The company constitution is regulated by the Commercial Companies Code by Decree - Law No. 262/86 and by the Notary Code by Decree - Law No. 207/95, and must start with the admissibility certificate.
This is composed of the company's application approval for a firm or denomination kind and the first presentation object and economic activities presentation related to the company. There is a list of CAE (economic activity code) in which the company must indicate a primary CAE, up to three secondary CAE.
Once notified the admissibility certificate for the company name, will be necessary to open a bank account destined exclusively to the company. The company's share capital can be paid at the time of incorporation or until the end of the fiscal year. At this moment, it's necessary to register the constitutive act at the Commercial Registry Office.
The next step is to open an activity registration in Finance institute. The company by partnership quotes type must be included in the organized accounting regime, requiring the support of an official accountant. Organized accounting is the most efficient tax regime for the most complex activities and when the expenses with the activity are higher than 25% of the specific ones. It is important to note that under this regime it’s possible to deduct a large part of professional expenses, such as fuel, work-stays, computer equipment, and to strictly evaluate liquid revenue.
Also, Social Security must be informed about the members, employees, and managers behind the company to set the appropriate social contributions.
A foreign company that wants to operate in Portugal can do so through a subsidiary or permanent representation, in the kind of a branch.
A subsidiary branch is a company governed by Portuguese law which, like any other company found in Portugal, it's independent of the holders. Subsidiary branches have their own legal personality, so they are legally distinct from the companies among the corporate group, just as their assets are autonomous from those companies.
This means, in practical terms, that in case of lawsuits or liability to third parties, the responsibility falls over the company found (the subsidiary branch) and not on its partners.
Normally, the subsidiary branch constitutive shared capital is held mainly by the mother company, which allows it to exercise a dominant influence, either because it holds a majority stake in the capital, even because it has more than half the partnership votes, or either because they can designate more than half of the management body members.
The subsidiary branch based in Portuguese territory is considered as a local company, that is why it's subject to commercial legislation, namely the Commercial Companies Code and the Commercial Registration Code. Therefore, there is no difference between the constitution of a subsidiary branch of a company mainly based on another country, and the constitution of a genuine local company for tax matters concerns, being both subjected to a corporate income tax, as well as to the other taxes to which all national companies are responsible for.
As a company established according to a regular national company, a subsidiary must respect all the constitution process stages: application for name admissibility, constitutive capital payment, operational activity declaration at the Finance Institute, and declaration suited to Security Social.
It should be noticed that, regardless of participation over the shared capital, money transactions between the branch company and the partnership company, can only occur in the following situations:
Commercial activity between both that must follow the transfer pricing discipline, provided for the Corporate Income Tax Code (Corporate Income Tax);
Distribution of results for partnership company (main company), withholding tax at a rate of 25 over the earns. For this matter, still an International Convention between Brazil and Portugal to avoid double taxation.
On the other hand, a chain store/office of a foreign company does not have its own legal personality, being a legal extension of the entity it represents. It is a permanent establishment or a permanent representation, having totally or partially the same activity of the foreign company, under the guidance of its management body, although may have some autonomy through a local manager legally designated.
In order to start its business, it follows a different path different from the company local branches. The main company must proceed with its registration in the National Register of Legal Persons of its chain store, which will assign a legal person identification number (NIPC) and, after that registration, it must request the commercial registration in the Commercial Registry Office in the respective area where the chain store or office is going to be located.
For the chain store or office registration, it's necessary to exhibit a certificate about the legal existence of the main company, the respective social conventions (statutes), and a document that appoints not only the location of the chain's establishment but also the nominates the legal representative.
For accounting matters, all movements recorded in the chain office or store accountability must be reproduced in the main company's records. While, for tax reasons, it is worth noticing that, in order to avoid double taxation, it's relevant to appeal to the International Convention between Portugal and Brazil to set which country is responsible for taxing the different income records, dispensing what have being taxed in Brazil to be double taxed in Portugal.