The Portuguese economy was growing rapidly until the start of the 2019 novel coronavirus disease (COVID-19) global pandemic. However, macroeconomic forecasts for Portugal still point to economic growth of 4.8% for 2021.

The economy is currently dominated by the services sector, particularly in the tourism industry, followed by the industrial sector, which employs about 25% of the working population and contributes 12% of GDP. The agricultural sector comes in last place, representing about 2.1% of Portugal's GDP and employing 6% of the active population.

The dominant industries in Portugal are as follows:

The following industries have also been growing:

The Portuguese population is about ten million. The language spoken in Portugal is Portuguese, the eighth most spoken language in the world.

Generally, Portuguese entrepreneurs are open to doing business.

Although there is a downward trend, many businesses in Portugal are still based on family structures. This is not the case for international groups based in Portugal.

The business culture is focused on creating relationships of loyalty and trust.

In November 2021, Portugal will again host the Web Summit. This is considered to be the largest and most important tech event in the world.

In 2021, Portugal will held local elections, which had an impact on the composition of the executive committee of municipalities.

The Government's draft State Budget for 2022 has been rejected. The Portuguese President dissolved Parliament and called early parliamentary elections to be held on 30 January 2022.

Legislative activity has been focused on measures to combat the COVID-19 pandemic and to stimulate the economy. For example, Parliament recently approved the extraordinary process for business viability (procedimento extraordinário de viabilização de empresas) (PEVE). This creates a temporary extraordinary process to enable the recovery of viable entities, and is aimed exclusively at companies that are in a difficult economic situation or facing imminent or current insolvency due to COVID-19.

The Portuguese legal system is a civil law system based on the Roman law tradition. It is characterised by a comprehensive codification of laws.

There are no specific authorisation requirements for foreign investment.

There are no restrictions on foreign shareholders. The same rules apply to both Portuguese and foreign investors.

There are no restrictions triggered by an acquisition of shares in Portuguese companies, regardless of the threshold. However, investors holding, directly or indirectly, more than 25% of the share capital in a Portuguese commercial company are considered beneficial owners of that company. They must be identified in the company's ultimate beneficial owner (UBO) declaration submitted to the Central Registry of Beneficial Owners (Registo Central do Beneficiário Efetivo) (RCBE), as required by Law no. 89/2017 of 21 August 2017.

There is no prohibition on foreign investment in Portugal, regardless of the industry. However, mandatory registration requirements apply for specific activities, especially in regulated areas.

There are no restrictions on doing business with certain countries or jurisdictions.

However, anti-money laundering and counter-terrorist financing regulations apply to any company or individual doing business in Portugal.

There are generally no restrictions on foreign exchange operations in Portugal. Under the EU principle of free movement of capital, all restrictions on capital movements and payments between EU member states are prohibited. Therefore, there are no exchange controls or currency regulations affecting inbound or outbound investment, the repatriation of income, capital or dividends, the holding of currency accounts, or the settlement of currency trading transactions between Portugal and others EU member states.

In principle, foreign exchange operations are intermediated by an entity authorised to carry out foreign exchange activities. However, Portuguese residents can carry out their payments/receipts to/from non-residents, or perform their obligations towards non-residents, directly or through any means of payment denominated in foreign currency.

Any individual entering or leaving Portugal, starting or ending their journey in a non-EU country, and carrying an amount of cash of EUR10,000 or more, must declare the amount to the customs authorities. Between EU member states, cash movements above EUR10,000 need only be declared if requested by the customs authorities.

All legal persons residing or carrying on business in Portugal, and conducting external economic or financial transactions or foreign exchange operations exceeding a total annual amount of EUR100,000, must communicate those operations to the Bank of Portugal (Banco de Portugal).

Additionally, banks must inform the Bank of Portugal of any operations involving a foreign account that exceed EUR10,000.

Beneficial owner reporting obligations apply to:

The reporting obligations include:

In an effort to globalise the Portuguese economy, investment in Portugal is supported by incentive mechanisms offered through the National Strategic Reference Framework for the next planning period of EU-level economic and social cohesion funds.

Incentive mechanisms usually consist of:

A repayable incentive may be replaced by interest rate benefits, if these are provided for in a call for tenders, or converted into a non-repayable incentive, depending on the performance of a project, as set out in the applicable incentive rules.

Incentive mechanisms must also comply with the applicable EU state aid rules.

Portugal and other jurisdiction can enter into arrangements for the reciprocal protection and promotion of investments.

The most common forms of business vehicle used in Portugal are companies, especially:

It is also possible to incorporate a local branch, which is a legal permanent representation of a legal entity, with no separate legal personality.

Usually, foreign companies wishing to carry out their activity in Portugal either incorporate a Portuguese subsidiary (a company) or set up a branch.

Companies must apply for a corporate name and purpose to the National Registry of Companies (RNPC). The RNPC issues a certificate of approval that contains the future company's taxpayer number. Foreign quotaholders/shareholders must also obtain a Portuguese taxpayer number. A bank account must then be opened to deposit the amount corresponding to the company's share capital.

Once all necessary documents have been gathered, the incorporation document (containing the company's articles of association) must be executed before a lawyer or notary. The incorporation must then be registered at the RNPC.

There is a faster incorporation procedure (Empresa na Hora), but this does not allow the quotaholders/shareholders to tailor certain aspects of the company to be incorporated.

It is also mandatory to apply to the RNPC to set up a branch. The parent company must then do both of the following:

Once this is done, the branch must be registered with the RNPC.

The UBO declaration must be registered with the RCBE (see Question 4 and Question 6). After its incorporation, a company must also be registered with the Tax and Social Security authorities.

A company must deposit its annual accounts with the RNPC.

The minimum share capital requirements are as follows:

There are no minimum share capital requirements for branches, but an amount must be allocated to their activity.

Shares can be issued for non-cash consideration both in limited liability companies by quotas and limited liability companies by shares.

Restrictions on Rights Attaching to Shares. Some of the rights attaching to shares can be restricted. For example, it is possible to issue:

In limited liability companies by quotas, special rights must be stipulated in the company's articles of association. In limited liability companies by shares, special rights can only be assigned to a category of shares, rather than shareholders.

Automatic Rights Attaching to Shares. Any shareholding gives the right to:

Typically, the management structure of limited liability companies by shares includes both:

A limited liability company by shares can adopt a different management/supervisory structure, and have either:

The management of limited liability companies by quotas is discharged by one or more managers.

The management of branches is usually discharged by a representative/attorney under a power of attorney granted by the parent company.

There are no restrictions on foreign managers. Limited liability companies by shares can have corporate directors. In this case, the company must appoint an individual to act on their own behalf (rather than in the name of the originally appointed company).

Liability Towards the Company. Directors/managers are jointly and severally liable towards the company for any losses incurred by the company arising from their unlawful actions or omissions in breach of their legal or contractual duties.

Liability Towards the Company's Creditors. Directors are jointly and severally liable towards the company's creditors if the company's assets become insufficient to cover the company's debts as a result of the directors' intentional breach of their legal or contractual duties aimed at the protection of creditors.

Liability Towards the Company's Quotaholders/Shareholders and Third Parties. Directors/managers are jointly and severally liable towards the company's quotaholders/shareholders and third parties for any losses caused directly by the performance of their duties.

Where a company is solely owned by another Portuguese company, the parent company is liable for the debts/liabilities and annual losses if specific requirements are met. In such a case, the parent company is only liable for all debts arising before or during the group relationship. Liability can only be claimed after 30 days following default by the affiliated company. Additionally, enforcement against the parent company can only be initiated based on an enforceable order against it; an enforceable order against the affiliated company is not sufficient. The parent company is only required to compensate the affiliated company for any losses (recorded in balance sheets and other accounting documents) incurred during the group relationship at the time of termination of that relationship.

When a company is fully owned by a sole quotaholder/shareholder:

The environmental obligations of a business depend on its specific area of activity.

Setting up a business may require compliance with several environmental obligations, depending on the specific location and technical and operational features of the business. For example, it may be necessary to obtain an environmental impact assessment and/or an environmental licence. These licensing procedures may not exclude the need to obtain an autonomous operating licence (such as an industrial operation licence). Additionally, if the operations of the business involve the handling of certain substances, it may be necessary to obtain a prior assessment of the location of the project under national legislation implementing the Seveso III Directive (2012/18/EU).

Other prior administrative procedures may also apply, in particular for the:

The location of business premises is also important when it comes to the potential contamination of soil and water. While there is no specific regulation on this matter, business should consider potential contamination before acquiring or leasing a property and while operating.

The daily operation of a business also requires compliance with certain obligations, including in relation to waste management, waste flows, and noise. There are monitoring and reporting obligations. For example, water and air emissions must be checked periodically. If the production process requires the use of equipment (such as air conditioning devices, boilers, pressure devices, or fire extinguishing equipment), this may require leakage checks and periodical inspections, which must be carried out by certified entities.

Portuguese employment law is based on EU law, that is, EU directives that are applicable throughout the EU. However, these directives require implementation through national legislation.

At the domestic level, the Portuguese Constitution establishes many important provisions regarding employment and social matters.

The main law that regulates employment relationships is the Portuguese Employment Code, which covers most aspects of employment relationships.

Some other matters are regulated by specific laws, including the:

Collective bargaining agreements also play a significant role in the regulation of employment relationships.

Portuguese legislation applies to all employees regardless of their nationality.

An employee (Portuguese or foreign) habitually working in Portugal who is sent temporarily to another country is covered by the Posting of Employees (Secondment) Rules.

While workers posted to another EU member state are still employed by the sending company and subject to Portuguese law, they are entitled to a set of core rights in force in the host member state.

Under EU law, the employer and the employee can choose the law applicable to the employment contract. However, this choice of law cannot result in depriving the employee of the protection afforded to them by mandatory provisions that would be applicable in the absence of choice.

As a general rule, legal provisions and any applicable collective bargaining agreements can only be excluded if it results in a more favourable situation for the employee.

Certain provisions can never be excluded (for example, dismissal requirements and grounds for termination of employment).

Employment contracts do not generally need to be in writing, except for:

However, employers must provide employees written information on the main terms of employment.

When the employment contract must be in writing, the law usually imposes minimum content requirements for the contract to be valid. For example, a fixed-term employment contract must justify why it is essential to use a fixed-term contract. An employment contract with a foreign employee must contain the following information:

An employment contract can only derogate from the law if this is more favourable to the employee, and if the rules that are excluded are not mandatory provisions.

Generally, collective agreements apply to employers and employees based on their affiliation to trade unions or associations.

The application of a collective bargaining agreement can also be extended by a governmental decision (ministerial extension order). In this case, a collective bargaining agreement will be applicable, depending on the terms of extension order, in a region or the whole country, to all companies operating in the specific sector or industry.

Non-EU foreign nationals can only start working in Portugal if they have a work/residence permit. In practice, foreign nationals can only start working for an employer after the visa/residence permit has been issued. The main Portuguese authority responsible for issuing work and residence permits is the Immigration and Borders Service (Serviço de Estrangeiros e Fronteiras) (SEF).

The Immigration Law (Law no. 23/2007 of 4 July 2007) provides for various types of residence/work permits or visas, according to the purpose of the stay.

A residence permit can be temporary or permanent. If temporary, the residence permit is valid for one year from its date of issue and is renewable for successive two-year periods. A permanent residence permit has no validity period. However, it must be renewed every five years or when there is a change in the identification information registered in the permit.

The main permits/visas available for foreign employees are the:

Decisions on visa requests are usually issued within 90 days (disregarding delays caused by the COVID-19 pandemic). The fees payable depend on each individual request. An applicant will need to pay at least EUR84 for a temporary residence permit and EUR222 for a permanent residence permit.

Nationals of third countries who are resident in an EU member state and are regularly employed by a company that is established in a member state, do not require a residence visa or a limited stay visa to travel to Portugal as part of their employment relationship in order to provide services. However, they must give notice of their presence in Portugal to the SEF within three days of arrival in the country.

UK citizens are now considered to be third-country citizens, which means that the above rules apply to them.

EU citizens can work freely in Portugal if they obtain their EU residence certificate from the relevant municipal council.

EU citizens can request a residence card for their non-EU family members. This type of residence application requires fewer documents than those required for non-EU citizens.

A residence card is valid for five years. Holders of this type of residence permit can live and work in Portugal and travel in the Schengen Area.

Employees' representative bodies are not entitled to representation on the board of directors or other corporate bodies, but they must be consulted on certain issues.

Employees can be represented by an employees' committee or by trade union representatives. Each establishment can also set up sub-committees of employees, which have rights equivalent to those of the main employees' committee for the company.

The employees' committee has the right to meet once a month with the company's management, to request information about the company's activity and to participate in important processes regarding the company's life. The employees' committee is entitled to receive information on important aspects of the company's activities, such as:

In addition, the employees' committee must be consulted on and informed about significant issues affecting the company's life, including:

If there is no employees' committee, the company must comply with its information and consultation obligations towards union delegates elected by the employees. These delegates can form a trade union or inter-union committee.

Obtaining approval of employees' representative bodies is not mandatory in any of the cases referred to above.

In Portugal, dismissals are only allowed based on just cause or objective causes (for example, collective dismissal (see Question 17)).

Unilateral termination by the employer is heavily regulated and can only occur in specific cases. An employment contract can only be terminated at the employee's or employer's discretion without justification during the trial period (probationary period).

In circumstances expressly provided by law, the employer can dismiss an employee on disciplinary grounds subject to a prior internal disciplinary procedure. The law lists certain conduct that may constitute just cause, including disobeying the employer's orders, causing repeated conflicts with other employees, or causing significant material damage to the employer.

For the dismissal to be considered lawful/fair, the employer must comply with several procedural requirements before adopting a final decision. If the final decision is to dismiss the employee, the employment contract will terminate once the employee is notified or receives the written dismissal decision.

If there is a just cause for the employee's dismissal and the dismissal complies with the law, the employee will not be entitled to receive any kind of compensation.

Grounds for Unfair Dismissal. A dismissal will be considered unlawful if, for example:

Remedies. An employee who is dismissed can file a claim before an employment court to challenge the termination of their employment contract.

If the court finds that the dismissal was unlawful/unfair, the employer will be ordered to:

Certain employees benefit from special protections against dismissal, including:

Collective dismissal is the termination of individual employment contracts by the employer on grounds expressly provided by law, either simultaneously or within a three-month period, of at least two (in companies with up to 50 employees) or five employees (in companies with more than 50 employees).

The legal grounds for collective dismissals are:

A layoff is defined as a reduction of regular working hours or suspension of employment contracts due to:

To start a collective redundancy or layoff procedure, the employer must give notice in writing to the works council (if there is one) or to the inter-union committee or union committee. The notice must provide the following information:

If there are no employees' representative bodies, employees who may be affected by the collective dismissal must be notified and can appoint an employees' representative committee to negotiate on their behalf.

A mandatory information and negotiation stage must take place between the company and the employees' representative body before the final decision is taken.

In the case of a collective dismissal, the employer must also give notice to the relevant department of the Ministry of Employment to participate in the information and negotiation stage. The Ministry only ensures compliance with the formal legal requirements and cannot interfere in the outcome of the process. It cannot make any decision on the merits or the grounds alleged by the employer for the redundancy.

The notice period for termination of the employment contract varies between 15 and 75 days, depending on the employee's length of service. Employees whose employment contracts are terminated by means of collective redundancy are entitled to compensation of an amount equivalent to 12 days of basic pay and seniority payments for each full year of service. For this purpose, the amount of basic salary and seniority payment is limited to 20 times the national minimum wage. The total amount of compensation cannot exceed 12 times the monthly basic pay and seniority payments, or 240 times the national minimum wage.

If the employee joined the company before 30 September 2013, compensation is calculated according to criteria in force on the employee's start date.

Redundancy payments, and any other amounts due for termination of the employment contract, must be paid by the date on which termination takes effect. Failure to pay the redundancy and other sums by this date constitutes grounds for unfair dismissal.

Any layoff procedure cannot exceed six months or one in the case of a catastrophe or other event that seriously affects the employer's normal business activity (extendable by up to six months).

Employees are entitled to their normal salary for the hours worked in the case of a reduction in working hours. In cases of either reduction or suspension, employees are entitled to a monthly compensation corresponding to two-thirds of their regular salary (including basic pay, seniority pay, and all regular and periodical benefits inherent to their work). The total amount of compensation cannot be lower than the national minimum wage (currently EUR665), but cannot exceed three times the minimum national wage.

Compensation for layoffs is borne by the employer (30%) and the Institute of Social Security (70%).

Special provisions on layoffs apply in the context of the COVID-19 pandemic. These provide for a simplified process and higher compensation for employees, which is borne by the Institute of Social Security.

Tax resident individuals are liable to personal income tax (imposto sobre o rendimento das pessoas singulares) (IRS) on their worldwide income, while non-residents are only liable to IRS on their Portuguese source income.

An individual is considered tax resident if they meet one of the following conditions:

Portuguese nationals who change their tax residency to a low-tax jurisdiction or tax haven as defined by Portuguese law are deemed to be tax residents in Portugal in the year in which the change occurs and in the four subsequent years, unless they prove that the change is due to compelling reasons (for example, to work temporarily in that jurisdiction for an employer domiciled in Portugal).

IRS is charged on annual income, which is classified into several income categories (including employment income), after specific deductions applicable to each category. A taxpayer must specify all their annual income subject to taxation in their annual income tax return, which must be submitted between 1 April and 30 June.

As a rule, employment income is subject to IRS withholding tax (at variable rates depending on the employee's pay and household conditions) on account of the final tax due.

The final IRS progressive tax rates range from 14.5% to 48% (for taxable income of EUR80,882 and above). An additional solidarity rate of 2.5% is applicable to taxpayers with taxable income above EUR80,000 up to EUR250,000, and a rate of 5% is applicable to taxable income exceeding EUR250,000.

Tax resident employees who have not been tax resident in Portugal in the previous five years may benefit from non-habitual resident (NHR) status for a ten-year period. Under the NHR regime, employment income is taxed at a flat rate of 20%, if that income derives from listed high value-added activities of a scientific, artistic, or technical nature.

Social security contributions are generally due at a rate of 11% on the employee's gross pay for professional work.

Employment income earned by non-tax resident employees is subject to IRS withholding tax at a rate of 25%. The IRS withholding tax rate may be reduced or eliminated under an applicable double tax treaty (DTT).

Non-tax resident employees who are resident in another EU or European Economic Area (EEA) member state can request the refund, in whole or in part, of the tax withheld if it is higher than the tax that would result from the application of the IRS general progressive rates under the same conditions as those applicable to tax residents in Portugal, taking into account all income, including income obtained outside Portugal. For EEA tax residents, this is only possible if the EEA country is subject to obligations of administrative co-operation in tax matters equivalent to that applicable in the EU.

The refund must be:

Employers must withhold IRS due on employment income paid or put at disposal of their employees, and pay the withheld amounts to the Tax and Customs Authority by the 20th day of the following month.

Employers must pay social security contributions at a rate of 23.75% on their employee's gross pay. Employers must also withhold their employees' social security contributions.

Corporations and other entities with their head office or place of effective management in Portugal qualify as tax resident. They are subject to corporate income tax (imposto sobre a rendimento das pessoas colectivas) (IRC) on their worldwide income.

Non-resident entities are subject to IRC on:

The current standard IRC rate is:

For small and medium enterprises in Portugal mainland, a reduced rate of 17% is applicable on the first EUR25,000 of taxable income, with the surplus taxed at the standard rate of 21%.

A municipal surcharge is levied by municipalities at variable rates of up to 1.5% of the annual taxable profit. The actual rate is defined every year by each municipality.

Taxpayers are also subject to a state surcharge of:

Generally, an annual IRC return for the current tax year must be submitted by May 31 of the following year.

VAT is generally levied on the supply of goods and services, imports, and intra-EU acquisitions of goods, as well as services provided to non-resident entities.

For Portugal mainland, a standard VAT rate of 23%, an intermediate rate of 13%, and a reduced rate of 6% apply.

The VAT rates are 22%, 12%, and 5% in the Autonomous Region of Madeira, and 18%, 9%, and 4% in the Autonomous Region of Azores. Monthly VAT returns must be filed by businesses with an annual turnover of at least EUR650,000 (otherwise, VAT returns must be filed quarterly).

Real estate transfer tax (imposto municipal sobre transmissôes onerosas de imóveis) (IMT) is levied on the transfer of immovable property located in Portuguese territory over the highest of the taxable value of the immovable property or the transaction value. IMT is assessed at progressive rates of up to 7.5% on urban residential properties and up to 6.5% for other urban properties.

Property tax (imposto municipal sobre imóveis) (IMI) is due on immovable property owned on 31 December and paid in the following year, in one, two or three instalments, depending on the tax value of the property. IMI is due on the taxable value of the property. The applicable rates for urban properties are defined annually by each municipality and range from 0.3% to 0.45%.

Additional property tax (adicional ao imposto municipal de imóveis) (AIMI) is charged at a rate of 0.4% on the total taxable value of residential properties or land for construction located in Portugal held by a taxable person on 1 January of each year. AIMI is assessed in June of each year and must be paid by the end of September.

Stamp duty is levied on deeds, contracts, documents, titles, books, papers and financial operations. It is usually payable by the entity that has an economic interest in the operation.

Dividends paid by Portuguese resident companies to foreign corporate shareholders are subject to IRC withholding tax at a rate of 25%. However, an exemption applies if all the following requirements are met:

A special anti-abuse rule can be used to disapply the exemption.

The exemption does not apply if the Portuguese tax resident company has not met its obligations to submit declarations to the CRBE, or if the declared beneficial owner or any beneficial owners have their residence or domicile in specific jurisdictions defined by law, unless specific conditions apply.

Withholding tax may also be eliminated or the rate reduced under an applicable DTT.

Dividends received by corporate shareholders are usually subject to IRC.

Dividends received from foreign companies may be exempt from IRC if all the following requirements are met:

This exemption does not apply to dividends considered as tax-deductible expenses at the level of the distributing company.

Generally, interest paid by Portuguese resident companies to foreign corporate shareholders is subject to IRC withholding tax at 25%. An exemption may apply if all the following requirements are met:

A special anti-abuse rule can be used to disapply the exemption.

In addition, if the parties have a special relationship under transfer pricing rules, the exemption does not apply to any excess interest that, in the absence of such relationship, would not have been agreed between the payer and the beneficial owner.

Withholding tax may also be eliminated or reduced under an applicable DTT.

Generally, royalties paid by Portuguese resident companies to foreign corporate shareholders are subject to IRC withholding tax at a rate of 25%. An exemption may apply if the same requirements are met as for interest paid to foreign corporate shareholders (see above, Interest Paid).

Portugal has detailed special rules (Regime Especial de Tributação dos Grupos de Sociedades) (RETGS) that govern the corporate income taxation of groups of companies. This is not based on a typical tax consolidation model. Instead, it is merely a tax aggregation that sums up each company's individual tax results to obtain the group's aggregate tax result. There are specific adjustments and exceptions, and under certain conditions, it is possible to offset profits and losses recorded at the level of the group and exempt intra-group income payments from corporate withholding tax.

Net financing expenses are only deductible for IRC purposes up to the higher of:

Any excess financing expenses in a given tax year may be deductible in the following five tax years if, together with the net financing expenses of the year, those limits are not exceeded. When net financing expenses do not exceed 30% of the company's tax EBITDA, the unused part increases the maximum deductible amount in the following five years, until full deduction.

The IRC Code imposes a shareholder loan maximum interest rate corresponding to Euribor 12 months + 2% spread (6% spread if the Portuguese borrower is a small or medium enterprise). Above this, tax deductibility will be denied at the level of the borrower, except when a higher interest rate can be considered reasonable under transfer pricing rules.

Under the Portuguese controlled foreign company (CFC) rules, income or profits obtained by non-resident companies subject to a clearly more favourable tax regime are allocated to Portuguese IRC taxpayers who hold, directly or indirectly, even through a trustee, fiduciary or interposed person, at least 25% of the shares, voting rights or rights over the income or assets of those companies.

The CFC rules provide that a company is considered to be subject to a clearly more favourable tax regime when any of the following applies:

However, the Portuguese CFC rules do not apply to non-resident companies whose income from one or more of certain categories defined by law does not exceed 25% of their total income.

The CFC rules are not applicable when the non-resident company is resident or established in an EU member state or an EEA member state bound by administrative co-operation obligations on tax matters equivalent to that applicable in the EU. The taxable person must show both that:

Portuguese transfer pricing rules follow the guidelines of the Organisation for Economic Co-operation and Development (OECD). Under these rules, transactions between a taxable person and any other related entity, whether or not subject to IRC, must be at arm's length (that is, subject to terms or conditions substantially identical to those that would normally be agreed, accepted, and applied between independent parties in comparable transactions).

Customs duties may be due on imports and exports in accordance with the EU Customs Code and the EU Common Customs Tariff.

Portugal currently has 78 double tax treaties in force, including with jurisdictions such as Angola, Brazil China, France, Germany, Japan, Luxembourg, the Netherlands, the UK, and the US.

Portugal has signed the OECD Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting.

The Portuguese Competition Law (PCL) (Law no. 19/2012) closely mirrors the Treaty on the Functioning of the European Union (TFEU).

Article 9 of the PCL regulates restrictive agreements and practices in a similar way to Article 101 of the TFEU. The following are prohibited:

Portuguese competition law does not distinguish between foreign and domestic companies. Competition rules apply to all economic activities, whether permanent or occasional, that take place in the private, public, and co-operative sectors in Portugal.

Restrictive agreements and practices that would otherwise be prohibited may be exempt if they meet the conditions set out in Article 10 of the PCL, which closely mirrors Article 101(3) of the TFEU.

Unilateral conduct by undertakings amounting to abuse of a dominant position in the market are regulated by Article 11 of the PCL, in a similar manner to Article 102 of the TFEU.

Abuse by one undertaking of a dominant position in the domestic market, or in a substantial part of it, is prohibited. Abuse by multiple undertakings that collectively have a dominant position in the market is also prohibited.

Additionally, unilateral conduct by one or more undertakings that abuses the economic dependence under which any of its suppliers or customers may find themselves because there are no equivalent alternatives available, is prohibited to the extent that such a practice may affect market functioning and the structure of competition (Article 12, PCL).

Concentrations are subject to merger control review by the Competition Authority. Concentrations that meet the jurisdictional thresholds set out in Article 37 of the PCL must be notified to the Competition Authority (Autoridade da Concorrência) before their implementation.

A concentration between undertakings takes place, and therefore may be subject to merger control, when there is, on a lasting basis, a change of control over the whole or in part of one or more undertakings, as a result of the:

The creation of a "full-function" joint venture (that is, a joint venture performing on a lasting basis all the functions of an autonomous economic entity) amounts to a concentration under Portuguese competition law. Therefore, it may require prior notification to the Competition Authority if certain thresholds are met.

Joint ventures created through contractual arrangements fall outside the scope of merger control provisions. However, they may be subject to the general provisions on restrictive agreements and practices (see Question 28).

The PCL does not include specific provisions on foreign-to-foreign acquisitions.

The general provisions regulating merger control apply. Therefore, foreign-to-foreign acquisitions may be subject to merger control proceedings if the jurisdictional thresholds are met.

The government can oppose the acquisition of control, by a non-EU/EEA person or undertaking, over strategic assets relating to infrastructure, national defence and security, as well as the provision of essential services in the energy, transport and communications sector, if there is a genuine and sufficient threat to national security and the provision of these services (Decree-Law no. 138/2014).

There are no specific rules governing mergers in specific industries.

However, when a merger takes place in a market that is subject to sector regulation, the Competition Authority must request a legal opinion of the relevant regulatory authority on the proposed merger before issuing a final decision (Article 55, PCL). Depending on the powers of the relevant sectoral regulatory authority, its legal opinion on the proposed merger may be binding.

The main criminal offences relating to bribery and corruption involving public officials are set out in Articles 372 to 374 of the Portuguese Criminal Code (PCC).

There are also related offences governed by specific laws, for example:

As a general rule, only individuals are subject to criminal liability. However, a legal entity can be held criminally liable when expressly provided by law. Legal entities can only be held accountable for the bribery-related offences set out in the PCC, Law no. 20/2008, and Law no. 50/2007.

Definition and Legal Requirements. A patent gives its holder an exclusive right to exploit an invention, which can be defined broadly as a new way of doing something, or a technical solution to a problem in a field of technology.

A patent can cover a new product, a new process to obtain a new or existing product, or a new use/application of that product.

To obtain patent protection, the invention must be technical in nature and meet the standard requirements of novelty, inventive step, and industrial application.

Registration. Portuguese patents are registered with the Industrial Property Office (Instituto Nacional da Propriedade Industrial) (INPI).

The INPI guidelines on the submission of a Portuguese patent application can be found at: https://justica.gov.pt/Registos/Propriedade-Industrial/Patente/Como-apresentar-um-pedido-de-patente.

When a patent is not requested in the inventor's name, the inventor has the right to be mentioned as such in the application and the patent title.

Enforcement and Remedies. Patents can be enforced by the right holder and by patent licensees.

Civil and criminal remedies are available.

Two main types of civil proceedings relating to patents can be filed with the Intellectual Property Court: preliminary injunctions and main actions.

Generally, civil remedies include preliminary and permanent injunctions that give the patent holder the right to prevent any imminent infringement of patent rights or to prohibit the continuation of infringements.

Damages claims for infringement are also allowed in cases of negligent or wilful infringement.

Special injunction proceedings relating to pharmaceutical patents and generic medicines are available under Law no. 62/2011.

The publication by the Portuguese Medicines Agency of a marketing authorisation application for a generic medicine triggers a 30-day period for the patent holder to invoke incompatible industrial property right(s) by applying for an injunction. Failure to file a defence will imply that the marketing authorisation applicant cannot start to sell its generic medicine until the expiry of the industrial property rights invoked in the action.

Criminal remedies for patent infringement are rarely imposed in Portugal. However, the Industrial Property Code (IPC) provides that some patent infringing actions may be punishable as crimes. Criminal penalties consist of imprisonment of up to three years or a fine.

Exclusive Right. A patent gives its holder the exclusive right to exploit the invention in any part of Portugal.

A patent also confers the right to prevent any third party, without the consent of the patent holder, from offering or making available to any person who does not have the right to exploit the patented invention, the means of performing it with respect to an essential element of it, if the third party knows or should have known that these means are suitable and intended for such performance.

Length of Protection. Patent protections lasts 20 years from the application filing date.

An extension of protection may be granted for up to five years for specific medicinal and plant products through a supplementary protection certificate (SPC). An SPC for a medicinal product can be extended for a further six months if it has undergone the appropriate paediatric testing.

Definition and Legal Requirements. Under the IPC, a trade mark can consist of a sign or set of signs capable of being represented graphically (namely words, including personal names, designs, letters, numerals, sounds, colour, the shape of the product or its packaging) if they are capable of distinguishing the goods or services of one undertaking from those of other undertakings.

Generally, to obtain trade mark protection a sign must:

Traditional marks include word and figurative marks, but non-traditional marks such as shape trade marks and sound trade marks can also be registered if they comply with the conditions for registration.

Protection. National trade mark applications are filed with the INPI.

The INPI guidelines on the submission of a national trade mark application can be found at: https://justica.gov.pt/Registos/Propriedade-Industrial/Marca/Como-registar-marcas-ou-outros-sinais.

The IPC allows the holder of an unregistered trade mark to claim priority over a sign that was used for six months before the application date, if the applicant files proof of effective use of that trade mark within that period.

Enforcement and Remedies. Trade marks can be enforced by the right holder and its licensees. Entitlement of a licensee to enforce the trade mark depends on the specific terms of the licence agreement and on registration of the licence with the INPI.

Generally, trade mark registration gives its holder the right to prevent third parties that do not have the holder's consent from using, in the course of economic activities, any identical or similar sign to the trade mark in relation to goods or services that are identical or similar to the goods or services for which the mark is registered, if there is a likelihood of confusion on the part of the public. In particular, the trade mark holder can, among other things, stop third parties from:

Civil and criminal remedies are available.

For civil remedies, see above, Patents: Enforcement and Remedies.

Trade mark counterfeiting and imitation is also a criminal offence, punishable with imprisonment for up to three years or a fine of up to 360 days.

Customs actions are also available.

Length of Protection and Renewability. The length of protection of a trade mark is ten years from the date of the application. Trade mark protection can be renewed indefinitely for additional ten-year periods.

A trade mark may be subject to revocation if, within a continuous five-year period, it has not been put to genuine use in Portugal for the products or services for which it is registered.

Definition. An industrial design is defined as the appearance of the whole or part of a product resulting from the features of its lines, contours, colour, shape, texture, materials, or its ornamentation.

To benefit from protection, a design must be new and have individual character.

Design ownership is regulated in the same way as for patents (see above, Patents).

The scope of protection conferred by a Portuguese design includes any design that does not produce on the informed user a different overall impression.

Registration. Designs are registered with the INPI.

The INPI guidelines on the submission of a national design application can be found at: https://justica.gov.pt/Registos/Propriedade-Industrial/Design/Como-registar-um-design.

Enforcement and Remedies. Designs can be enforced by the right holder and its licensees. Entitlement of a licensee to enforce the design depends on the specific terms of the licence agreement and on registration of the licence with the INPI.

Civil and criminal remedies are available.

For civil remedies, see above Patents: Enforcement and Remedies.

Infringement of design rights is also considered a criminal offence, punishable with imprisonment for up to three years or a fine of up to 360 days.

Length of Protection and Renewability. The length of protection of a Portuguese design is five years from the date of the application. Protection can be renewed for additional five-year periods, up to 25 years.

Definition and Legal Requirements. The IPC does not include provisions on the protection of unregistered designs.

However, under the Community Designs Regulation (6/2002), which is directly applicable and enforceable in Portugal, an unregistered design is protected by an unregistered community design if it was made available to the public within the Community. Unregistered design rights can protect the appearance of the whole or part of a product and may arise from the lines, contours, colours, shape, texture, material or ornamentation of the product. The design must be novel and have individual character.

Unregistered designs may also be protected by copyright.

Enforcement and Remedies. Civil remedies are available. See above, Registered Designs: Enforcement and Remedies.

Length of Protection. An unregistered design is protected for a period of three years after the date it was made available to the public within the EU.

Definition and Legal Requirements. Broadly, copyright (known as author's rights in Portugal) grants protection over externalised expressive intellectual creations, designated as "works" or "artistic, scientific or literary works."

To be protected by copyright, a work must be:

Protection. Copyright arises on creation of the work, regardless of registration, deposit, or any other formality.

However, artistic and literary works can be registered with the General Bureau of Cultural Activities (IGAC). While registration does not create any entitlement to copyright, it gives rise to a presumption that the registered right holder is entitled to the relevant right.

Enforcement and Remedies. Copyright protection encompasses economic rights and moral rights.

The general rule is that copyright belongs to the author of the work. Contractual provisions may provide otherwise.

Economic rights give the holder the exclusive right to use and dispose of the work, and to authorise its use by a third party, in whole or in part.

Moral rights refer to the right to claim authorship of the work and to protect the integrity of the work.

Civil and criminal remedies are available for infringement.

For civil remedies, see above, Patents: Enforcement and Remedies.

Copyright infringement may also constitute a criminal offence, punishable by imprisonment of up to three years and a fine of 150 to 250 days. These criminal sanctions also apply to infringements of moral rights.

Administrative proceedings may be available in certain circumstances.

Length of Protection and Renewability. The author's rights expire 70 years after the author's death, even if the work was published or disclosed posthumously.

For a collaborative work, the length of protection is 70 years after the death of the author who died last.

The length of protection of an anonymous work is 70 years after publication or disclosure.

Other IP rights are recognised in Portugal, such as:

Only agency agreements are specifically regulated (see below, Agency). Other marketing agreements are governed by general contract law contained in the Civil Code and the Commercial Code. In some cases, the rules on agency agreements may be applicable by analogy.

There are no nationality restrictions on local representatives, and marketing agreements do not need to be notarised.

Agency agreements are regulated by Decree-Law no. 178/86 of 3 July 1986, last amended by Decree-Law no. 118/93 of 13 April 1993, which implements the Commercial Agents Directive (86/653/EEC).

Distribution agreements are not specifically regulated. Therefore, the general rules on contracts of the Commercial Code and the Civil Code apply to these agreements. Case law and authors have consistently sustained that the legal rules on agency can be applied by analogy to distribution agreements, given the similarities of the contractual relationship.

Franchising agreements are not specifically regulated. Therefore, the general rules on contracts of the Commercial Code and the Civil Code apply to these agreements. Case law and authors have consistently sustained that the legal rules on agency can be applied by analogy to franchising agreements if the specific contractual relationship justifies that application. This must be assessed on a case-by-case basis.

E-commerce is regulated by:

Other relevant laws include the:

Consumer laws also apply, including:

These regulate certain aspects of sales of consumer goods and associated guarantees.

All online information directed at the Portuguese market must be provided in Portuguese.

There are no specific rules applicable to online platforms apart from the regulations on e-commerce and consumer laws.

Online advertising and price comparison are regulated (see Question 35).

Decree-Law no. 330/90 of 23 October 1990, last amended by Law no. 30/2019 of 23 April 2019, regulates advertising in Portugal (Advertising Code). The Advertising Code sets out the legal requirements applicable to advertising (for example, the obligation to provide true and accurate information). It also regulates advertisements of specific products, such as alcohol, tobacco, certain types of food, and gambling.

Consumer laws also apply.

Law no. 41/2004 of 18 August 2004, amended by Law no. 46/2012 of 29 August 2012, imposes an obligation to obtain consent before storing cookies (or similar technology) in the terminal equipment of users. This also applies to cookies used for advertising purposes, regardless of whether they collect personal data.

Consumer laws otherwise govern the:

Law no. 41/2004 implements the Privacy and Electronic Communications Directive (2002/58/EC) and includes requirements applicable to direct marketing.

Decree-Law no. 70/2007 of 26 March 2007, last amended by Decree-Law no. 109/2019 of 14 August 2019, regulates retail sales with reduced prices (sales promotions) and seeks to ensure consumer protection against unfair competition. This Decree-Law also applies to distance selling.

The following requirements apply:

The sales period (for sales to clear stock rapidly at a reduced price that must be lower than the lowest price offered up to 90 days before the sale) can take place any time of the year. However, the sales period must not last more than 124 days a year. The seller must give five days' prior notice of the sales to the supervisory authority.

Other promotions are not subject to time restrictions and prior notification.

Decree-Law no. 166/2013 of 27 December 2013, last amended by Law no. 2/2020 of 31 March 2020, which places restrictions on some practices deemed to be unfair competition, also applies.

In Portugal, the main laws that regulate data protection are the:

There are no specific consumer privacy laws, but there are privacy laws that have an impact on consumer relationships (such as Law no. 41/2004). Data protection regulations, which apply to any processing of personal data, are also relevant.

Product liability is regulated by Decree-Law no. 383/89 of 6 November 1989, as amended by Decree-Law no. 131/2001 of 24 April 2001. Product liability rules are mandatory and cannot be varied by contract. Under the applicable rules, a producer is liable, regardless of fault, for damage caused by defects in the products it puts into circulation (strict liability).

Product safety is governed by Decree-Law no. 69/2005 of 17 March 2005, as amended by Implementing Decree no. 57/2007 of 27 April 2007. Under this Decree-Law, a producer has a general obligation to place safe products on the market. In addition, a producer may be obliged to withdraw dangerous products from the market, and, as a last resort, recall them. Specific-product safety legislation may apply to specific categories of products (such as pharmaceutical products, toys, and dangerous substances).

Law no. 24/96 of 31 July 1996 (as amended) establishes the general rules on consumer protection, which may apply in the context of product liability claims.

Additionally, Decree-Law no. 67/2003 of 8 April 2003, as amended by Decree-Law no. 84/2008 of 21 May 2008, imposes on the seller a duty to deliver to consumers goods that conform to the sales contract.

The Civil Code also plays an important role and applies to situations not covered by the above rules.

Producers of defective products may also be liable for administrative and criminal offences.

The Competition Authority is the administrative authority with responsible for ensuring compliance with competition rules in Portugal. It operates under Law no. 19/2012 and its own statutes.

Main Activities. The Competition Authority has regulatory, supervisory, and disciplinary powers. Its main activities include:

There are central, regional, and local bodies regulating environmental matters in Portugal. These include the:

These bodies are responsible for licensing, authorising, monitoring, and inspecting activities that have an impact on the environment.

The key regulatory authorities are the:

All three are part of the European System of Financial Supervision.

Bank of Portugal. The Bank of Portugal is the central bank of Portugal. The Bank is a public law legal person with administrative and financial autonomy, and its own assets.

The Bank's mission is to maintain price stability and promote the stability of the financial system.

The main functions of the Bank are to:

CMVM. The CMVM is the Portuguese securities market authority. It is a public law legal entity with administrative and financial autonomy and its own assets.

The CMVM's mission is to regulate and supervise the financial instruments markets, as well as the agents operating in those markets, in accordance with the Portuguese Securities Code and complementary legislation.

The main functions of the CMVM are to:

ASF. The ASF is the authority responsible for the regulation and supervision of insurance and pension funds activities. It is a public law legal person with administrative and financial autonomy, and its own assets.

The ASF's mission is to ensure the regular operation of the insurance and pension funds market, by promoting the stability and financial soundness of the entities under its supervision, and by ensuring that they maintain high standards of conduct. Its main purpose is to protect policyholders, insured parties, subscribers, participants, beneficiaries, and injured parties.

The main functions of the ASF are to:

The Portuguese National Data Protection Commission (Comissão Nacional de Proteção de Dados) (CNPD) is the Portuguese commission for data protection.

The CNPD is a public law legal person, with administrative and financial autonomy and its own assets. It operates within the Portuguese Parliament.

The CNPD's mission is to supervise compliance with the GDPR, Law no. 58/2019, Law no. 59/2019, Law no. 41/2004, and other legal and regulatory provisions on the protection of personal data, to defend the rights, freedoms and guarantees of individuals with regard to the processing of their personal data.

The main functions of the CNPD are to:

Not applicable.