One of the things that caused me some confusion when I first started working as a lawyer and started to hear something about offshore companies, was the fact that people talked about them in secrecy, as if it was something illegal, something that only criminals would use in order to cover up for the profits of their illegal activities.

Back in the law school we learned that there is a principle in the law that states that, within the boundaries of the law, one is free to freely choose the content of the contracts in which he is part, the agree upon different types of contracts, different from the ones especially established in the Civil Code and include the clauses that suites best his objectives and needs.

In my opinion this freedom includes the possibility of using for certain purposes, companies based in a different place from the one you leave in and nothing, but nothing in the law says that your money should be deposited in the same place where you live.

But do not forget! All this freedom should be used within the boundaries of the law. But, believe me, it is a lot of freedom.

DON’T FORGET THAT THE ESTATE WANTS YOU TO BE STUPID! WHY? Because the Estate wants you to keep your money on national banks even if out there you can find huge opportunities and very good products. Not to grab this opportunities would be stupid.

The Estate also wants you to have all your assets (houses, cars, boats, etc…etc…) in your personal name. That way it would be easier to monitor you and identify how much are you worth.

The Estate wants, but until now they didn’t have the courage to make this an obligation. The only thing you have to do is to take advantage of this loophole.

Mr. and Mrs. W. bought a house in Portugal; a little apartment near the beach, at the sunny Algarve. They’re intention was to move to this country, have a business and run their lives in the new location. They, in fact bought the house with no assistance from a Lawyer. There was no need for that since they were getting a loan from a Portuguese bank and the bank prepared everything. They had, however, some little help from an English lady, living for quite some time at the Algarve, and that was it.

They started they’re business but things went the wrong way and because of that they had to close the business six month after it has started. They move back to the UK.

Years later someone from the tax department went to their Portuguese home and put some paper on the door. Fortunately the house had friends there and they were able to collect the paper. Later they understood that the paper was related to a fiscal debt, a huge one. The debt had his origins in their business (VAT) and in the property rates. But how could it be? They have never received any notice from the Tax department to pay any taxes. How could this be?

They then contacted a lawyer; the lawyer made some searches and discovered that all notifications have been sent to an address where the couple lived for a very small period of time, only the time enough to have their house ready; they registered with the tax department and when they moved they changed their fiscal address. The lawyer also discovered that the apartment was registered only in Mr. W. name, when their intention was to buy jointly.

Things like this can happen in this country. That is why is so important to hire a lawyer from the beginning, when the decision to buy in Portugal is made and or when you intend to move to this country. The laws in Portugal are nothing but simple and to get advise on property purchase and tax matters is crucial.