[ESTABLISHING A BUSINESS ENTITY IN PORTUGAL] 393
ESTABLISHING A BUSINESS ENTITY IN PORTUGAL
I. INTRODUCTION Portugal has circa 10,4 million resident inhabitants and most of its population lives in sunny coastal areas. Important cities include the capital Lisbon, Porto (in the north), Coimbra (in the center), Faro (in southern Algarve), as well as Ponta Delgada (in the Azores) and Funchal (in Madeira). Portugal is a Republic since 1910, having in force the same Constitution since 1976. The President, the Parliament, the Government and the Courts are the representatives of the sovereign country, and both the President and the Parliament are chosen through general democratic elections. The Government is normally formed by the party who wins the election for Parliament. The Constitution separates the Legislative power, which is generally attributed to the Parliament, the Executive power, which lies with the Government and the Judicial power, which is left to the Courts. Portugal entered the European Union in 1986, is part of the Schengen area and adopted the Euro since its creation, as result of an integration process which last milestone is the Treaty of Lisbon, benefiting from the European Single Market and its four freedoms: goods, people, services and capital. Portugal is also a founding member of the Community of Portuguese Language Countries, the international organization that aggregates all Portuguese speaking countries. Portuguese main industries include tourism, seafare economy, forest, petrochemistry, cement production, automotive, electrical and electronics industries, textile, footwear, furniture, beverages & food industry, leather & cork. Pharmaceutical, IT, renewable energies and aerospace industry are strong emerging sectors.
With modern infrastructures and technologies, Portugal is nowadays a business-friendly jurisdiction, and a solid platform to invest in Europe and in Portuguese Language Countries, most of which are emerging countries with vast natural resources, such as Brazil, Angola, Mozambique and East-Timor. II. TYPES OF BUSINESS ENTITIES II.1. General Considerations and Company Types The basic legal framework on Portuguese corporate business organization is codified in the Companies Code (“ Código das Sociedades Comerciais ”), the Commercial Registry Code (“ Código do Registo Comercial ”), the Securities Code (“ Código dos Valores Mobiliários ”), the Commercial Code (“ Código Comercial ”) and the National Companies Registry Office Legal Regime (“ Regime Jurídico do Registo Nacional de Pessoas Coletivas ”). There are five different types of commercial companies in Portugal: the public limited liability company (by shares – “ sociedade anónima ”), the private limited liability company (by quotas – “ sociedade por quotas ”), the partnership (“ sociedade em nome colectivo ”), the limited liability partnership (“ sociedade em comandita simples ”) and the limited liability partnership with share capital (“ sociedade em comandita por açõe s”). The first two types of companies are by far the most common, while the last three have proven to be less flexible and generally inadequate for modern business needs. II.2. The Public Limited Liability Company (PLC) As previously mentioned, the PLC (“ Sociedade Anónima ” or “ S.A. ”) is one of the two most common investment vehicles used in Portugal
ILN Corporate Group – Establishing a Business Entity Series
Made with FlippingBook Ebook Creator