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Reclassifying Your Business Activities: Key Deadlines and Procedures

25 October 2024

Vasco Apolinário Rodrigues

Danielle Avidago - Immigration Consultant

Vasco Apolinário Rodrigues | Lawyer

The CAE codes are being updated to reflect new economic activities, with the introduction of CAE Rev. 4, which will come into effect in January 2025. To comply with this change, all businesses must update their CAE codes by 30th November 2024, by completing a mandatory online survey called IRCAE - Inquérito para Reclassificação das Atividades Económicas (Economic Activities Reclassification Survey).

Here’s what you need to know to stay compliant.

In January 2025, the new version of CAE Rev. 4 - the Portuguese Classification of Economic Activities - will come into force. To ensure proper reclassification of economic activities, businesses must complete a mandatory online survey by the end of November. This update is essential to keep up with technological, social, and economic changes that have emerged since the previous classification was established in 2008. The revision will allow for a more precise and detailed categorisation of each country’s economic activities, enabling more accurate data collection.

The importance of CAE codes

The CAE code serves as a registry identifying the industry or sector in which a company operates. It is aligned with the designations of the European Union’s economic activities and plays an essential role in tax classification, allowing the state to identify taxpayers for IRS and IRC purposes. Additionally, the new classification will provide businesses, financial institutions, and public administrations with more reliable and comparable statistical data.

How to update your CAE codes

With the changes coming into effect in January 2025, it is required that all businesses update their CAE codes before the deadline of 30th November 2024. The IRCAE survey allows companies to check their current CAE codes (Rev. 3) and select the appropriate new codes (Rev. 4) that best describe their current business activities.

Why this matters

The transition to CAE Rev. 4 is not just a technical update - it reflects the evolving business landscape. With the rise of new industries and technologies, it is fundamental for businesses to be accurately classified to ensure that their activities are properly represented. This reclassification will enable better planning and analysis, both for businesses and for government entities, and ensure that Portugal remains aligned with the latest European Union standards.

Failure to update CAE codes before the deadline could lead to administrative issues or complications with tax authorities in the future. It is therefore important that businesses take the necessary steps to comply with this update, ensuring a smooth transition to the new classification system.

By updating your CAE codes, you not only comply with legal requirements but also ensure that your business is accurately represented within the evolving framework of economic activities in Portugal.

If you require further information or need assistance with the CAE update process, our team is here to help. We understand that this transition can feel complex, and we are committed to providing the guidance and support you need to ensure a smooth and timely reclassification. Don’t hesitate to reach out for personalised advice or any clarifications regarding the IRCAE survey or the new CAE Rev. 4 codes. Your compliance and success are our priority, and we’re just a call or email away.

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Expressions of Interest – New Regularisation Law

14 November 2024

On the 7th of November 2024, Law No. 40/2024 was published, introducing a renewed pathway for non-EU immigrants seeking to regularise their residency in Portugal. This legislation allows foreign nationals who contributed to Portuguese social security within the 12 months preceding the suspension of the expression of interest on the 3rd of June 2024, to reinitiate the regularisation process. This marks an essential first step toward securing a residence permit. Until the 3rd of June 2024, under Law No. 23/2007 of the 4th of July , non-EU immigrants who entered Portugal as tourists—thus without formal residency status—could initiate the regularisation process by submitting an expression of interest. This option was available to individuals with a Portuguese Social Security Number (NISS), a Tax Identification Number (NIF) , and either an employment contract or self-employment, allowing them to take the first steps toward obtaining a residence permit. As of the 3rd of June 2024, Decree-Law No. 37-A/2024 established a transitional regime that suspended the expression of interest mechanism. Under this regime, all foreign nationals wishing to reside in Portugal must now secure an employment contract or job offer before relocating. The decision to end the expression of interest process has sparked some debate. On one hand, this measure has allowed the government to advance its immigration policy goals. According to António Leitão Amaro, Minister of the Presidency, residency applications in Portugal have decreased by 80%, which has significantly reduced the workload of AIMA . On the other hand, ending the expression of interest process has created a gap in legislation, leaving a significant number of people without adequate legal protection and, as a result, in a vulnerable position. With the amendment introduced by Law No. 40/2024, foreign nationals once again have the opportunity to regularise their residency status through this process, provided they have been registered with social security and have made contributions, either as an employed or self-employed worker, for at least 12 months prior to 3rd June 2024. If you meet this requirement and are considering submitting an expression of interest, please reach out to us . We would be pleased to assist you throughout the process.

Traveling to Portugal Simplified: Discover How

13 November 2024

This transformation accompanies the introduction of the Entry/Exit System (EES) across the EU, an automated IT system designed to register non-EU nationals traveling within this region. The EES is a significant step forward in modernizing border management, enhancing both the efficiency and precision of border processing. One of the most notable changes it brings is the end of physical passport stamping. This system will apply solely to short stays, specifically those lasting up to 90 days within a 180-day period. This modernization will enhance the experience for tourists visiting Portugal and other Schengen countries by streamlining border management across the EU. With more efficient and secure entry processes, this initiative aims to provide a seamless and enjoyable journey for all travelers within the Schengen area. The new system strengthens Schengen border security in several ways by: Utilizing biometric data to effectively prevent identity fraud; Enhancing border verification through electronic records and biometric data; Facilitating real-time information sharing, ensuring EU border authorities have timely, accurate data; Improving the tracking of overstayers with precise records of entries, exits, and entry refusals. The EES is scheduled for implementation in 2025. Another forthcoming measure is the European Travel Information and Authorization System (ETIAS) , a document required for entry into the Schengen Area. Available online for a fee of 7 EUR, with certain exemptions, ETIAS will be directly linked to the traveller’s passport. Similar in function to the U.S. ESTA authorization, ETIAS is designed to facilitate secure and efficient entry for travellers, reinforcing the safety standards across all Schengen borders.