Corporate Law at Portugal
Corporate law in Portugal governs the formation, operation, and dissolution of companies and other business entities. Here's a concise overview of the key aspects:
1. Legal Framework
Corporate law in Portugal is primarily governed by:
Commercial Companies Code (Código das Sociedades Comerciais)
Civil Code and Commercial Code
Securities Code (Código dos Valores Mobiliários) for listed companies
Labour and Tax Laws also intersect with corporate law
2. Main Types of Companies
Here are the most common types of business entities in Portugal:
| Type | Portuguese Name | Key Features |
|---|---|---|
| Private Limited Company | Sociedade por Quotas (Lda.) | Most common for SMEs, limited liability, minimum capital €1 |
| Public Limited Company | Sociedade Anónima (S.A.) | Suitable for larger businesses, share capital minimum €50,000 |
| Sole Trader | Empresário em Nome Individual | Full liability of owner |
| Limited Liability Sole Trader | Estabelecimento Individual de Responsabilidade Limitada (EIRL) | Limited liability with personal control |
| Partnership | Sociedade em Nome Coletivo | Partners share responsibility and liability |
3. Company Formation Process
To register a company in Portugal:
Name Reservation: Obtain a company name certificate from RNPC (Registo Nacional de Pessoas Colectivas).
Company Incorporation: Draft and notarize articles of association.
Register with the Commercial Registry Office (Conservatória do Registo Comercial).
Obtain a Tax Identification Number (NIF).
Open a Bank Account and deposit share capital.
Register for Social Security and other legal obligations.
Portugal also offers "Empresa na Hora", a fast-track company registration process allowing setup in one day.
4. Corporate Governance
Lda.: Managed by one or more managers (gerentes).
S.A.: Requires a board of directors and supervisory board or single auditor.
Annual general meetings are mandatory.
Shareholders have defined rights and obligations under the law.
5. Taxation
Corporate Income Tax (IRC): Standard rate is 21% (national), with possible municipal surtaxes.
VAT (IVA): Standard rate is 23%.
Withholding Taxes: On dividends, royalties, and interest, unless exempted under EU directives or treaties.
6. Foreign Investment
Portugal welcomes foreign investment with no major restrictions.
Foreigners can own 100% of shares in Portuguese companies.
EU residents benefit from additional legal ease.
7. Compliance & Reporting
Annual financial statements must be submitted.
Some companies require audit depending on size and turnover.
Companies must maintain proper accounting records and comply with GDPR.
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