ON JANUARY 1, 2006, new rules regarding the simplification of incorporating and registering a company in Portugal will come into effect on a general basis. Until then, an experimental application of these rules, which began on July 13, 2005, has been put into practice.
The new law sets out a process that allows the immediate set up of sociedades anónimas (PLCs) and sociedades por quotas (limited liability companies) and introduces important changes to the legislation that regulates these matters.
The Government’s idea is to take away some of the bureaucracy and increase the efficiency and reaction speed of the Commercial Registry Office, in order to promote the competitiveness of Portuguese companies and indeed the Portuguese market, making it attractive to foreign investment. The legislation also includes an incentive, in the form of a reduced registration fee, for the incorporation of companies whose main activities are in the fields of technology, research or development. The idea is to clearly promote the development of the Portuguese economy in the technology and research sectors.
In relation to the setting up procedure itself, it should take one day to incorporate a company.
The interested parties have to provide proof of their identity, as well as their representative capacity, and have to provide the necessary share capital, a declaration of commencement of activity that can be obtained from the tax office, and the company’s articles of association.
The authority will conduct all the other necessary formalities, such as certification of signatures, making a note of the registration request in the diary, and registering the company in the central company file. It will also deliver the company’s articles of association and respective registry certificates to the company representatives free of charge, as well as receipts for any amounts paid.
All announcements will be undertaken by the services, and they will also inform the public authorities of the incorporation of the company, via internet. All future company acts that require publication will be done so by the company on a public internet site.
There have been two significant changes made to this legislation.
In the first place, the fact that the entire procedure takes place in one day before one single entity: the Companies Formalities Centre (CFE).
Secondly, a vast majority of the steps to be taken in setting up the company are done via the internet, making the process simpler and swifter. These changes aim to replace the traditionally long and drawn out process where approval was slow in coming, and the interested parties were forced to go through several different public departments.
In this way, the Portuguese Government hopes to provide greater competitiveness by reducing bureaucracy and allowing the quick setup of companies. This is important within the integrated European market as well as the global market, where quick reactions from the public authorities are essential to guarantee greater productivity and to keep up with today’s marketplace demands.
Pedro Ghidoni de Pina
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