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Portugal Sees Record-breaking Number of New Companies in 2019
The number of new companies in Portugal continues to grow, says a recent analysis published by Informa D&B on the Portuguese business demographic in 2019. Over the course of the year, 48,854 companies were created, a 6.4% increase in comparison to the 2018 figure.
Evolution of the new company growth rate
An analysis divulged by Informa D&B at the start of this month reveals that this is the third consecutive year in which the total number of new companies in Portugal has grown. In 2018, the total number of new companies was 45,191, a considerable increase in comparison to 2017, which saw the creation of 40,326 new companies.
In fact, since 2012 the healthy business dynamic has been a constant in Portugal; only in 2017, when 956 fewer companies were created than in 2016, was there a slowing down in the number of new companies.
New companies by sector
It is old news that Portugal is becoming a hub of entrepreneurship and that the country’s business dynamic is flourishing. In its conclusion to its 2019 analysis, business analytics consultancy Informa D&B says that the emphasis is on the “big increase in the number of new companies” that are very small in size, the “pulverisation of the business fabric” and the “change in the sectors seeing the highest number of new companies”.
Indeed, contrary to what had been the case in more recent years, when the tourism, catering and property segments largely accounted for the growth in new companies, in 2019 it mostly occurred in transport and construction. Another highlight is the IT sector, which grew by 3% in 2019, (practically double the 2010 figure and certainly the highest in the last 10 years).
The importance of entrepreneurship
Portugal has invested heavily in dynamising entrepreneurship and the results are there for all to see. Apart from the hugely important role in revitalising the Portuguese economy in the aftermath of the crisis, the creation of an ecosystem propitious to the birth of new companies has made it possible to attract entrepreneurs from the four corners of the globe. As a result, the Portuguese business fabric has been rejuvenated and modernised, affording unique opportunities for the many talented professionals operating in Portugal.
Entrepreneurship centres, co-working spaces, funding and investment programmes, and university-run technology hubs and start-up support facilities are sprouting up all over the country. And all of this is sustained by a strong commitment on the part of the government to dynamise entrepreneurship and attract foreign investment to Portugal.
How to open a company in Portugal
One aspect of this commitment is the drive to simplify procedures and cut red tape in Portugal. In fact, it is possible to open a company in Portugal quickly and easily (in about 55 minutes) at a single service desk. This service is called “Empresa na Hora” (“On-the-spot Company”) and can be used to open private limited companies, single-shareholder limited companies and public limited companies.
In this process, which can be done at Commercial Registry Offices and/or Commercial Registry service desks in CFEs (Centro de Formalidades de Empresas = “Business Formality Centre”), partners must choose a name and a model memorandum of association for their company from a list of pre-approved names and models that will be given to them at the “Empresa na Hora” desk. The partners must go to the “Empresa na Hora” service desk in person, taking with them the identification documents required for natural or legal persons, as applicable.
The company documents are drawn up on the spot and the Registration Certificate, Memorandum of Association, Legal Person card and the company’s social security number are handed over immediately. The new company gains instant access to an internet.pt domain and immediate membership of an Arbitration Centre. The start-up statement, properly filled in and signed by the certified accountant, must be handed in at the time of incorporation or within 15 days, and the share capital must be deposited within the next five business days.
Although this process is fast, it is also somewhat restrictive (it does not allow entrepreneurs to use a company name they have thought up themselves, and the model memoranda of association are very limited, among other disadvantages). Consequently, entrepreneurs wishing to open a company in Portugal often prefer to use the conventional process. The reality is that, with the reduction in red tape and the implementation of e-government systems, it does not take long to set up a company that meets the entrepreneur’s best interests and objectives. Under the normal regime, the first step is the approval of the company’s name and business purpose.
The application can be made online and the certificate of admissibility of the name generally takes no more than two days (after approval) to be issued. The next step is the signing of the articles of association, certified in person, by all the partners or their representatives. Once the articles of association have been signed, the act must be registered at the competent Commercial Registry Office (this registration may be requested online). The Registry Office will apply for its publication. The time needed to obtain the Registration Certificate depends on each individual Registry Office but, on average, it takes three business days.
Thereafter, the Start-up Statement, properly signed by a certified accountant, must be sent to the Directorate-General for Taxes, the company and its employees must be registered with Social Security, the company minutes book must be obtained, a bank account opened... And in some cases it will also be necessary to license the company’s activity.
NEWCO has a multi-disciplinary team of managers, legal consultants and certified accountants with over 30 years’ experience in setting up companies and providing support in management, accounting and the fulfilment of company tax obligations in Portugal. If you are thinking of living in Portugal, you can also count on our services at every stage of moving and settling in here. Learn more about Companies in Portugal or contact us to find out how we can help.