The purpose of this article is to explain the steps involved in incorporating a new company through International Business Center of Madeira (IBC). Companies operating under IBC greatly benefit due to the incentivized tax system of the European Union(EU). In addition to the benefits above, companies also enjoy the benefits of a stable political and social environment in Portugal.
The steps involved are as follows:
Choosing a company’s structure
Decide on what type of company to be formed. There are different types of companies and the most popular forms are, Public company (S.A) and Private limited company (Lda).
Company name approval
The company owner(s) should request with the National Registry of Legal Persons (RNPC – Registo Nacional de Pessoas Collectivas) through a form or via online for company name’s approval.
The request consists of:
- An already available name with RNPC or Three names that are provided by the company owner’s in the descending order of their preference.
- An accurate description of the business that the company will perform in Portuguese (also called Company Object).
Once the request is submitted and accepted, the Business name admissibility certificate is valid for 90 days.
Capital contribution and partnership agreement
The owner(s) of the company should open a bank account under the name of the prospective company and sign a partnership agreement which defines the rules that govern the company. The partnership agreement also called as the memorandum of association should be signed by all the members of the company.
Registering the company
This is the one of the most important and crucial steps. During this step the company should submit the following:
- Company name approval.
- Partnership agreement.
To Registry of company’s office. This should be submitted within 60 days from the date of the memorandum of association entered into.
Start of business activity
The start of business for fiscal purposes establishes the declaration of commencement of trade which is to be submitted to the General Tax Directorate and the form can be obtained at the local tax office. In order to obtain the declaration of commencement of trading we will be needing:
- Filled form no 1886 (INCM) in triplicate. The form must be filled and must be duly certified.
- Certificate of incorporation.
- Photocopy of memorandum of association.
Registering with Portuguese social security:
This step should be done within 10 days from the date of start of business activity. This step registers both the company and its employees as contributors to Social Security. The following documents are needed for this step:
- Legalized copy of the memorandum of association.
- Certificate of Incorporation.
- Meeting minutes that shows the appointment of members of companies board and their financial structure.
- Photocopies of national ID and taxpayers cards of the members of the companies as per the meeting minutes.
- Declaration of start of business activity.
In addition to forming a company, it is also possible for existing companies registered with International Business Center of Madeira can form a branch. The branch needs to be registered with the Commercial Registry Office. In order to do so, the following documents will be needed:
- Incorporation documents of parent company.
- Power of attorney.
- Authorization from current board of directors of parent company to open a branch.
In conclusion, setting up a company in Portugal involves a fair amount of paperwork, however the process itself is streamlined as outlined above in this article.