Portugal Info
Joined: 21 Oct 2006
Posts: 21
Home Country: portugal
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 Posted: Thu Oct 26, 2006 4:44 am Post subject: DOING BUSINESS IN PORTUGAL |
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DOING BUSINESS IN PORTUGAL
STARTING A BUSINESS
STANDARDIZED COMPANY
Legal Form: Societate cu Rãspundere Limitatã
Minimum Capital Requirement: 5,000
City: Lisbon
Registration Requirements:
Procedure 1. Choose a pre-approved company name
Time to complete: 1 day
Cost to complete: included in procedure 2
Comment: The procedure through the RNPC takes from 10 to 15 working days and costs. €71 (€56 for certification of approval of name, €14 for collective person provisional identification card). Additional €31 if reserve of name is requested.
If the parties decide to incorporate the company outside Centros de Formalidades das Empresas (CFE), they can request the Certificate and the Taxpayer card by internet, mail or at a local office of RNPC. The forms should be signed by one of the future shareholders (or a proxy).
Before requesting the corporate name, it is possible to confirm on RNPC's database (also available on Internet) whether the requested name is available. It is also allowed to reserve a corporate name for 48 hours. The cost of the name reservation is €31. Homepage: http://www.dgrn.mj.pt (for questions related with RNPC, Notary and Registrar issues).
The name of the company to incorporate may be oficially given either by means of a certificate of approval of the company's name to be issued by the National Registry of Collective Entities (RNPC) or by the immediate choice by the shareholders of one of the names provided by the Portuguese Authorities for this purpose, which list is available on the Internet. If the company decides not to use one of the pre-approved company names, the company has to obtain a certificate of approval and a provisional taxpayer card from the Registro Nacional de Pessoas Colectivas (RNPC or The National Registry of Collective Entities (RNPC) issues the Certificate of approval of the company's name after completion and submission of the necessary forms. ). The certificate is valid for 180 days and may be renewed within designated time limits. The provisional ID card is valid for one year and can be renewed if the incorporation process has not been completed. Taxpayer Card can be requested at the same time as the corporate certificate.
Procedure 2. Incorporation and Registration of the Company at one-stop shop
Time to complete: 1 day
Cost to complete: EUR 360 or EUR 300 (depending on whether the company's object is IT or IT related or not), including mandatory publications but excluding a 0.4% Stamp Tax rate, levied on the amount of the company's share capital subscriptions
Comment: If the company chose not to use one of the pre-approved company names, the entrepreneur must submit the documents referred in 1 above. The shareholders who opt to incorporate the company within 24 hours will have to choose one of the standard articles of association available for the purpose, not being able of inserting different clauses therein. The commercial registration of the company is immediate and a certificate thereof is issued.
Shareholders may also file a Declaration of Commencement of Activities for tax purposes. If said option is not exercised, this declaration should be submitted within 15 days after the incorporation of the company.
Through this fast track procedure, the corporate taxpayer number of the company, the number of the company at the Social Security, the commercial register of the incorporation of the company and the declaration of beginning of its activity can all taken care on the same day in the same location (involving several windows).
The mandatory publications are made in a website of the Ministry of Justice (http://publicacoes.mj.pt/Index.asp)
More information on the new system "company one hour" can be found at http://www.empresanahora.pt/empresa.
Procedure 3. Register the company and all employees with the Social Security Regional Center
Time to complete: 1 day (simultaneous with procedure 2)
Cost to complete: no charge
Comment: Homepage: http://www.seg-social.pt/
This procedure can be conducted at the social security center's window at the CFE. It must be performed in 10 working days after the tax declaration on start of activity. Registration of a worker must be done at least 24 hours before start of employment. File ID taxpayer document, deeds, collective person's card, minutes of company inaugural meeting, a copy of statutory members' tax cards, and document proving declaration of commencement of activity. Companies that have interaction with the public must have the company's work schedule approved at the Ministry of Employment and Social Security (Ministerio do Emprego e da Segurança Social).
Procedure 4. Deposit the initial capital in a bank account
Time to complete: 1 day
Cost to complete: no charge
Comment: No subscriptions of share capital in kind are allowed under the fast track regime. Shareholders must deposit the share capital of the company with a bank, within 5 working days after the date of incorporation of the company.
Procedure 5. Communicate with the Supervisory Entity for working matters (IDICT)
Time to complete: 1 day
Cost to complete: no charge
Comment: The incorporated company, before starting its activity, shall declare the number of workers and managers at its service. It must also identify the place(s) where they work and timetable. Homepage: www.idict.gov.pt
Procedure 6. Stamp company books at the local Revenue Office
Time to complete: 1 day
Cost to complete: EUR 14 (x2) + Tax Stamp: EUR 0,50 for each page
Comment: All companies must have 2 books ("Inventário/ Balanço", "Diário/ Razão"). The cost is €30 per book, and there are 4 books. Alternative information is that the cost is €0.50 per page.
Procedure 7. Register Shareholders Meeting book at the Conservatória do Registo Comercial to get a termo de abertura and termo de encerramento (opening and closing statements).
Time to complete: 1 day
Cost to complete: EUR 14 + Tax Stamp: EUR 0,50 for each page
Procedure 8. Register the compulsory workmen's accident compensation insurance at a private insurer
Time to complete: 1 day
Cost to complete: no charge
Comment: The insurance covers all workers and managers who receive a salary. The insurance must be taken out contracted before the company's start of activity with a private insurer company. Social security does not cover accidents at work.
TAXATION
The national corporate tax rate in Portugal in 2003 was 30%, down from 34% in 1999, but the effective rate fell from 37.4% to 33% because municipalities are allowed to impose a corporate income tax up to 10% of the national rate. Most municipal corporate tax rates have therefore fallen from 3.4% to 3% with the decrease in the national rate. Reform legislation in 2000 had originally targeted a reduction of the national rate to 28% by 2003, but this was delayed. Allowable deductions in calculating taxable corporate income include depreciation, interest payments, executives' salaries, and royalties. Capital gains are taxed at 30%. Dividends paid to parent companies by subsidiaries (owned at least 25% by the payee) are excluded from taxable income to avoid double taxation. Otherwise dividends are taxed at general income tax rates.
The progressive personal income tax schedule has six bands, not including a tax-exempt base. The schedule bands for 2003 were 15% (up to €4,100); 14% (on the next increment of income to €6.201); 24% (on the next increment to €15,375); 34% (on the next increment to €35,363): 38% (on the next increment to €51,251); and 40% (on the increment of income above €15,375). Social security taxes amount to 23.75% of nominal income. There are also taxes municipal taxes on the value of real estate.
The main indirect tax is Portugal's value-added tax (VAT) introduced 1 January 1986 with a standard rate of 16%, which was raised to 17% as of 1 January 1995 and to 19% as of 6 May 2002. There is also a reduced rate of 5% (applied to basic foodstuffs, water supplies, books, newspapers and periodicals, social housing, some medical equipment and drugs, hotel accommodations, repair and domestic services); an intermediate "parking" rate of 12% (applied to some foodstuffs, catering, and some fuels and lubricants); and exemptions from VAT (for social services, some medical and dental services, waste collection and disposal, transportation services, gold transfers to the central bank, and cremation). For the Azores and Madeira, the standard VAT rate is 12%, the reduced rate 4% and the parking rate 8%. Other transactions taxes include stamp duties and transfer fees. |
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