When we refer to migration, we invariably associate it with individuals and not with companies. However, it should be noted that corporate migration exists, and it is increasingly common to see foreign companies migrating to Portugal.
In this context, the first question to be asked is why Portugal?
Portugal offers, to attract and foster foreign investment, among others, access to an ecosystem of start-ups and competitive companies; government support and incentives such as the Non-Habitual Resident Program; the increasing existence of highly qualified workers (at an affordable cost); security; access to the European market and the mild climate is very attractive.
Applicable to all means of business migration to Portugal is the need to select the type of company that will be formed, as this choice will influence the legal regime applicable to the company. The main types of company are:
- Companies limited by quotas (LDA.),
- Companies limited by shares (S.A.) and iii) Single Limited Company by Quotas (Unipessoal, Lda.).
The latter differs from the former in that, by law, the share capital is wholly owned by a single person/company. The former can be owned by several people and there is a legal minimum of 5 shareholders in the case of Companies limited by shares. Unlike Companies limited by shares, in Companies limited by quotas, the capital is divided into “quotas” (and not in shares) and the legal minimum amount of share capital is €1.00 per quota (and not €50,000.00).
Having said that, let’s look at the mechanisms to incorporate a legal person in Portugal.
The first option is to set up a company from scratch. We start with this option because the others end up deriving from this one. The first step is to gather the necessary documentation which must always be duly legalized and translated into Portuguese. The incorporation of the company itself can be done, quickly and without bureaucracy, through the online service “On the Spot Firm” by the legal representatives, namely the lawyers with power of attorney. In this second phase, the name of the company is chosen from a list of pre-approved names or, alternatively, provided with a certificate of admissibility previously requested to the Portuguese commercial registry services. Then, it is necessary to appoint the company’s partners, managers and accountants, who must all be holders of a Portuguese taxpayer number. Finally, the company’s articles of association are produced from pre-approved models according to the legal form of the company, which must be formalized by completing the company’s commercial registration at the Portuguese Commercial Registry Office. With this last step, the company will be assessed and validated by the Portuguese registry services, which will issue the certificate of commercial registration once it has been formally established.
Naturally, some final procedures will still have to be fulfilled such as the payment of the share capital (in case it has not been previously paid up), the opening of the bank account, the declaration of commencement of activity with the Tax Authority, the social security registration of the company’s managers and the declaration of the beneficial owner; but these procedures can be carried out after the company has been incorporated.
The second option is to open a branch of an existing company in a foreign jurisdiction through the “Branch on the Spot” procedure. Essentially, the process is the same, but with more attention being paid to the attachment of documentation attesting to the existence and legal capacity of the foreign parent company. This validation is carried out based on the presentation of the identification document of the applicant; the document that grants powers of representation for the creation of the branch (minutes of resolution or power of attorney); the document proving the legal existence of the parent entity; the updated memorandum or articles of association of the parent entity and the resolution approving the creation of the branch.
Finally, it is possible to opt for the transfer of the entire company to Portugal while keeping its entire corporate governance structure. The procedure is essentially the same as for the incorporation of the branch, however, the migration of a company to Portugal, meaning, the transfer of the head office and corporate bodies to Portugal, depends on the law of origin permitting such action. For this reason, the main document that must be provided when making this decision is a certified copy of the respective law, which establishes the admissibility of the transfer of the registered office to another country. In addition to these documents, the existence of the original company must be proven, as in the case of the branch, by means of, among other things, a document proving the legal existence of the original entity and a certified copy of the resolution approving the transfer. The procedure is then equivalent for the incorporation of a company from scratch and includes the approval of new by-laws under Portuguese law and the approval of the company’s name by the Institute of Registration and Notary Affairs.
Thus, we conclude that, in fact, it is quite simple to migrate companies to Portugal and it can even be done in one day.
In this context, we estimate that the interest in the incorporation of an entity in Portugal increases not only because of the ease and speed of procedures but also because of government incentives to receive foreign capital that strengthens the national economy.