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Company Formation in Portugal

How does INLIS Consulting provide support in the areas of company law and business practices in Portugal?

Boost your business success in Portugal by partnering with Inlis Consulting's expert team. Our comprehensive business solutions and unwavering support cover everything from initial planning and incorporation to seamless day-to-day operations. Experience the ease of running your own business with our specialized services.

Company Formation in Portugal: Choosing the Right Structure and Drafting the MOU:

Starting a business in Portugal and the European zone is made easier with the excellent Company Formation services available. Portugal offers various types of companies, but the two most popular and practical options are the "Individual Company (UNIPAL)" owned entirely by one individual, and the "Private Limited Liability Company (LDA.)" managed by unlimited shareholders and partners.
 

Before incorporating a company, it is crucial to prepare and draft a Memorandum of Understanding (MOU). The MOU outlines the company's activities, responsibilities, and the distribution of shares ownership. Shareholders have the option to physically sign the documents, or they can appoint a legal representative to sign on their behalf using a power of attorney.
 

By following these necessary steps, you can embark on your business journey in Portugal confidently and take advantage of the benefits offered by this thriving European market.

To register as a freelancer in Portugal, certain documents are necessary. These include:

  1. Passport or equivalent  

  2. Address proof of shareholders and board of directors 

  3. Virtual or physical office space 

  4. Memorandum of association 

  5. Translate documents in Portuguese or English. 

  6.  The company must be active in the taxation, labour, and financial department whiten 15 days from the moment of formation. The business account was obligatory with any private and public financial institutions for a limited period. 

INLIS Consulting: Your One-Stop Solution for Tax Success!

In order to comply with applicable law and regulations, a business must at all times have a certified accountant who is responsible for its accounts and do the following filings:

 

  • Monthly Payroll - filing and payment of Social Security contributions and employees' withheld tax.

  • Monthly Withholding Tax - filing and payment of tax withheld on paid professional fees and rents.

  • Monthly Invoices Filing with the Tax Office (SAFT).

  • Monthly or Quarterly VAT - filing of the VAT return and ECSL, and payment of VAT, if any.

  • In January each year - filing of the paid salaries and fees annual report (Mod 10).

  • In Month 7, 9 and 12 of the financial year - filing and payment of advance corporation tax on account (PPC).

  • In Month 3 and 10 of the financial year - filing and payment of special advance corporation tax on account (PEC), starting in year 3.

  • In Month 3 after the FYE - filing the minutes of the ordinary general shareholders meeting (approval of the annual accounts).

  • In Month 5 after the FYE - filing of the annual corporation tax return (IRC) and payment of corporation tax on balance, plus payment of autonomous taxation on certain expenses.

  • In Month 7 after the FYE - filing and payment of the annual return (IES).

 

The accounting firm may be also responsible for:

 

  • The mandatory signing and filing of the business commencement form by a certified accountant with the tax office

  • Business address and mail-to-email service

  • Compliance (bookkeeping, VAT, accounts and tax returns)

  • Indication of the registered office address of the company

  • What is the duration of Company activation in tax, social & labour departments?
    Approximately 15 days or latter subject to a fine.
  • What are UNIPAL and LDA?
    UNIPAL refers to an individual company where a single shareholder holds 100% of the shares. On the other hand, LDA stands for Private Limited Liability Company, which typically consists of multiple shareholders and directors involved in the company's operations.
  • Is it possible for an individual to establish an offshore company in Portugal?
    Certainly, an individual can establish an offshore company in Portugal; however, they may not be eligible to process their immigration file or obtain any associated benefits.
  • What is the minimum capital required for the startup/ formation of each company?
    The minimum capital required for the startup or formation of each company can vary depending on the jurisdiction and specific regulations of the country in question. It is important to note that I have knowledge up until September 2021, and regulations may have changed since then. For Portugal, the minimum share capital requirements for different company types are as follows: UNIPAL (Individual Company): There is no specific minimum capital requirement for this type of company. The shareholder can determine the capital amount at their discretion. LDA (Private Limited Liability Company): The minimum share capital requirement for an LDA in Portugal is typically €5,000. However, it is worth noting that recent legislative changes in Portugal have allowed for the creation of "Simplified Private Limited Companies" (Sociedades por Quotas Simplificadas), where the minimum share capital requirement is reduced to €1.

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