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On the Spot Firm
Portuguese Institute of Registries and Notary
Portugal

The Problem

Until 2005 the average time which took to create a commercial company in Portugal ranged between 30 to 45 days. The incorporation procedure began with obtaining a license to use a particular name for the company, followed by the deposit of the share capital, and ended with the drawing-up of a public deed. Later, this public deed had to be registered in the Commercial Register Office of the company's registered head office, which in turn promoted its publication in the Portuguese Official Gazette (in paper), being responsible, later on, for the Company's registration in the Revenue and Social Security Office.
Considering that companies, in Portugal, take on, in the most part, the legal form of commercial company, such incorporation procedure had an obvious negative impact in the economic development.

Solution and Key Benefits

 What is the initiative about? (the solution)
The major advantages resulting from the implementation of this service are:
- significant reduction of time required to legally incorporate a company (currently the average time required for that purpose is approximately of 45 minutes);
- reduction of the number of dislocations and interactions with Public Administration services, since with this service it only takes a single dislocation to one registry service, responsible for the selection of the company name, preparation of the Articles of association, commercial registry, communication and registration of the company formed in the Revenue and Social Security Office; and
Elimination of the discrepancy between the information available, regarding the same entity, in different Administration departments, avoiding that incorporated and registered companies aren't declared in the Revenue and Social Security Office, as well as the opposite situation.

Actors and Stakeholders

 Who proposed the solution, who implemented it and who were the stakeholders?
The solution proposed by the Justice Secretariat of State, which equally created the legal basis for its implementation.
The solution was implemented by the Portuguese Institute of Registries and Notary
As entidades que participaram na implementação deste serviço foram:
The entities which participated in the implementation of this service were:
- Portuguese Institute of Registries and Notary (IRN, I.P);
- Portuguese Institute of Information technology in Justice (ITIJ, I.P.);
- Portuguese Government Tax Office (DGCI);
- DGITA;
- AMA- Agency for Administrative Modernisation.

(a) Strategies

 Describe how and when the initiative was implemented by answering these questions
 a.      What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
The strategy for the implementation of the on the spot firm (ENH) service was outlined by the Justice State Secretariat and executed by IRN (Portuguese Institute of Registries and Notary). The initiative came from the Justice State Secretariat which promoted several meetings with professional categories and business associations to define their needs in the justice area. Once settled that the issue of the length of the incorporation procedures of companies was one of the most relevant and strategic issues a new model of creation of companies was planned, without jeopardizing legal security, capable of reducing, significantly, the time needed for all the procedure.
The new ENH incorporation procedure was based on information technologies, having been developed, for the purpose, a support software and a site where the mandatory official publications are carried out. From a legal point of view a specific status was created which legally regulates and binds the incorporation of companies by this means.
The implementation in the field of this service started with a set of six pilot services prior to its expansion and today, this service is available in 199 services throughout Mainland Portugal and islands.

(b) Implementation

 b.      What were the key development and implementation steps and the chronology? No more than 500 words
With respect to the project’s development, it involved the following stages:
1- Determining this project’s goals, including the advantages to integrate in the project;
2- Identifying the several problems to solve in order to reach the goals set;
3- Contacts with DGITA/DGCI;
4- Application developments and creation of Web services;
5- Legislative changes to cover these solutions;

This whole development procedure took close to three months. Regarding the implementation stage it included an experimental period, in six services, and has been expanded to close to twenty five services per year, with preference to services with more business transactions. The implementation had a specific training period of fourteen working days, carried out in situ within the service where the ENH was available, and in addition to granting the officers providing this service with technical and legal knowledge necessary to use the application, it also aimed to make officers aware of its social and economic importance.

(c) Overcoming Obstacles

 c.      What were the main obstacles encountered? How were they overcome? No more than 500 words
The bigger obstacle consisted in the resistance of several Public Administration services involved in the project on changing their procedures.
This barrier was overcome by two ways:
- Resistance on behalf of external services to the Ministry of Justice was conquered with a strong commitment to a political level which even included significant legislative changes;
- Internal resistance was conquered by intensive training courses which preceded each opening of a new ENH counter;
- the adhesion to the service was ensured by means of dissemination activities carried out before the professional classes especially associated with the formation procedure of companies (Lawyers; Solicitors; Notaries, certified accountants); associations representative of economic activities and also teaching institutions with law courses.

(d) Use of Resources

 d.      What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
The ENH service was designed and developed by the Public Administration’s own resources, having been created for the purpose a work group with close to four elements, and appointed a Head of Project, who together with a group of trainers, became responsible for the implementation of the project in the field.
IT developments for launching the service cost close to 200 thousand EUR.

Sustainability and Transferability

  Is the initiative sustainable and transferable?
The initiative is sustainable, as proved by the fact that it is already five years old and continues to be the main way to incorporate companies in Portugal (close to 65% of the Portuguese companies are constituted through this way).
Regarding the possibility of “exporting” this model of incorporation of companies, it is perfectly transposable to other legal realities, a fact proven by:
- the great interest of several countries who want to learn more about ENH, a reality particularly well demonstrated by the increasing number of delegations coming to Portugal for that purpose;
- the availability of services strongly inspired in the ENH in countries as Angola and Uruguay.

ENH won the European Enterprise Awards 2006, granted by the European Commission, in the category of bureaucracy reduction and with this project Portugal was considered a “Top Reformer”, by the World Bank, in the report “Doing Business 2007”.

The World Bank’s Report, “Doing Business 2011” mentioned again this project as an example of good procedures and of promotion of entrepreneurship.

Lessons Learned

 What are the impact of your initiative and the lessons learned?
The lessons learnt with the availability of this service were essentially three:

1- Defining the problem and outlining the solution must be carried out together with those who are directly affected by it;
2- Rethinking procedures or re-engineering procedures, regardless of how deep-rooted they are, can lead to very positive results;
3- The success of a new service passes fundamentally for the training of operational and its adjusted spreading in public the one that is destined.

The impact of the availability of this service was huge, not only to the public, as proven by the huge adhesion to this service, but also by the huge international recognition which the service had within the European Enterprise Awards 2006.

Contact Information

Institution Name:   Portuguese Institute of Registries and Notary
Institution Type:   Public Agency  
Contact Person:   Abilio Silva
Title:   Project Manager  
Telephone/ Fax:   00 351 217 985 500
Institution's / Project's Website:   00 351 217 817 693
E-mail:   abilio.silva@dgrn.mj.pt  
Address:   Av. D. João II, nº 1.8.01D Edifício H 8.º Piso Campus da Justiça Apartado 8295
Postal Code:   1803-001 Lisboa
City:   Lisbon
State/Province:  
Country:   Portugal

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