Foreign investors in Portugal who want to set up companies in this country need to respect the legislation in this sense. The Company Act stipulates the rules and regulations for company formation, the types of companies, and the activities these can register in Portugal. For a better understanding of how companies can be formed in Portugal in agreement with the applicable laws, we invite you to get in touch with our team of agents for opening a company in Portugal.
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Main features of the Company Act in Portugal
The Portuguese Company Act is a set of laws that explains how businesses can develop in Portugal. It also includes information about the types of companies, the documents required for company registration in Portugal, and specific regulations. Let’s review some of the main characteristics of the Company Act in Portugal:
- company registration requires a set of documents, like Articles and Memorandum of Association. These must include information about the business name, registered address, share capital, and more.
- the same Company Act in Portugal stipulates the types of companies that exist: limited liability companies, joint stock companies, holding companies, etc.
- shareholders/business owners must incorporate a company and comply with the regulations of the Trade Register in Portugal.
- an interesting thing about the Company Act in Portugal is that this document also explains how spouses can establish a company, the rights, liabilities, and interests they can have in the company
- according to this document, entrepreneurs can determine whether the company will operate for an unlimited period or whether it will be established for this purpose. This information should be found in the Articles of Association.
- it is permitted to draw up a shareholders’ agreement specifying voting rights, business instructions, and various legal rights.
These are some of the provisions of the Company Act in Portugal. We recommend that those interested in doing business seek the help of our agents in company formation in Portugal to benefit from complete services.
What companies fall under the provisions of the Company Act in Portugal?
The Company Act in Portugal is based on the Portuguese Commercial Code, Decree-Law 262/86 released on September 2nd, 1986. All companies in Portugal fall under the regulations of the above-mentioned law. For companies with the head office in Portugal, the rules apply according to Company Act, while companies that activate in Portugal, but have their head office abroad, are only subject to Company Law after one year of commercial activity.
The Company Act in Portugal mentions several types of companies. Private limited companies, public companies, general and limited partnerships, as well as companies with a single shareholder, each of them with the specific requirements and regulations regarding structure and organization.
How can companies perform activities in Portugal?
Companies from abroad that want to settle their operations in Portugal for more than one year need to have permanent establishments in this country and respect the regulations of the Company Act. These firms need to be represented by an appointed agent with residency in Portugal.
If you are a foreign entrepreneur and want to open a business in Portugal, we recommend the specialized services of our accountants in Portugal. They can take care of a number of important aspects, including bookkeeping, payroll, preparation, and submission of annual financial statements. They can also take care of the registration for the payment of taxes, so you benefit from all the support offered in this matter.
What stands at the base of company formation in Portugal?
The Articles of Association are the company’s main documents which contain information about the name of the business, the type of firm, the activities, the purposes, the business address, the liabilities of the partners involved and details about the capital contribution of each member. Also, the Articles of Association need to contain information about how such firm can be closed.
What is the duration of a company in accordance with the Company Act in Portugal?
Any type of company with establishments in Portugal has an indefinite duration if there are no mentions regarding the company liquidation at a certain time. If the Articles of Association comprise information about the fixed duration of the firm, then a resolution in this sense will be signed by partners before the termination date. We are at your disposal with complete support for company incorporation in Portugal.
Provisions regarding the employment procedures in Portugal
The Company Act in Portugal goes hand in hand with the Labor Law. The Labor Code, amended by Law 7/2009 is responsible for every aspect regarding employment issues. It is mandatory to write and sign an employment contract for a definite or an indefinite period contract, with details about salary, rights & obligations, etc.. Responsibilities and rights are mentioned in the Labor Code for both employers and employees, as well as certain specifications on their professional relationship. Foreign employees in Portugal must obtain a work permit, and afterward, they have the same rights as Portuguese nationals.
All entrepreneurs who set up a company in Portugal must be aware of the regulations of the Company Act in Portugal, even foreign investors. This way, it will be easier to observe the rules and keep the company’s activities legal.
Are general and limited partnerships available in Portugal?
Yes, general and limited partnerships are available in Portugal. The Company Act in Portugal mentions that these business structures can be managed by their partners on a daily basis. Plus, all partners have limited or unlimited personal liability and can use their personal assets to pay company/business debts. We invite you to discuss with our agents more about general and limited partnerships mentioned by the Portuguese Company Act.
Minimum share capital for various business structures in Portugal
Are you ready to set up a company in Portugal? The following information about the minimum share capital required for registering a firm in this country may help you:
- a private limited liability company in Portugal requires as little as EUR 1 as a minimum share capital;
- EUR 5,000 is required for an Individual Limited Liability Establishment (E.I.R.L.);
- public limited liability companies require a minimum share capital of EUR 50,000;
- establishing partnerships and sole proprietorships in Portugal does not require a minimum share capital.
For more details regarding the Company Act, please feel free to contact our company formation specialists in Portugal.