How to open a company in Portugal without making any mistakes
Opening a company is a process that can be a little complex, especially if this is your first time trying to do it.
In addition to having to plan and structure your business well, you’ll have to make decisions about your company’s legal form, gather documentation you’ve probably never heard of, and follow various procedures to the letter. But don’t worry, we’re not here to discourage you, on the contrary. In this article we will explain what you should know before opening your company and what are the procedures to follow, step by step.
To be successful, before opening a company you need to invest your time in studies and in a good business plan
It is often said that haste is the enemy of perfection. And when we talk about creating a company or starting a business, it is essential to structure ideas, verify their viability and define a business model.
And do you know why it is so important to dedicate yourself to these points before opening your company? Because a good idea is not synonymous with viability and success. To find out if your idea is really good and viable, you must first analyze the market and your target audience. By doing this analysis through a market and feasibility study, you will not only be able to understand which competing companies exist, but also understand the acceptance by your public in relation to the product or service you intend to offer.
If you’re satisfied with the results, then it’s time to start structuring your business plan. Although many businessmen and entrepreneurs ignore this procedure, the truth is that starting a company without a business plan is a serious mistake that can doom a business with potential to failure. That said, dedicate yourself to creating your business plan, and always remember that it must be written in simple language, in accordance with current reality. Avoid writing a document based on your expectations as much as possible, which may or may not correspond to reality.
Do not forget that at a minimum a good business plan must contain:
- An executive summary;
- The description and history of the company or entrepreneurs;
- Must address the underlying market;
- Talk about the idea and positioning in the market;
- It must contain the commercial strategy;
- Discuss how the management and control of the business will be carried out;
- In addition, it is important that you define the investment that will be required, as well as the financial projections and financial model.
- Don’t forget to attach contracts, agreements, patents and any statements you have in your possession.
It’s time to define the legal form of your company
Once you have your ideas well structured and how you are going to put them into practice, it is time to define the legal form of your company. While it may seem like a simple decision, it does require some technical analysis. After all, the legal form you choose will not only influence the taxes you will have to pay, but also the legal procedures you will have to follow to create your company.
For example, if you want to open a company where you will be the only partner, there are two different possibilities to do so:
- Being a sole proprietorship
- Open a sole proprietorship by quotas
To make this decision, you should carefully analyze what each of these options entails, as their obligations and risks are completely different. For example, a sole proprietorship only has to fill in his declaration of commencement of activity and register with Social Security. If your net annual income does not exceed 200 thousand euros, then you can opt for simplified accounting, without the need to have a Certified Accountant.
However, this does not mean that it is the most advantageous option for your business. Imagine that your business does not go as planned. As capital is not required to start the activity, if the company has outstanding debts, it is your personal assets that will be responsible for the company’s debts. In addition, you will have to deal with numerous bureaucracies and taxes, such as VAT, if you are not exempt, and the IRS, which without the help of an accountant can be a real headache.
In a Sole Proprietorship, although he is the only partner, his liability is limited. That is, in case your company accumulates some debts, your personal assets are not responsible for them. However, it is important for you to know that you must take the following factors into account:
- This type of company is subject to corporate income tax;
- You must hire the services of a Certified Accountant;
- In a Sole Proprietorship by Quotas it is always necessary to define the share capital, with a minimum value of 1 euro, and to open a bank account for the company;
- When it’s time to open your company, you’ll have more documents to deliver and decisions to make.
- To open your company you will need to register it, with the name containing the word “Unipessoal or Sociedade Unipessoal” and then “Lda ou Limitada”.
- Finally, you must also open activity in Finance and enroll in Social Security.
But, if you intend to open a company with more than one partner, then you should find out about the obligations of a Private Limited Company or a Public Limited Company.
But, if you intend to open a company with more than one partner, then you should find out about the obligations of a Private Limited Company or a Public Limited Company. But, if you intend to open a company with more than one partner, then you should find out about the obligations of a Private Limited Company or a Public Limited Company.
If you intend to set up a public limited company, you should know that the share capital is divided into shares. In terms of obligation, this type of society requires at least 5 partners, whose liability corresponds to the value of their shares. However, unlike other legal forms, a limited liability company cannot have a share capital of less than 50,000 euros.
In case of doubts or if you are also interested in information about a General Partnership or a Limited Partnership, it is advisable to carefully read the Commercial Companies Code, present in Decree-Law nº 262/86.
Do you have questions where to create your company? Perhaps the best option is a Empresa na Hora.
Currently, one of the most practical ways to open a company in Portugal is to handle all procedures through Empresa na Hora. In addition to easily being able to gather the information you need over the internet, there are branches from north to south of the country where you can arrange the creation of your company.
The Empresa na Hora allows access to several pre-approved templates that greatly facilitate the creation of your company.
Don’t forget that you will need to gather documents and make some decisions
This is the part that usually raises the most questions for those who want to open a company. And the question that tends to be asked is: “What documents do you need to open a company in Portugal?” Well, if you choose to handle the procedures through Empresa na Hora, first of all you must decide whether you want to choose a pre-approved name for your company or you want to choose a name of your liking and ask for approval through a certificate of admissibility .
The choice of name
In practical terms, it is much simpler to choose a pre-approved name, as all you have to do is consult the list of names that exist online or at a counter. If you do not want this solution, then you will have to have a certificate of admissibility of the firm or denomination, where the name already approved appears on the issuance.
To obtain this certificate, you must apply through the ePortugal website. Don’t forget that after the certificate is issued, it is only valid for 3 months. If you choose to set up the company through a branch of the National Registry of Legal Entities, then you can get the name approved at the time of creation of the company.
Next, it is advisable to choose a social pact model. This model is a necessary requirement if you intend to create a sole proprietorship by quotas, limited liability company or anonymous. Currently, it is easy to consult the various models of social pacts that exist on the Internet. In the case of opting for a sole proprietorship by quotas, only a social pact is available on the company’s website at the time. In other cases, there is more than one option, and you should carefully read each one of them.
The day you will open your company
Finally, on the day you go to a Empresa na hora, you must be accompanied by all your company partners. If any of the partners is unable to be present, then another may represent him. However, for this to be possible, it is necessary to bring a power of attorney and have your own Citizen Card with you.
In terms of necessary personal documents, all members must carry their citizen card with them or, if this does not exist, the Identity and Taxpayer Card. In the case of foreign citizens, it is necessary to be accompanied by a passport or residence permit.
Do not forget that it is always necessary to appoint a Certified Accountant. If you prefer to submit the start-up declaration to Finance, you have up to 15 days to do so from the date of creation of your company. Finally, you have 5 days to deposit the share capital of your company or each partner in the company’s bank account. There is also the possibility of delivering the share capital into the company’s coffers by the end of the first financial year.
What if my partners are legal persons?
In this case, the list of documents to be presented increases considerably. Partners who are legal persons must present:
- The identification card of a legal person or they can also present the access code to the Electronic Card
- You will also need the identification documents of the legal representatives of the company you want to create, such as the Citizen’s Card;
- Afterwards, it is necessary to deliver the minutes of deliberation of the General Assembly, which must establish the legal representatives and give them power to create the association;;
- Finally, the deed certificate or the constitution document or the updated social pact of the collective entities is required.
How much will I have to pay to open a company?
If you choose to do the entire process through Empresa na Hora, the costs are usually lower. The creation of the company costs 360 euros.
A cost of 200 euros is then established if there is a brand associated with a class of products or services. If you want to add one more, each of these has an additional cost of 44 euros.
No caso do capital social incluir bens que não sejam dinheiro, vai ter que somar a estes valores, os seguintes custos:
- 50 euros for each property, quota or social participation;
- 30 euros for each movable property;
- And 20 euros for each moped, motorcycle, tricycle or quadricycle with a cylinder capacity of up to 50 cm3. It is important to note that the maximum amount established is 30 thousand euros.
Although nowadays it is easy to obtain the necessary information, there are several technical procedures that must be reviewed by qualified professionals in order to avoid legal problems . If you need help setting up your company or clarifying doubts, at Mário Moura Contabilidade we are always available to help you achieve your goals.
see you soon,
Mário Moura Contabilidade