who we are

Finpartner is a company specialized on accounting, tax and consulting services on a national and international level. The presence of Finpartner is not only focused on national and international companies, but also on individuals, always providing the best accounting, consulting and tax services, responding to all the challenges that the economic and fiscal situation requires.

Integrity and Listening to the Growth of efficiency clients's needs your business Structure

1. Setting up a business activity in Portugal 1.1 Companies i. Important Information ii. Steps iii. Advantages vs Disadvantages 1.2 Independent Workers i. Important Information ii. Steps iii. Advantages vs Disadvantages 2. Summary 1.1. Setting up as a company – Important information

Requirements for setting up a company: A company owned by an individual who is the owner of the capital injected in the Establish the company’s capital ( > 1€) business. In this situation, unlike the ENI, the owner is considered a separate entity from the business and so is not held liable for any A portuguese bank account for the sole debts surrounding the company, meaning purpose of the business the owner’s personal estate is protected. Appoint a certified accountant (‘TOC’ official) Specific licenses and/or certifications 1.1. Setting up as a company – Important information

There is a series of steps and fiscal obligations involved in the creation of a company.

Some Fiscal Obrigations: IRC Tax on the company’s income is calculated on the taxable - Issuance of invoices; income, minus deductible benefits and deductible tax - Accounting bank movements; - Analysis and accounting of expenses; Rate: 17% or 21% for small and medium-sized companies - Issuance of tax payment slips; - Quarterly VAT submissions, along with ‘recapitulativas’; - RFI-21 Model; SS - Model 30; The Social Security tax in Portugal is called TSU - Emission and signing-off of Financial Statements; - Submission of IES report; Rates: 23,75% + 11% on behalf of the employee - Submission and payment of IRC. 1.1. Setting up as a company – Important information

EXPENSES

• Overall expenses – all expenses incurred for business purpose must be paid on the company’s bank account and have a valid supporting document.

• Travel and accommodation – Expenses in respect of commute, accommodation and meals for the company’s employees, when travelling for business purposes. Valid travel and accommodation expenses are fully allowable.

• Representation expenses – These are costs incurred as a result of receptions, meals, trips, both in Portugal or overseas, offered to clients or other entities. Representation expenses have an added tax charge of 10%. 1.1. Setting up as a company - Steps

1st step: Tax Registration number 2nd step: Declaration of start of activity

Create the company at the ‘Conservatória do You must declare the Start of Activity status, no later than 15 days Registo Comercial’, moment in which you from when the company was first established at the will choose the name of the company, ‘Conservatória do Registo Comercial’. address and the tax registration number (NIF) will be generated and provided. Online, either by the owner of the business or a Chartered Certified Accountant .

In order to initiate the business activity, the following must be submitted: ∙ Permanent Status Certificate; ∙ Bank details of the portuguese bank account; ∙ Declaration of Commencement of Activity; ∙ Passport of the owner of the company; ∙ Passport of the certificated accountant. 1.1. Setting up as a company - Steps

3rd Step: Social Security registration

At this point, make sure you fully The registration for Social Security must be submitted within the understand the financial and tax obligations 10 days following the declaration of the start of activity. inherent to the company’s business activity. Required documentation: 1. Declaration of start of activity; 2. Permanent Status Certificate; 3. Identification documents from both the business’ managers and the appointed Certified Accountant; 4. RV 1006 Model; 5. At a later date, the RV 1009 forms must be submitted along with the respective employment contracts, so as to communicate the salaries paid to employees. 1.1. Setting up as a company – Advantages vs Disadvantages

Advantages

• The owner is not personally liable for the company's liabilities; • There is no minimum requirement in terms of amounts to be injected into the social capital of the company; • All expenses are deductible from the taxable income, provided they meet the necessary requirements; • Potential for VAT deductions; • Other partners may enter the business; • The tax is calculated on profit and not the revenue figure.

Disadvantages

• Higher level of bureaucracy; • Costs with the certified accountant; • Not eligible for certain tax benefits. 1.2. Independent Workers – Important Information

Independent Workers exercise their business activity without an employment contract, or similar legally-binding contract, or offer others their service.

Only provides services;

Significantly less bureaucracy;

Lower costs at set up stage. 1.2. Independent Workers – Important Information

Fiscal obligations

• Social Security contributions are mandatory, unless exempt, and must be submitted on a quarterly basis;

• IRS - tax on the income of individuals -, the calculation of which can be done through 2 different methods: ○ Simplified Accounting - taxable on 75% of revenue; ○ Organised Accounting - difference between profit & losses.

• VAT (Value Added Tax), except if eligible for exemption. If required, the individual must charge VAT on the rendered services but will, in turn, be allowed for deduction. ○ VAT Exempt – revenue < 12,500€ (in accordance with article 53 of CIVA) 1.2. Independent Workers - Steps

Requirements for all independent workers: Requirements for those under the Organised Accounting method only:

- Declaration of Start of Business Activity; - Quarterly validation of business-related expenses; - Identification Document of the owner; - Accounting of the expenses incurred for business - Portuguese Bank Account; purposes; - Social Security Registration; - Appointment of a certified accountant; - Quarterly submission of Social Security and payment of the - Own a bank account solely for the business activity and respective Social Security contributions; account for all movements; - Issuance of invoices; - Production and signing-off of Financial Statements; - Quarterly VAT submissions and the respective ‘recapitulativas’; - Submission of IES Report. - Submission of IRS; - Model RV1000-DGSS; - Model 30; - Model RFI-21 and Residency Certificate. 1.2. Independent Workers – Advantages and Disadvantages

Advantages • Simple and straightforward process ; • No minimum capital requirement; • Absolute control over the business; • Possibility of opting for the simplified accounting method and being eligible for VAT exemption (if revenue < 12,500€) • No need for accounting costs, if under the simplified accounting method; • Social security exemption in the first year of trading.

Disadvantages • No legal separation between the business and personal estates, meaning the individual is fully liable for the business’ liabilities; • Higher difficulty in raising finance from exterior sources; • The tax is calculated on the revenue figure, regardless of how much was actually spent. 2. Summary

Notes to take with you

There are essentially 2 separate ways of initiating an activity in Portugal: as a company or as an individual, independent worker; ✔ Steps for setting up a company: 1. Obtain a Tax Registration number 2. Declare the Start of Activity 3. Register for Social Security ✔ The process for starting trading as an independent worker is as follows: 1. Obtain a Tax Registration number 2. Declare the Start of Activity 3. Register for Social Security ✔ The process for starting trading as an independent Submit form Mod. RV1000-DGSS ✔ The creation of a company implies a higher level of bureaucracy and associated costs, when compared to independent workers. However, in the first instance, the personal estate of the business owner is safeguarded from any debts the company might incur. ✔ There are both advantages and disadvantages for each option. For this reason, it is imperative that the dimension, predictions and other aspects of the business are taken into account before making your choice. As such, it is strongly advised that you discuss the matter with a professional who will be able to recommend the best course of action for yourself and your business. Count on Finpartner to help you every step of the way!

Ana Filipa Sá [email protected] IT.03 V1 Special Tax Residence & Residence Visas in Portugal Non-Habitual Resident Regime In Portugal

REQUIREMENTS:

1. Not having been qualified as a tax resident in Portugal for the past five years;

2. Be regarded as a tax resident in Portugal, by:

a) Staying more than 183 days, consecutive or interpolated, in any 12-month period commencing or ending in the year concerned; or,

b) Having remained for less time, having in Portugal, in some day of the 12-month period, housing conditions that allow to assume a current intention to maintain and occupy the property as a habitual residence. Taxation for a Non- Habitual Tax Resident

. Generally without any tax (0% tax) on dividends, interests, royalties, capital gains on real estate property as well as foreign-sourced real estate rents; . 20% tax rate on professional income resulting from high added value activities exercised in Portugal (e.g. a Director of a company in Portugal, etc.);

. 10 % tax rate on foreigner pensions; . Income from tax havens is taxed in Portugal (at a 35% tax rate);

. Approval of the non-habitual tax resident request within 24-48 hours; . The regime is applicable for 10 years;

. There is no inheritance tax. . There is no gift tax between parents and children (in the blood line) nor between spouses (10% tax on gifts between other parties). FOREIGNER-SOURCE INCOME TAXATION IN PORTUGAL Dividends 0% Interest 0% Royalties 0% Private Pensions 10% Public Pensions 0% Capital Gains 28% Capital Gains from real estate 0% Rental income 0% 28%. In case of redemption: Taxation for a a) If held for more than 5 years: 22,5% Unit-linked Non-Habitual b) If held for more than 8 years: 11,2% If it qualifies as: Tax Resident a) Interest/dividend: 0% SICAV/SICAF b) Capital gains or other capital income: 28% The Golden Visa Programme

• The Golden Visa is an immigration program that grants the residence right through one of the following types of investment:

• Real estate acquisition with a value over 500.000 Euros;

• Capital transfer with a value over 1.000.000 Euro;

• Real estate acquisition of a building with, at least, 30 years or located in an area of urban renewal and performing of rehabilitation works.

• Capital transfer in the amount equal or superior to 350 thousand euros for the acquisition of units of investment funds or venture capital, dedicated to the capitalization of companies. StartUP Visa

. StartUP Visa is a residence visa for non-UE- startup founders who want to be part of one of the fastest developing startup communities in Europe.

. The program requires the entering into of an incubation contract with an incubator entity, previously approved and certified by IAPMEI, that will receive the entrepreneur and support the development of his Startup in Portugal. Who can apply: a) Entrepreneurs who wish to develop their entrepreneurial and / or innovative project in Portugal, even if they have not set up a company; b) Entrepreneurs who already have business in the origin countries (in a starting phase, created less than 4 years ago) and intend to move their activity to Portugal, evidencing to have:

• The potential to create at least 5 jobs within 24 months; • Executive functions in the company and / or a capital participation in the act of constitution or voting right, of at least 10%; • A positive net result in the company's last fiscal year accounts. Tech visa

Company certification program to grant the residence right to third country nationals willing to develop a highly qualified activity in Portugal.~

This program is available to all companies that develop their activity in Portugal and need to employ workers from third countries with specialized, exceptional or appropriate skills to carry out the corresponding activity. The requirements:

I. Market potential and II. Guidance to external markets. Regarding the requirements to be fulfilled by the workers, the exercise of an highly qualified activity must be shown through the fulfillment of the following requirements: • Possess a minimum level of qualification of level 6 according to the ISCED-2011; • Employment contract or promise of employment contract with a minimum duration of 12 months; • Monthly salary equivalent to 2.5 times the Social Support Index; • Proof of language skills on Portuguese, English, French or Spanish. Residency for entrepreneurs

The process is filed at the Portuguese Embassy / Consulate in the country of origin or residence with: • Proofthat the applicant has income that guarantees economic subsistence in Portugal; or • Proof that the applicant is retired and the amount of retirement is enough to live in Portugal.

A valid four-month visa is granted that allows you to enter Portugal and apply to the SEF for a residence permit, which is awarded for 1 year and renewable every 2 years. CONTACT US

we are based in

Lisbon, Portugal

Address. Rua Castilho, 39 – 15º 1250-068 Lisboa, Portugal Phone. +351 213 717 000 Porto, Portugal Faro, Portugal

Email. Address. Address. [email protected] Rua Augusto Rosa, 79 R. de Santo António, 2A – 1º 4000-098 Porto, Portugal 8000-283 Faro, Portugal Phone. Phone. Other offices +351 220 185 568 +351 289 102 458 in Portugal Email. Email. [email protected] [email protected]