Construction Permit

The Construction Permit or the Contractor's Certificate (identical in terms of function, but with a different level of demand) are crucial documents for any construction project in Portugal. These documents authorize the holder to carry out construction work, being non-transferable and with a specific validity period. In this guide, we will explore all aspects related to the construction permit and the, from the necessary requirements to the process of obtaining it.

What is a Construction Permit?

The construction permit is the document that authorizes construction activities to be carried out. This document is valid for a maximum period of one year and expires on January 31st of the following year, if not revalidated. Both sole proprietors and commercial companies subject to Portuguese personal law can hold a license.

There are 2 types of Permits: for Private Works (classes 1 and 2) and for Public Works (classes 1 to 9). The public works contractor license allows the carrying out of private works, as long as the value is included in the class for which it is authorized.

The Construction Permit enables the company to carry out works whose values fall within the required class. According to Ordinance No. 212/2022, these are the maximum values for works by class:

Who can apply for a Construction Permit?

Individual entrepreneurs and commercial companies that are qualified to carry out construction activities can request a construction permit.

IMPIC, before issuing the license, subjects applicants to comply with certain requirements, namely: suitability, technical capacity and economic and financial capacity.

Necessary requirements for issuing a Construction Permit?

To obtain a Construction Permit, certain requirements may be required, depending on the type of applicant (individual or legal person), the type of work and the class covered :

• Commercial Suitability. If they require a permit for public or private works, individual entrepreneurs or commercial companies, as well as their legal representatives, must demonstrate commercial suitability, in accordance with article 9 of Law No. 41/2015. Those who have been declared insolvent, prohibited from carrying out trade or construction, or convicted of specific crimes, such as fraud or corruption, are considered unfit. IMPIC assesses suitability based on criminal convictions that have become final and unappealable in the last five years and can disregard convictions after two years of full compliance with the sanctions. The loss of suitability must be justified by IMPIC.
• Technical Capacity: A requirement required for the Public Works Permit in accordance with article 10 of Law nº 41/2015. Companies applying for this license must demonstrate technical capacity and employ qualified technicians employed in production, construction management and safety, as defined by law. Technicians cannot be shared between companies to prove capacity and cannot work in construction control entities without authorization. Any change in technical personnel or their qualifications must be communicated to IMPIC within 20 days.
• Economic and Financial Capacity: Assessed by the values of equity, global and on-site turnover, and financial balance. For a Private Works Permit (classes 1 and 2) this requirement is not required.
• Work Accident Insurance for construction activities.It must cover the activity related to the categories/subcategories contained in the license held by the company and, within the scope of the execution of private works, it must also cover, in a generic way, the construction activity.

Where and how to obtain a Construction Permit?

The request can be made online (if it is a Permit for Private Works, or Contractor's Certificate) through the Portal Instituto dos Mercados Públicos do Imobiliário e da Construção (IMPIC) for an individual or legal entity, at physical counters or by mail for IMPIC, and can be requested by individual entrepreneurs and commercial companies based in the European economic area.

To obtain a Construction Permit in Portugal, it is necessary to follow a set of steps that involve the preparation of documentation, compliance with requirements and interaction with government entities. Here are the basic steps:

1. Documentation - Prepare all necessary documents, which should include:

INDIVIDUAL

• Fill out the forms Model A1 , Model A5, Model A7, Model A8 and Model A9;
• Identification documents ( Citizen Card or civil identification document andNIF) ;
• Certificate of the individual's criminal record ( online request ), valid.In the intended purpose you should choose: "PUBLIC/PRIVATE WORKS CONTRACTOR" ;
• Work accident insurance. You will have to submit a declaration from the insurance company proving that you have work accident insurance ( IMPIC Draft ).
• Proof of technical capacity. Presentation of technical professional card(s), identification documents and income statement (last pay slip) or copy of the service provision contract (in the case of hired technicians);
• Proof of financial capacity. For class 3 and higher ( articles 6, no. 1, subparagraph c) and 11 );

COLLECTIVE PERSON

• Permanent Certificate of Commercial Registration
• Identification documents of legal representatives;
• Certificate of criminal record of the legal person;
• Occupational accident insurance for contracted workers;
• Proof of technical capacity;
• Proof of financial capacity. For class 3 and higher. Companies wishing to carry out works above class 2 must have equity of at least 10% of the limit value of the highest class of intended works. The financial assessment is based on indicators such as liquidity and financial autonomy. Alternatively, companies may choose to provide a guarantee or liability insurance. These can be issued in any State of the European Economic Area by an operator authorized in Portugal.Financial indicators are defined by government decree. ( Articles 6, paragraph 1, paragraph c) and 11 );

1. Request Submission: The request to obtain the permit can be made online through the Portal of the Institute of Public Markets, Real Estate and Construction (IMPIC), or in person at the service counters.
2. Payment of Fees: It will be necessary to pay fees associated with the process, which vary depending on the class and type of license sought.
3. Assessment and Approval: After submitting the request and paying the fees, the process will be evaluated by the competent authorities. If everything is in compliance, the permit will be issued.
4. Receiving the Permit: Once approved, the permit will be issued and must be renewed annually to maintain its validity.
5. Revalidation: The license is valid for a maximum period of 12 months, expiring on January 31st of the following year if it is not revalidated. Revalidation involves paying an annual fee and, in some cases, submitting updated documentation.

What is the cost of a Building Permit

It depends on the type of Permit and the associated class, but there are several fees to consider:

• Initial Fee - Payment of the Initial Fee is a condition for evaluating the request, in the amount of €75, which must be paid prior to submission (at least 24 hours in advance). The value of the Initial Fee is deducted from the amount of the final fee due for granting the request.
• Issuance Fee - “On the spot” The request for a Permit in class 1 and 2, may, upon request from the interested party, be granted at the time of its presentation, as long as the legal requirements for this purpose are met, the amount of 25 €, which is added to the final fee.
• Concession Fee - Fee due for the Permit granting procedure. In the case of the Public Works Permit, the Concession Fee is equal to a fixed installment + a variable installment depending on the number of associated subcategories.
• Annual Fee - When granting the Permit, the Annual Fee is paid in the amount proportional to the number of complete months to elapse until the end of the current calendar year. To maintain this qualifying title, this fee is paid annually in full, with the respective payment guide issued by IMPIC during the month of January of each year.

Validity and Revalidation

The license is valid for a maximum period of 12 months, expiring on January 31st if it is not revalidated.

What is the difference between a Construction Permit and a Contractor's Certificate?

The difference between the Contractor's Certificate and the Construction Permit lies mainly in the scope of activity and the requirements for obtaining it. Both are legal documents that enable companies or individual entrepreneurs to carry out activities in the construction sector, but they have different characteristics. Here are the main differences:

Contractor's Certificate

• Scope of Activity: The Contractor Certificate allows you to carry out public and private works. In both cases , the value of the work cannot exceed 20% of class 1 (€40,000). In the case of public works, only some subcategories are permitted. It is suitable for companies or entrepreneurs who intend to carry out smaller or more complex works.
• Requirements: The requirements for obtaining the Contractor's Certificate are usually less stringent compared to the Construction Permit, but they must present proof of Commercial Suitability and Work Accident Insurance for the construction activity. In the case of public works, economic and financial guarantees are required.although less restrictive than in the case of the Construction Permit and for some subcategories proof of minimum professional qualifications of the technicians is required.
• Validity: The Construction Permit has unlimited validity, but is reviewed annually by IMPIC. If the requirements are not met, or the Annual Fee is not paid, the license may be changed or cancelled.
• Legislation: The Contractor's Certificate is regulated by specific legislation that establishes the conditions for its issuance, renewal and cancellation.
• Costs: Generally, the costs associated with obtaining and maintaining a Contractor's Certificate are less than a Building Permit.

Building permit

• Scope of Activity: The Construction Permit allows the carrying out of larger and more complex works.The Private Works Permit only allows for classes 1 (works up to €200,000) and 2 (€400,000). From this value, you will have to have a Public Works Permit, which includes classes 1 to 9 (see table above). This Permit is the necessary document for companies that intend to participate in large projects, including public works.
• Requirements: The requirements for obtaining a Construction Permit are more stringent and may include a series of conditions related to the technical, financial capacity and suitability of the company.
• Validity: The Construction Permit has unlimited validity, but is reviewed annually by IMPIC. In case of non-compliance with the requirements, or payment of the Annual Fee, the license may be changed or cancelled.
• Legislation: The Construction Permit is also regulated by specific legislation, which is generally more complex and comprehensive than that which regulates Contractor Certificates.
• Costs: The costs for obtaining and renewing a Construction Permit are generally higher, reflecting the greater degree of responsibility and complexity of the works that can be carried out.

In summary, the Contractor's Certificate is ideal for small projects, while the Construction Permit is necessary for larger and more complex projects. Both ensure legal compliance and construction safety.

Construction Permit FAQs

Here are some of the most frequently asked questions about the Construction Permit:

Conclusion

The building permit is an essential document for any construction project in Portugal. It is crucial to be well informed about all the requirements and steps for obtaining and revalidating it.

Despite what has been said about the demands and legal requirements imposed on those carrying out works in Portugal, IMPIC recently set up a working group with the aim of reviewing Law 41/2015. This law governs the civil construction and public works sector, and the group aims to create a new legal framework for the permits and technical qualifications required of the professionals involved.