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The Bank of Portugal has issued a notice on the applicability to payment institutions of a number of previously issued regulatory notices. Among other things, payment institutions must comply with its notices on uses of own funds, provision for credit and other risks, the provision of client information and the requirement to prepare consolidated and non-consolidated financial statements.

The Council of Ministers has approved a legislative decree that transposes the EU Payment Services Directive into Portuguese law. In addition to defining the categories of entity that may provide payment services, the decree stipulates prudential requirements for such entities and requires them to guarantee the transparency of the conditions and information requirements relating to their services.

As a result of a new legislative decree, the legal framework governing banking practices for the granting and renegotiation of mortgages - which covers interest calculation, early repayment, associated sales and duties of information and disclosure - now applies to other loans secured by the same property.

A new legislative decree sets out the information duties of credit institutions that wish to link life insurance contracts to mortgages. It reinforces consumer protection measures by establishing the required minimum content of life insurance contracts that may be offered to persons seeking a mortgage.

The Portuguese legislature has once again reacted to the problems in the financial sector, introducing changes to promote the disclosure of information about board-level remuneration in public-interest entities, including in the banking sector, and tasking the Bank of Portugal to supervise the credit institutions' lending to certain borrowers.

The Bank of Portugal has published details of a regulatory initiative that would impose greater duties on credit institutions to disclose the list of fees and interest rates that they levy on products and services. A notice and instruction set out details of the information required and the manner of its presentation.

More updates >

Capital Markets


According to the Securities Market Commission, 47 of the 50 companies listed on Euronext Lisbon have some form of limitation on voting rights. The commission's latest measures are aimed at improving corporate governance by promoting the principle of one share, one vote in order to increase the proportionality between investment and influence at shareholders' meetings.

Company & Commercial


The signature on a promissory note of a partner in the capacity of manager (where such capacity is not stated in the Commercial Register) is not binding on the company - despite the production of minutes attesting to the fact that the partner was entrusted with the management of the company - if such minutes were not signed by another partner whose managerial capacity is recorded in the register.

The Companies Code provides that a private limited company is not bound by the signature of only one of its directors if its articles of association provide that the signatures of two directors are required to bind it, unless the company ratifies the action. However, a Supreme Court judgment has cast doubt on the safety of legal transactions by reversing an established view of directors' responsibility.

An amendment to the rules governing the Court of Auditors extends the scope of the court's financial supervision to include undertakings which hold a concession for public works and services and for the management of undertakings, state-owned companies and semi-public companies.

Significant changes to the Portuguese Companies Act have streamlined the procedure for amending company bylaws by doing away with the requirement for a notarial deed in many cases. The new administrative requirements make it easier for companies to increase or reduce their share capital.

A new system of online incorporation offers an immediate, cheap and convenient way to create and register a company. Even if the applicant chooses not to use one of the pre-approved templates for the articles of association, the process will take no more than two business days.

A recent Supreme Court decision examined the effect of Article 409(2) of the Companies Code, which sets out the principle that, in all actions performed by a company's directors which fall outside the scope of the company's activity, the company’s interests take priority over those of third parties.

More updates >



Including: Who is Qualified to Build?; Registration; Licence; Subcontracting; Contractor's Obligations; IMOPPI Supervison; Liability for Administrative Offences; Criminal Liability.

It is the owner's duty to verify whether works are in the agreed condition and free of defects before accepting them. As such, the inspection of the works is a right, but also a burden that the law imposes on the owner, since failure to carry out the inspection implies acceptance of the works without reservation. Inspection must occur within a reasonable period of time.

Under Portuguese law, contractors can revise the price quoted in public works contracts in case of unforeseen changes to the circumstances on which the contract is based. A new regime extends the scope of this mechanism to private works agreements and public goods and services purchase agreements - a timely development, given recent increases in steel prices.

Corporate Finance/M&A


The Portuguese government has decided to revoke Decree-Law 380/93, which requires the authorization of the minister of finance for the acquisition of stakes of over 10% in companies undergoing reprivatization. The government has thus brought the legislation into line with European law and prevented the commencement of infringement proceedings by the European Commission.

The squeeze-out right included in the Companies Code has proved controversial since its introduction in 1986. The Portuguese ombudsman recently challenged the legality of this provision before the Constitutional Court, but the court ruled that it is valid since it breaches no constitutional rights, liberties or guarantees.

Including: Private Acquisitions; Public Takeovers; Mergers; Divisions; Recent Developments.

Recent legislative reforms relating to major investment projects have created a favourable environment for both national and foreign investors to contemplate M&A transactions, joint ventures, takeovers and similar deals. The creation of the new Investment Agency is central to this policy.

Insolvency & Restructuring


The Porto Court of Appeal has ruled that Article 192(2) of the Insolvency and Corporate Rescue Code does not preclude the reduction or waiver of debts, as these two legal measures have an effect on liabilities and are expressly provided for in Article 196(1)(a) of the code.

The financial crisis has led to greatly increased use of insolvency proceedings in Portugal. However, such proceedings are not only slow and inefficient, but also open to misuse, as many recent petitions for declarations of corporate insolvency have failed to fulfil specific legal requirements.

Acquiring distressed businesses has benefits and risks. Portugal's legislative framework is likely to be further tested in the present economic climate and a would-be acquirer must ensure that it understands the full effects and implications of the Portuguese insolvency regime.

The Constitutional Court has struck down an interpretation of Article 30(2) of the Insolvency and Corporate Rescue Code that disproportionately disadvantaged creditors. The court of first instance had held that if a debtor fails to submit a list of its five main creditors with its statement of opposition to an initiation of insolvency proceedings, it may not do so retrospectively and its opposition will be void.

The Constitutional Court has ruled on the constitutionality of two provisions of the Insolvency and Corporate Rescue Code. The court was asked to consider whether the managers of a bankrupt company may be prohibited from carrying out actions in relation to the company's assets or may be banned from engaging in business or holding a position within the governing body of a corporate entity.

Creditors' privileges have always been a cumbersome issue in Portuguese civil and banking law. A Constitutional Court decision that ranked mortgage creditors ahead of employees with a claim for unpaid wages is welcome news for banks, but the court's subsequent comments on Labour Code provisions on employers' privilege creates an additional concern for mortgage lenders.



Portugal has an extensive network of highways, some of which are managed by public limited companies under concession contracts executed with the state. A recent decision centred on the potential liability of these companies in the context of an accident. However, the decision appears to be fairly partial and a degree of prejudice during the trial was evidenced.

Under the Code of Civil Procedure, failure to produce a power of attorney has catastrophic consequences: it is treated as though the party did not intend to defend itself and the defence is duly withdrawn. However, this appears to contradict other provisions of Portuguese law and may also be unconstitutional.

A new decree-law has substantially overhauled enforcement proceedings in Portugal. It is hoped that the entry into force of the new regime in September this year will mark a turning point and will help to ease the administration of justice.

The option to record evidence presented to a court of first instance is necessary in order to protect the rights of citizens who have recourse to the judicial process, as it permits reconsideration of the facts by a court of appeal. It also speeds up court proceedings, which leaves assistant judges free to try other cases.

A Portuguese court recently handed down a landmark judgment against the state for failure to legislate. It awarded damages of approximately €600,000 to the parents of a child who was sucked into the pipes of a swimming pool at a water park, because had such facilities been properly regulated by the state their son’s death could have been prevented.

Real Estate


A recent government order has approved a new technical file model for residential buildings, which aims to strengthen consumers' right to information and protect their interests when acquiring a residential building. Detailed technical information on residential buildings must be collated and made available to prospective buyers before purchase.

White Collar Crime


The Criminal Procedure Law imposes limits on searches and seizures in places subject to professional secrecy, such as law offices, medical offices and banks. However, these searches have become routine in too many criminal investigations and are being used as an easy means of gathering evidence.

The Council of Ministers has announced the approval of two proposals to amend both the Penal and Criminal Procedural Codes. The proposals will now be submitted to Parliament for discussion and approval. The most significant – and also most controversial – proposed change to the Penal Code relates to the duration of the suspension of the statute of limitations, which has been greatly increased.

Plans to introduce a new crime of illegitimate wealth into the Penal Code have been delayed by the Constitutional Court. Among other things, it held that the proposed amendment to the code would violate the principle of the presumption of innocence, as a discrepancy between a person's wealth and that person's legitimate income and assets would be presumed to be illicit.

A new amendment to the Penal Code may provide a crucial mechanism for preventing corruption, targeting all assets in Portugal or abroad and forcing individuals and companies to provide a full picture of their accounts to the tax authorities. However, doubts remain over whether the new provisions are constitutional.