A commercial company in Portugal can be set up through different routes, each with its own timescales, costs and formalities, and choosing the most suitable type of company and method of incorporation is decisive for how the business will operate in future. This article forms part of the Corporate Law area of Araújo & Associados.
Choosing the right type of company
The most common type of company in Portugal is the private limited company (sociedade por quotas), particularly suited to small and medium-sized businesses because of its simplicity and the limited liability of its shareholders. Within this type of company, a distinction can be made between multi-member private limited companies, formed by two or more shareholders, where the minimum share capital is 1 euro per quota and, in practice, a minimum of 2 euros where there are two shareholders, and single-member private limited companies (sociedades unipessoais por quotas), formed by a single shareholder, with minimum share capital of 1 euro. For larger projects, or those intending to seek external investors through the issue of shares, it may be appropriate to set up a public limited company (sociedade anónima), whose minimum share capital is 50,000 euros and which has a more robust governance structure.
Empresa na Hora – immediate in-person incorporation
The special regime for immediate incorporation of companies, popularly known as “Empresa na Hora” (“Company on the Spot”), allows a private limited company, a single-member private limited company or a public limited company to be set up in a single in-person appointment. The process has a fixed cost, and requires a company name to be chosen from a list of pre-approved names made available by the State. The shareholders must attend in person, or be legally represented, with proof of identity and their Tax Identification Number.
Empresa Online – incorporation via the internet
The “Empresa Online” (“Online Company”) service allows the company to be set up over the internet, using the Citizen Card or a Digital Certificate. Registration through an authorised representative is also possible. All the acts required to incorporate the company are prepared in advance, such as drafting the articles of association, appointing managers or directors, preparing the lists of shareholders, the declaration of beneficial ownership, among others. The documents are signed by the shareholders and submitted online. Registration times vary depending on how busy the registry offices are. There is, however, an urgent registration option, which provides for definitive registration within 48 hours. This requires payment of double the registration fees.
Payment of share capital
Share capital is paid up in accordance with the articles of association. As a rule, contributions may be made immediately, by the end of the first financial year or, where the articles of association so provide, be deferred for a period of up to five years.
Mandatory content of the articles of association
The articles of association, also referred to as the company contract or the statutes, must contain a set of mandatory elements laid down in the Commercial Companies Code, including the company name, the corporate object, the registered office, the amount of share capital and how it is divided among the shareholders. In addition to these elements, the shareholders may set the essential rules governing how the company operates, including the ways in which shareholders finance the company’s equity, rules on the entry and exit of shareholders, and rules applicable to the corporate bodies, including the general meeting and the management or board of directors. Shareholders’ agreements – what they should contain and what they are for.
About Araújo & Associados
Established in 1980, with offices in Porto and Lisbon, Araújo & Associados provides legal advice on the incorporation of commercial companies, in Portuguese, English, French, German and Spanish.
Frequently asked questions about setting up a company
What is the difference in cost between Empresa na Hora and Empresa Online?
Empresa na Hora has a fixed cost of 360 euros. Empresa Online costs 220 euros with a pre-approved articles of association, or 360 euros with bespoke articles of association – so it may be cheaper than Empresa na Hora, depending on the option chosen.
Can I choose any name for my company under Empresa na Hora?
No. This regime requires a name to be chosen from a list of names pre-approved by the State – the Bolsa de Firmas (company name bank). To use a personalised name, you must first obtain a certificate of name admissibility from the National Registry of Legal Persons (Registo Nacional de Pessoas Coletivas).
I am the only shareholder - can I set up an ordinary private limited company, or must I opt for a single-member one?
You should opt for the single-member private limited company, a type of company designed specifically for a single shareholder, with minimum share capital of just 1 euro.
Is it possible to contribute to the share capital with work instead of money?
No. In limited liability private companies and public limited companies, the law does not allow contributions of labour or services, only contributions in cash or in kind.
Do I have to pay in all the share capital immediately when the company is set up?
Not necessarily. Depending on the type of company and the incorporation route chosen, the share capital may be paid in within five working days of incorporation, or by the end of the first financial year, or be deferred for up to 5 years, if the articles of association so provide.
Does my company legally exist as soon as I sign the articles of association?
Not yet with full legal personality. The company acquires legal personality only from the date of definitive registration of the company contract, pursuant to Article 5 of the Commercial Companies Code.
Contact us
For more information on setting up a company, or to book a legal consultation, you can contact us through our Porto or Lisbon offices, by telephone, email or via the form on the website. We provide legal advice in Portuguese, English, French, German and Spanish.