Types of Companies in Portugal

The business opportunities in Portugal are for those who want to take advantage of a proper and respected climate and who want to generate money in an appreciated financial market. Entrepreneurs from abroad can easily set up varied types of companies, with complete assistance offered by our team of company formation specialists in Portugal. When a foreign investor decides to set up a company in Portugal, he/she must decide from the beginning upon the type of company he wants to establish. The Company Law in Portugal sets several types of structures from which a foreigner can choose.

How can I open a private limited company (sociedade por quotas - LDA)?

This type of company is the most common in Portugal. It is usually chosen by foreign investors who want to set up a small business in Portugal. At least two shareholders can establish a private limited company in Portugal, only if they provide a minimum share capital of EUR 5,000. Liability of the founders for company’s obligations only extends to their own contributions to the initial capital.

Can I set up a public company (sociedade anónima - SA)?

Foreign investors who want a medium or large sized company choose this type of structure. Public companies in Portugal require a minimum share capital of EUR 50,000 and at least five shareholders in order to be incorporated. Still, the founders are liable for the company’s obligations only to the extent of their contributions.

What is a limited partnership (sociedade em comandita - SC)?

Partnerships in Portugal are only formed between at least two partners. In order to set up a limited partnership in Portugal, no minimum capital is required. Its particularity is that one partner has to be general and have full liability for the company’s obligations (socios comanditarias), while the other one must have limited liability (socios comanditados).

General partnership (sociedade em nome collectivo - SNC) in Portugal

Just like the limited partnerships, general partnerships also need at least two partners to incorporate them. No minimum capital is required here either. As opposed to the limited partnerships, all the members in a general partnership in Portugal are fully responsible for the company’s obligations and they are able to make decisions on behalf of the company and manage the company. Please feel free to get in touch with our advisors if you want to register a company in Portugal.

What is a single shareholder (EIRL) entity in Portugal?

When only one founder decides to set up a company in Portugal, the only type he can incorporate is a company with a single shareholder. This type of structure is quite simple to set up, but it is rather rarely formed. The founder is liable only for the company’s assets.

 Requirements for opening an LDA in Portugal

Entrepreneurs interested in opening a private limited liability company in Portugal need to bear in mind a few of the important conditions, such as:

• • the private limited liability company can be registered with at least 2 stockholders and a minimum share capital of EUR 5,000;

• • the Articles of Association stand at the base of LDA formation in Portugal;

• • the capital contribution of the LDA is usually stipulated in the Articles of Association and it is represented by shares;

• • there is no obligation for appointing a board of managers for your LDA in Portugal, but a director can run the business.

One should know that the name of the private limited liability company in Portugal needs to contain the letters LDA or the world “limitada” at the end of it.

Establishing a subsidiary in Portugal

A subsidiary is a legal entity that can run under the rules of an LDA if it is a small or medium business or as a joint stock if it is a large company. In any case, a subsidiary is an independent entity from the parent company, it can have the same name or another one as long as it operates with the same activities as the company from abroad. Just like for all companies, a subsidiary must have a representative agent who needs to have residency in Portugal. As for the registration of a subsidiary in Portugal, this starts with the Commercial Registry and the conditions in this matter, like submitting the Articles of Association with information about the owners, and the decision of opening the subsidiary issued by the parent company. We invite you to talk to our advisors and find out how we can help when establishing a subsidiary in Portugal. They can also help you register the subsidiary with the tax authorities in Portugal.

Establishing a branch in Portugal

Setting up a branch in Portugal is subject to an easy incorporation and the whole process can be supervised by our team of consultants. A branch is dependent on the parent company in a foreign country. As for the documents which need to be prepared for establishing a branch in Portugal, we mention the Articles of Association and the decision of opening a branch made by the company from abroad. A branch can run the activities as a limited liability company, it has to be registered with the tax authorities in Portugal and with the Social Security Regional Center. We remind that foreign branches in Portugal are protected from paying the taxes twice (in Portugal and abroad) by the numerous double taxation agreements signed by Portugal with countries worldwide. You can address your inquiries to our company formation specialists in Portugal if you are interested in establishing a branch in Portugal.

We invite you to contact our company incorporation agents in Portugal for more details on any type of structure. We can handle the registration process of your firm, in agreement with your needs.