CONTRIBUTION

INTEGRATING OUR DIFFERENCES...

FINANCIAL CONTRIBUTIONS

As detailed in CIRCLES, deposits need to be paid as soon as possible, so the pre-agreement sales can be done.

Depending on the number of people who are ready to contribute at this time, knowing that this is a huge act of trust and intuition, we will be able to follow up...

As we are different beings, with different profiles, qualities and skills... It is possible for someone who wants to hold more than one share, to do so, and later pass it on to someone who may be ready now to say yes, but may not have the full amount. Legally, this person will hold the quotes they are funding, until someone comes to retrieve their investment.

If some people need more time, or there is not enough people to cover the immediate expenses, this generosity will facilitate the process, at the same time guarantying that the person who pays now, keeps holding their shares legally until they are paid back.

Payments of deposit will be sent to a Portuguese bank account, that will be sent to you once you are clear that you want to be part of one of the circles.

This photo is a bit cliched but represents our differences and how they can come together...

VALUES & AGREEMENTS

The value of the property is 280 000 Eu, non-negotiable.

Deposit due at the time of signing pre-agreement sales is 28 000 Eu added to expenses incurred before for consultations, etc...

This deposit is not refundable if by any circumstances the buyer does not complete the agreement with final payment.

Final payment of remaining 252 000 Eu and all correlated expenses described below, is due t the latest 90 days after deposit, and has to be paid by bank transfer before the public registration of the land is signed.

All expenses of transfer of property are to be paid by the buyer.

PURCHASING PROCESS

Here the suggestions from a consultation with my accountant, for best set up the practical details for the purchase (considering) Portuguese bureaucracy, calculations of time may not be exactly what is presented…)

Best option is to set up a LDA Cia, which corresponds to an LLC in the USA
The company then will own the property and any of the business that may happen in the common ground (possibly events, Airbnb rental, farm products etc…)

HOW TO SET UP LDA CIA

The LDA is an association with quotes, set up as a private limited liability company having the share capital divided into “quotas” of at least 1 euro each.
It can be registered with only one person, but not recommended, as when others will be joining, the registration needs to change and more payments
There is no minimum capital requirement to set up an Lda company, but it must have a minimum of 2 quota holders.
Best to start registration with 2 or more people, but once it starts with 2 people, many more can be added with a simple paperwork between associates
To change partners, add or leave, can be done with an internal document signed by all partners (instead of having to go through re-registration of owners in new sales at each time that configuration may change)
The transfer of quotas is subject to registration with the Commercial Registry.
For Lda and SA companies, there is a standard official document, which allows for same-day incorporation and can be changed at any time by means of a relatively simple procedure. The use of a customized document on incorporation is not recommended as it leads to additional costs and a lengthier procedure.
Anyone with any nationality can be part of the LTD.
Foreigners from countries outside the Schengen, if not present in Portugal at the time of registration, will have to name a representative in Portugal to start the process giving power of attorney for the signatures etc
All partners need to have a NIF (fiscal number) in Portugal, and this can be obtained in person, or through a power of attorney given to someone who is a resident in Portugal or a lawyer
The LDA has to have an official accountant (costs below)
For Lda and SA companies, there is a standard official document, which allows for same-day incorporation and can be changed at any time with simple procedure. The use of a customized document on incorporation is not recommended as it leads to additional costs and a lengthier procedure.
This standard document for a regular LDA with 2 or more shareholders can contain 7 (simpler version, items 1-7) or 10 articles (extended version, addiction of items 8-10):

Format and name (to be chosen and registered)

The usual company name format in Portugal is “[NAME] – [Business Activity], [Extension]”, but the business activity component is now optional. As extension, a quota company must end its name with Lda

Registered office address (location of the property, in this case)
Business activity

It is necessary to indicate the main activity and additional activities (if any) including the Portuguese classification code.

What could apply to this property

_ Level 2 Code 01 Agriculture, farming of animals, hunting and related service activities

Level 3 Code 011 Growing of non-perennial crops
Level 4 Code 0121 Growing of grapes 5 01210 Growing of grapes
Level 4 Code 0128 Growing of spices, aromatic, medicinal and pharmaceutical crops
Level 5 Code 01280 Growing of spices, aromatic, medicinal and pharmaceutical crops
Level 5 Code 01491 Beekeeping
Level 2 Code 55 Accommodation
Level 3 Code 552 Holiday and other short-stay accommodation
Level 3 Code 553 Camping sites, including caravan sites
Level 5 Code 85593 Other education, n.e.c.
Level 1 Code R Arts, entertainment, sports and recreation activities
Level 2 Code 94 Activities of membership organizations

There are hundreds of other categories and that is not really important at this moment, but leaving info here as just researched and will need anyway later

Capital and quota holders (decision of how much will be invested in the start up and how many quotes)
Directorship (guidance for the way the business will be conducted)
General meetings (minimum once a year)
Board of directors
Additional Capital Contributions (mandatory up to twice the amount of the quota capital if so resolved by the quota holders)
Transfer of quotas (contingent to the permission of the company as having first preference option and existing quota holders having second option)
Redemption of quotas by the company in case of mutual consent, death of insolvency of the quota holder, or seizure of the quota.

Costs
Consultation with lawyer to write the status of association prior to registration. Cost depends on who we will chose, getting information of a lawyer in the area of the land instead of using the one I am working with in Lisboa. If we decide to do it alone online, may be possible and easier using standard forms and writing down our own status.
LDA registration around 500 Eu
Open bank account (costs relative to type of account)
Annual accountant 2400 Eu/year
One annual salary minimum 7920 Eu + SS for this person

At least one person has to be officially receiving a minimum salary of 660 Eu/month or more as a manager/director, this person has to pay SS in Portugal, best if it is someone already paying SS registered in Portugal, so not added to the costs of the company)

Support/information site

https://eportugal.gov.pt/en/espaco-empresa/empresa-online

COSTS & CALCULATIONS

Cost of property 280 000 Eu
Transfer taxes 15 000 Eu
Notary & land registration 1 500 Eu
Lawyer (title transfer execution) 3 500 Eu
Stamp duty tax 2 240 Eu

SUB-TOTAL 302 240 Eu

Set up of LTD company

Ltd company formation fees 5 950 Eu
Legal registered office fees 1 200 Eu
Corporate bank account opening (minimum amount) 5 000 Eu
Government registration 800 Eu
VAT registration 950 Eu
Project management fee 1 350 Eu

SUB-TOTAL 15 250 Eu

First year salary for admin & SS (yearly obligatory) 24 000 Eu
Annual accountant (yearly obligatory by law) 2 300 Eu

SUB-TOTAL 26 300 Eu

TOTAL 343 790 Eu

DEVELOPMENT

Phase One

Project to request permits to expand main house 13 000 Eu
Remodelling main house to 152 000 Eu
SUB-TOTAL 165 000 Eu

Note: this is a rough high estimate based on approximate costs given by the engineer, but it will depend on choice of materials, design, etc...

Water reservoir excavation and wall retention
for 2 rain water ponds 10 000 Eu
Land care & gardens 6 000 Eu
Decks & outdoors features 8 000 Eu
Cash flow for unexpected 10 000 Eu
SUB-TOTAL 34 000 Eu

TOTAL 233 000 Eu

Phase Two

Purchase pre-fab studios for time-share 4x 30 000 Eu 120 000 Eu
Support materials and tools for land 10 000 Eu
Vehicle 10 000 Eu
- TOTAL 140 000 Eu