Set up LDA in Portugal
Deciding on a business in Portugal as a foreign investor can imply finding a suitable business form and that is the private limited liability company or LDA as it is known. Most of the activities can be implemented and developed in Portugal with the help of such a simple business structure that is in the attention of many entrepreneurs looking to generate profits in this part of Europe. Our company incorporation agents in Portugal are at the disposal of investors who are interested in opening an LDA in Portugal.
What is a Portuguese LDA?
A Portuguese LDA comes from a private limited liability company in Portugal, also known as quota or sociedade por quotas de responsabilidade limitada. This is the most common type of business structure in Portugal, especially for small and medium-sized companies.
What is the minimum share capital for an LDA in Portugal?
In order to set up a Portuguese LDA, a minimum share capital of EUR 5,000 is mandatory. This capital is divided into shares and the minimum value for each share is EUR 100. We remind that the capital contributions can be made in cash or in kind. One should know that half of the initial capital in cash has to be paid up prior to incorporation, while the assets must be evaluated by an auditor and then paid in full.
How many shareholders are necessary for an LDA in Portugal?
A Portuguese private limited liability company can be set up by at least one shareholder, regardless of the nationality or residency. If only one founder decides to set up a company, the structure is called sociedade unipessoal por quotas or SUQ. It is good to know that the shareholders are only liable to the extent of their contributions to the company.
What is the management structure of an LDA in Portugal?
The Company Law in Portugal does not mention the obligation to form a board of directors for a Portuguese LDA. The management role can be performed by a managing director who is appointed by the shareholders. On the other hand, the shareholder can also be the director of the firm who will be in charge of the decisions, operations and business direction of the company. If a director is appointed separately, he/she cannot make all decisions, therefore a general meeting has to be organized from time to time.
Choosing the name for your LDA in Portugal
The name of the private limited liability company is registered with the National Registry of Companies in Portugal. At the time you choose the name of your business, it is recommended to make a name verification in this sense and to propose three names. As a mandatory condition, the chosen and approved name must contain “Sociedad por Quotas” at the end of it or simply Lda. It is good to know that the authorities accept the name of the business in any language as long as it respects the above-mentioned requirement.
The registered office of your LDA
All LDAs in Portugal must have a registered office address in order to receive the company’s tax form, bills, and many more. The accounting records of your firm will be kept at the registered and declared business office in Portugal.
How can an LDA be verified in Portugal?
Auditing is not compulsory for a Portuguese LDA. It is, however, recommended to have a supervisory board for the private limited liability company in Portugal if the total balance sheet exceeds EUR 1,5 million in two consecutive years, if the net sales exceed EUR 3 million or if the number of employees is higher than 50.
Are there other requirements for an LDA in Portugal?
The name of a private limited liability company in Portugal must contain the word limitada or at least the letters LDA. Foreign investors can appoint a legal representative through power of attorney in order to deal with the company registration in Portugal.
The benefits of LDAs in Portugal
Private limited liability companies in Portugal address to both foreign and local entrepreneurs wanting to operate on the market with the help of a simple form of business. The incorporation process of an LDA in Portugal is less restrictive and has fewer formalities. Moreover, the shares in an LDA can be 100% owned by a foreigner, meaning that there is no need for a local investor to create the business. It is good to know that there is no need for audits if the company is small or medium. Requiring only one shareholder for creating an LDA in Portugal is another reason why investors from overseas decide on such a business structure, and more than that, the shareholder can be the director of the firm. Portugal is among the European countries that offer the possibility of creating a company with low capital, in this case, EUR 5,000 for an LDA.
The double taxation treaties signed by Portugal with countries worldwide protect foreign investors from paying the taxes twice on incomes and offer a series of tax advantages. LDAs are the most popular business structures in Portugal and on top of the list of investors who are interested in complete control in their company, an easy incorporation, an attractive minimum share capital and the option of collaborating in terms of business with companies worldwide in a reliable and easy manner. Understanding better the conditions for opening an LDA in Portugal can help foreigners commence the activities in this country within a few days, therefore, you may address your inquiries to our team of consultants.
For more details on the characteristics of an LDA, our Portuguese company formation specialists remain at your service. Please feel free to contact us for a personalized consultancy.
