Setting up a company in Portugal

Setting up a company in Portugal: steps to take

It is not the intention here to make an exhaustive file on the creation of all forms of companies or on all other forms of establishment in Portugal, but more simply to explain what are the steps to create a limited liability company (sociedades por quotas) by natural persons in less than 24 hours in Portugal.

For more information or to have us set up a company for you, contact us.

The "Empresa na Hora" system:

This service is available in the "centros de formalidades das empresas" (Business Formalities Centres) (2 in Lisbon) and in the "Conservatórias do Registo comercial".

As far as business formalities centres are concerned, this is a place where the main services needed for the creation and initial administrative steps of a company are grouped together.

We will limit ourselves here to describing the procedures for a "por quotas" company (corresponding to a limited liability company in France), or a uni-pessoal company (corresponding to a sole proprietorship).

For which type of limited liability companies: All companies except those for which prior authorisation is required and those whose share capital is not solely in cash (capital in kind).

You can carry out your formalities at any location that offers the "empresa na hora" service, regardless of where your registered office is located. We recommend the Business Formalities Centres, as you will be able to deal with other formalities concerning the life of your company (Tax Administration and Social Security) at the same time.

There are no obstacles to report for foreigners wishing to set up a company via the "empresa na hora" service.

Step 1: Choosing a company name

This is one of the limitations of the service, namely that you have to choose the name of your future company from a pre-defined list (reserved for this purpose). This list is not the most imaginative in terms of company names: there are few mnemonic words and especially foreign words (they are English in these cases). You can consult this list on the website www.empresanahora.mj.pt. 

It is better to have an alternative to the name you choose, as this list is not updated in real time and you may have chosen a name that is currently being assigned.

If you want to be able to choose the name of your company, you must first apply to the "Registo Nacional de Pessoas Colectivas". This application can be made by post or by internet. In these cases, it is obviously no longer a matter of creating a company in 24 hours, as this application may take several days, or even longer if the names you propose are not accepted.

Remember also that the legal name of the company has nothing to do with the business name that you may later add to it.

2^ème Step: The company's articles of association

Once you have chosen the name of the company, you will have to choose a model of articles of association from the two proposed by the service. These model articles of association are standard and minimalist, which means that for everything that is not written in the company agreement, the general law of the company code applies. In summary, if you have an immediate need for binding articles of association involving several partners, the creation of a company via the "empresa na hora" service is not for you.

All the partners of the company must be present or legally represented. They must bring with them an identity document (e.g. a valid passport) and their tax identification number (n. de identificação fiscal). See the file "First steps" to know how to obtain this tax number. 

3^ème step: Choose the company's registered office:

You must give a precise address for the company's registered office. You will not be asked to provide proof of rental or purchase of premises. 

4^ème Step: The company's share capital

There are two possibilities: you can deposit it beforehand at a bank of your choice or you can deposit it afterwards. In the latter case, you have 5 working days to do so.

5^ème Step: Choice of the business object and CAE classification (Código de Actividade Económica)

Normally, you should already have a fairly clear idea of the purpose of the company you want to set up (it is better that way!). Don't hesitate to ask the person who will receive you for help. This person works at the Commercial Register Office and is, in principle, familiar with these issues.

The ACE is defined according to your main activity.

6^ème step: signing the statutes and paying for the service

After proofreading, you must sign the articles of association in front of the official who follows your file and who has the power to recognise your signatures in official form. The cost of incorporation varies according to the amount of share capital. For 10,000 euros of capital, it will cost you 400 euros payable immediately in cash or by cheque.

You will be given a "cartão de pessoa colectiva" and a "certidão do registo da Sociedade", which are the two documents defining the identity of your company. You will also be given a tax number for your company, which is an essential identification element for invoicing or opening a bank account.

In this respect, we strongly advise you to open a bank account and deposit the capital after the company has been set up (although you should of course contact one or more banks beforehand).

That's it! Your company is legally established but not quite ready to start its activity.

To do this you must make a declaration of commencement of activity.

7^ème step: Declaration of the start of activity

In order to operate, a company has to declare the start of its activity to the tax authorities. The advantage is that you have an office of the tax administration in the same premises as the "empresa na Hora" service. 

To do this, you must fill in an "Inicio de Actividade" form. You can only start an activity with a T.O.C. (técnico oficial de Contas) responsible for your accounting. 

Either you know an OCD or it is provided to you by the OCD Exchange (from the OCD Chamber). The cost of choosing an OCD via the OCD Exchange is 50 euros (+IVA).

Alternatively, you can make your business declaration via the Internet. You then have 15 days from the date of the company's creation to do so. However, you can only make this declaration once you have deposited the capital money in a bank.

From this point on, your company can have an activity and start charging for its services or products.

Your company will also be registered with the Portuguese social security system as soon as it is created and automatically (written into the articles of association). 

If you wish to register employees or register as a paid manager you can do so immediately at the social security desk in the Centre.

The publication of the creation of the company is done online on the website www.mj.gov.pt/publicacoes

During the first year, you are automatically allocated an internet domain name (ending in .pt) free of charge. In the days following the creation of the domain name, you will receive a letter from the Internet provider at the company's headquarters giving you a login and password to manage your account.

The "empresa na Hora" service can be carried out in 11 business formalities centres (Centro de formalidade da empresas) throughout the country (including 2 in Lisbon).

Conclusion

Due to the constraints imposed by the system, the "empresa na hora" service is rather reserved for family businesses or businesses with one or two partners without constraints of company name or statutes: this is nevertheless the case for many people who want to create small or medium-sized businesses.

Then remember that you can always change the articles of association of your company at any time, including the name, address of the registered office, adding clauses to the articles of association, partners, etc. 

Note on the "Empresa on-line" system: Since September 2007, there is the "Empresa on-line" system which allows you to create a company from A to Z on the internet. However, we will not talk about this system which is more restrictive. In order to use it, you must have a qualified electronic signature (which involves other steps and is currently reserved for Portuguese citizens) or go through a lawyer or notary who has a digital signature.