Portugal Limited Company Incorporation

How to Incorporate a Private Limited Company/ Sociedad por Quotas (Lda) in Portugal

After you have submitted the proposed name of your company to us, approval can be obtained within several hours. You can carry out a free name check now using our Company Name Check service. Your company name must be unique and not deceptively similar to the name of any other Portuguese company but can be in any language using the Latin alphabet. Your company name must also reflect the activities that the company intends to perform and cannot be misleading regarding the activities it proposes to undertake.

After the approval of the corporate name the Registry will issue a certificate of registration together with a provisional tax registration card. We will then request a Public Registry Deed and establish a date for the Public Registry of the company at the Notary Office, with the following documents:

• Certificate of company admissibility
• Provisional Collective Person Identification Card Number
• Photocopies of the respective signing entities identity papers
• Official Auditor report for the different asset participation’s

The Public Deed must be signed and sealed by public notary and, once the incorporation deed has been executed, we can declare the Start of Activity at the Direcção-Geral dos Impostos (Government tax office).

It typically takes around two weeks to incorporate your new company,

Formacompany has over 20 years’ experience forming companies in Portugal and across the world, and our staff will be available to offer advice and support through the entire incorporation process, from initially selecting a suitable company name through to finally commencing taxable activities.

What you need to set up a Private Limited Company/ Lda in Portugal

To begin incorporation of your limited company we will require the following:

• Your company name
• The full name, date of birth, address and nationality of all directors
• The full name and address of all shareholders

Documents you are required to provide:

• Proof of identity (passport, national identity card, photographic driving licence).
• Proof of residential address (gas/electricity bill or credit/debit card bank statement dated within the last three months)

Registered Office

All companies require a registered office in Portugal where official letters may be sent and where tax forms are executed and where all financial and reporting documents such as accounting records and company registers must be kept. We can provide a registered office in Portugal as part of our Standard Company Formation Package.

Share Capital requirements

• The minimum share capital is €5000 and this needs to be fully paid into a bank account in Portugal upon incorporation.
• A Sociedade por Quotas – Lda is required to maintain a legal reserve, intended to protect third parties and to cover any losses; a minimum of 5% of profits must added to the reserve each year.

Ready Made Companies

• We have shelf companies in Portugal currently available, with standard Memorandum and Articles designed to permit most general activities; making it possible to commence business at very short notice. Our ready made companies are in good standing, are not the subject of any insolvency proceedings and have not entered into any contracts or engaged in any business activities.

What you receive after setting up your new business

The set of corporate documents for an Lda in Portugal will always include:

1. Minutes of the first inaugural meetings (showing all appointments of officers and allocations of shares)
2. Copies of the Memorandum of Association and Articles of Association
3. Original Certificate of Incorporation
4. Copy of the Declaration of Compliance

Additional documentation may include special powers of attorney, additional corporate resolutions.

Advantages to Setting up a Private Limited Company / Lda in Portugal

1. It is not necessary to visit Portugal to form your Lda, although it is recommended. When incorporating your company, the ‘articles of association’ as well as the ‘sale and transfer agreement’ of shares must be notarised. The founders of a company must prove their identity before a notary with valid ID documents. Also, it is necessary for your company to open a bank account (a Portuguese bank is recommended) which is also easier to do in person. However, it is also possible to be represented by another person who has been granted power of attorney certified with an Apostille or a Legalisation by a foreign notary. Formacompany can represent you as founder and/or shareholder before the notary at your request. However, if you do wish to use this option, please note that this process can take considerably longer than incorporating in person
2. There are no restrictions on the percentage of foreign ownership allowed in a Portuguese company. It is possible to incorporate a company which is totally owned by non-residents whether corporate or individual.
3. A company can be formed by a single person who can be both the sole director and the sole shareholder. If this is the case, the company needs to include the word ‘unipessoal’ in its title.
4. The scope of the business activities can be very wide. The objects in the Memorandum can detail a specific activity or can be give a general, broad description allowing for a more versatile business. e.g. “The objects of the company are commercial, industrial and investment activities”.
5. Shareholders’ meetings do not need to be held in Portugal. Shareholder meetings are ordinarily held in the municipality in which the company has its legal address but, if the Articles of Association state that they may be held elsewhere, they can take place in any location.

Important Information about Incorporating a Private Limited Company/ Lda in Portugal

• Members of a Sociedade por Quotas – Lda have quotas, rather than shares, and the quotas are described in the Articles of Association. Quotas can be transferred only by public deed.
• An Lda requires in general two members, however the incorporating of private limited companies with a single quota holder is also permitted.