shareholders may incorporate the company through the execution of a private document even if there are contributions in kind involving the transfer of a real estate property (the public deed is no longer required pursuant to Decree-Law no. 116/2008, of July 4th).

 

The signatures of the shareholders shall be certified, in presence, by a notary or a lawyer. In case of a contribution in kind involving the transfer of a real estate property, the notary or lawyer must not only certify the signatory’s presence but also authenticate the incorporation document.

 

It is recommended that the members of the corporate bodies are appointed within the incorporation document so to allow the registration of these members immediately upon registration of the company’s incorporation. It should be noted that all members of corporate bodies that are not resident in Portugal for tax purposes must obtain a Portuguese taxpayer number. For EU citizens, this taxpayer number may be obtained directly with the tax administration (in presence or by means of an appointed proxy); as to non-EU citizens the same must appoint a Portuguese tax resident representative to handle matters with the tax authorities.

 

If the traditional procedure is chosen, (i) the company data card and the access code to the on-line certificate will only become available after the registration has been completed (not at the time of filing) and (ii) it will be necessary to register the branch for social security within 10 days from submission of the declaration of commencement of trading to the tax authorities.

 

4th Step: Commercial Registration

 

The incorporation of the company (and the appointment of the members of the corporate bodies) shall be submitted to commercial registration. The company’s incorporation and the appointment of the Company’s directors and auditors will be effective vis-à-vis third parties upon conclusion of such registration.

 

The registration request (Model 1) shall be submitted with the Commercial Registry Office by any shareholder, director or legal representative (including lawyers) of the company, jointly with the following documents: 

  • Name approval certificate (as obtained in 1st Step);
  • Incorporation Document (including as attachment the articles of association);
  • Auditor’s report for contributions in kind (if applicable);
  • Evidence of payment of Property Transfer Tax (if applicable);
  • List with indication of ultimate beneficial owners(s);
  • Statement of acceptance issued by Effective Auditor (if applicable); and
  • Statement of acceptance issued by Substitute Auditor (if applicable).

 

The Commercial Registry Office shall automatically publish the registration online and convey the incorporation to the National Register of Legal Entities to register the new company in the Central File of Legal Entities.

 

Upon completion of the registration of the incorporation of the company (and appointment of the members of the corporate bodies of the company), an access code to the on-line commercial registry certificate of the company shall be provided by the Commercial Registry Office.

 

Decree-Law no. 73/2008, of April 16th has created a bilingual commercial registration, being possible to apply for an access code to an English version of the on-line commercial registry certificate of the company. The authorities are contemplating the possibility of adding other foreign languages, if so needed, in the near future.

 

5th Step: Commencement of Activity Statement – Tax

 

Within 15 days as of the registration filing, the company shall be registered for tax purposes by means of a commencement of activity statement to be filed with the tax authorities jointly with the delivery of the commercial registry certificate of the new company.

 

The TOC shall sign the statement together with the company’s representatives.

 

6th Step: Commencement of Activity Statement – Social Security

 

Within 10 business days as of filing the commencement of activity statement before the tax authorities, the company shall be registered for social security purposes by means of a commencement of activity statement to be filed with the social security services with the delivery of the following documentation: 

  • Commercial registry certificate;
  • Evidence of the commencement of activity for tax purposes;
  • Document appointing corporate bodies (incorporation document or relevant minutes of the competent corporate body’s resolution); and
  • Taxpayer number of members of corporate bodies.

 

7th Step: Minutes’ books

 

Upon completion of the commercial registration, the company shall open minutes’ books, both for shareholders’ resolutions and resolutions of other corporate bodies (to the extent applicable).

 

Summary of the Traditional Set-up procedure 

 

Traditional Set Up

Steps

Actions

Relevant Entity

Cost

1. Name approval certificate

Request of a valid name for the new company.

National Registry of Corporations.

€75

2. Share capital

Deposit of share capital and/or report on the contributions in kind (if applicable).

Bank.

Independent Auditor (if applicable).

(depends on the type of the company)

3. Incorporation document

Execution of private document incorporating the company.

N/A

N/A

4. Commercial registration

File for registration of the company.

Commercial Registry Office.

€360 (incorporation)

€87,5 (appointment of corporate bodies in case the respective registration is submitted simultaneously with the registration of the incorporation)

5. Commencement of Activity – Tax

Filing of a commencement of activity statement tax purposes.

Tax Authorities

N/A

6. Commencement of Activity – Social Security

Filing of a commencement of activity statement for social security purposes.

Social Security Authorities

N/A

7. Minutes’ books

Open books to draw-up shareholders’ and corporate bodies resolutions.

N/A

N/A

 

 

 

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