The United States lead the World Economic Forum’s competitiveness global ranking, followed by Singapore and Germany. EU countries take half of the top 10 positions.
The World Economic Forum’s 2018 edition of «The Global Competitiveness Report» assesses the performance of 140 countries in 98 relevant topics divided in 12 different subjects, including, among others, infrastructure, health, financial system, market size, business dynamism and innovation capability.
For the first time since the financial crisis of 2008, the United States topped the global ranking, much due to the successful combination of an outstanding performance of its financial system with significant funds made available for venture capital and financing of SMEs (a leading 5.6 and 5.8 out of 7 in both indexes), fluid product and labour dynamics (with notable marks on HR practices and mobility) and the market size, second only to China.
Germany was 1st among the EU countries and 3rd in the global ranking. Singapore took the 2nd place. Switzerland and the Netherlands move down.
Portugal moves up from 42nd place in 2017 to 34th and from 18th to 16th in the ranking of EU countries.
EU countries kept half of the first 10 positions. The EU as a whole improved its performance with better rankings and additional Member-States in the top fifty economies.
China and India did not move up on the charts but added 0.9 and 1.2 points to their 2017 scores, respectively. There is still a substantial gap to the leaders in the innovation race, where China and India rank 24th and 31st respectively.
The EU, Portugal included, performed better in the WEF report, showing good results on improving the competitiveness of its economies, than in the World Bank’s «Doing Business 2019», where the EU is losing ground to emerging countries in the attraction of investors.
Portugal has its highest performance in the following pillars: Infrastructure, 19th, Health, 23rd, and Business dynamism, 27th.
The World Economic Forum points out the vulnerabilities of the small size of Portugal’s domestic market, which is an unavoidable fact that can only be compensated by a dynamic exporting economy, and Portugal’s fragile macro-economic stability, especially because of the debt dynamics where Portugal scores 70 points in 100, in line with Italy and ahead of Greece by almost 30 points. Portugal drops seven positions in the employment pillar Skills, but improves in half of the indexes related to the training of its workforce.
The Global Competitiveness Report 2018 highlights Portugal’s reputation as a jurisdiction with business dynamics and as the innovation hub in Southern Europe, leading the region in the growth of innovative companies, scoring 8.3 more points than Spain and 17.9 more than Greece.
Portugal improved significantly in the strength of institutions pillar, moving up 13 positions to 30th place.
Portugal achieves its best performance in crime-related incidences, 12th, road quality, 5th, electrification rate, 1st, inflation, 1st, and the prevalence of non-tariff barriers on product markets, 5th.
In total, Portugal scores 10.2 points above the average of all 140 economies. Portugal closed the gap to 12.4 points to the 10 most competitive economies.
For further information about Portugal’s economy and key legal aspects visit our web-platform «Why Portugal».
Together with the rules on processing of personal data set out by the Regulation 2016/679 of 27 April 2016 (GDPR), which has applied since May 25, 2018, the European Union (EU) establishes new rules on processing of non-personal data.
The European Parliament approved a new regulation – Regulation 2018/1807 of 14 November 2018 –, which seeks to promote free movement of non-personal electronic data within the EU where: (i) the data processing is provided as a service to users with residence or establishment in the EU, regardless of whether the service provider is established or not in the EU, or (Ii) the data processing is carried out, for own needs, by individuals or businesses in the EU.
But, after all, what does “non-personal data” mean? In contrast to "personal data", non-personal data is any information that does not refer to an identified or identifiable natural person (individuals). Examples of non-personal data include aggregate and anonymised datasets used for analysing large volumes of data in the current context of strong development of the Internet of things, Artificial Intelligence, autonomous systems and 5 G.
In order to enable the free movement of non-personal data in the EU, Member States are obliged to repeal all non-personal electronic data localisation requirements established in their local laws until May 30, 2021. If, however, this removal could be detrimental to public security, the Member State should consult the European Commission, which, after examination, may decide whether the Member-State shall keep (or not) the localisation requirements.
The rule will be, however, the free movement of non-personal electronic data in the EU, including data portability to professional users. This may be only limited or prohibited for justified public security reasons.
Considering that non-personal data and personal data may coexist, as there is no obligation to separately store these different types of data, the new regulation applies together with the GDPR. Thus, if, for example, technological developments make it possible to turn anonymised data into personal data, such data is personal data and the GDPR will apply.
This may raise new legal issues (and ethics), particularly where decisions are taken without human interaction, including, among others, issues concerning data access and reuse and the issue of liability along the entire value chain of data processing.
In the future, the European Commission will be in charge of drafting codes of conduct with best practices and information requirements in order to ensure full transparency and interoperability in the so-called “data economy and emerging technologies."
In recent years, Lisboa has become a popular city to visit. Since 2016, when the annual edition of the Web Summit, the largest startup event in the World, was hosted for the first time in Portugal. Lisbon is now also a popular city for entrepreneurship, innovation, internationalization and financing of startups. In 2017, the Web Summit brought around 60,000 visitors and 2,250 companies from 170 different countries, and had an overall estimated impact of € 300,000,000 in the Portuguese economy.
The Portuguese Cabinet has approved (by its Resolution 149/2018 of 15 November) the agreement between the Portuguese State, the Municipality of Lisboa, the Portuguese SME support agency (IAPMEI) and Connected Intelligence Limited, the Web Summit organizer, to stage this event in Lisbon for 10 more years, from 2019 to 2028.
Alongside with the hosting of the event, The Portuguese tourism agency (Turismo de Portugal) and IAPMEI will provide to Connected Intelligence Limited a total of € 80,000,000 in 10 yearly instalments of € 8,000,000.
The Portuguese Economy Minister will monitor the organization of the Web Summit, to ensure that it promotes the image of Portugal and of the Portuguese companies abroad, it attracts high technological value investment and it leads to general national economic growth, as expected.
The amendments to the Gothenburg Protocol dated may 4th 2012 have set the tone for new commitments regarding environmental matters, in particular for the reduction of anthropogenic air emissions.
Being a party to the Gothenburg Protocol, the European Union (“EU”) must impose to the State-Members measures to reduce emissions of air pollutants between 2020 and 2029 in accordance to EU Directive 2016/2284 (the “National Emissions Ceilings Directive”).
This EU Directive is now being transposed by the Portuguese State trough Decree-Law no. 84/2018, of October 23, that provides for
(i) Mandatory reductions of Sulphur dioxide, nitrogen oxides, non-methane volatile organic compounds; ammonia; and fine particulate matter;
(ii) The creation of National Air Pollution Control Program (Plano Nacional de Controlo da Poluição Atmosférica), by the Portuguese Environment Agency (Agência Portuguesa do Ambiente), which must be in accordance to the Guidance on the elaboration and implementation of the initial National Air Pollution Control Programmes under the new National Emissions Ceilings Directive. The Program shall consider measures applicable to all relevant sectors, including agriculture, energy, industry and road transport, among others and guarantee that they’re in accordance to other existent environmental programs;
(iii) An obligation to update this Program every four years;
(iv) The prohibition of the use of ammonium carbonate fertilizers, being that such use constitutes a serious administrative offence.
This new regulation becomes effective on October 28th but is not applicable to the autonomous regions of Madeira and Azores.
From 1 January 2019, travelers, who purchase a package or linked travel arrangement by using online means (e.g. Internet or telephone) or offline from travel agencies (e.g. consumer’s domicile or workplace), will benefit from stronger consumer rights.
Businesses must inform travelers whether they are offered a package or linked travel arrangement, on their key rights through standardized information forms.
Before the purchase, they must provide to Portuguese travelers with a set of information, in Portuguese language, on the main features and characteristics of the package, the total price (including taxes), additional charges or costs, if any, arrangement for payments, among others.
Whenever the travel package or arrangement is purchased by online means, the travel agency must ensure that consumers expressly and intentionally confirm that finalizing the order will imply a payment of the service. If the service provider does not fulfill this obligation, the payment may not be required.
If the telephone is used to enter into a contract, consumers will be bound to contractual terms after signing the offer, or send his/her written approval to the service provider, unless a first approach is made by the consumer.
Businesses usually make available telephone hotlines for customer service purposes, including provision of information. In these cases, consumers may not be charged with additional costs other than basic charges.
This stronger protection is set out by Decree 78/2018, of 15 October 2018, and exclusively applies to travelers, who are consumers. The new rules aim to benefit those travelers, who purchase a package or linked travel arrangement, from an online or offline point of sale, for non-professional purposes only.
The professor and senior consultant Guilherme Machado Dray is now Partner at Macedo Vitorino.
Guilherme has been in the firm since 2015 as Of Counsel, with special focus on employment law and collective bargaining.
With the increasing number of clients, the labour team, now with six lawyers and two trainees, led by Guilherme Dray with the support of senior associate Inês Coelho Simões, has also been restructured and strengthened with the hiring of a new associate, Daniela Verdasca.
For Managing Partner, João Macedo Vitorino, "the nomination of Guilherme Dray is the result of his human qualities and the technical capacity he has demonstrated in the area of practice in which he works and also by the alignment with the culture and goals of Macedo Vitorino."
Guilherme has over 20 years of experience in the public and private sectors. He has performed academic functions, being Professor in the Lisbon University School of Law and researcher at the Centre of Research of Private Law of that University. He was Visiting Professor at Georgetown University, in Washington, and is the author of several scientific publications. He held advisory functions in the Portuguese Government and worked as manager and consultant in consulting firms, mainly in the Media, Telecommunication, and Technology as well as in Building Capacity areas in Portugal and in many other Portuguese-speaking language countries such as Brazil, Angola and East Timor.
The “Startup Visa” is a hosting program focused on foreign investors who intend to develop an enterprise or innovative project in Portugal. Such entrepreneurs may apply for a residence authorization/visa if certain requirements are met.
This program establishes that only “certified incubators” can be responsible for supporting the development of new businesses, the provision of equipped spaces, and administrative and marketing assistance under an incubation agreement eligible candidates.
The certification process for incubators within the “StartUP Visa” program is now completed and the final list of “certified incubators” is now available at IAPMEI’s website.
New amendments to the Portuguese Labour Code have entered into force regarding the legal framework in the event of a transfer of undertaking, or parts of undertaking that constitute an economic entity (“TUPE”).
In the event of application of the TUPE, the employment agreements previously concluded remain in force. However, under the new rules, if the transfer of the employment agreement causes “serious damage” to the employee, namely by the transferee’s evident insolvency or difficult financial situation or, also, if the employee does not trust transferee’s policies regarding work organization, the employee can now:
- Oppose the transfer of his/her employment agreement, maintaining the transferor as the employer of the employee; or
- Terminate the employment agreement, which entitles the employee to a monetary compensation equivalent to 12 days of base salary and seniority allowances multiplied by the employee’s seniority, capped by 12 base salaries and seniority allowances.
Regarding information and consultation to employees, in addition to the information relating to the date and motives of the transfer, its legal, economic and social consequences for the employees, as well as the prospective measures regarding the employees, the transferor and the transferee are now obliged to provide information on the content of the transfer contract, providing the law with a duty of confidentiality for those who obtain this information.
Another relevant change to the TUPE regime relates to the participation of representatives of the Authority for Working Conditions (“ACT”), which may be requested by any party involved in the transfer. The intervention of the ACT aims to promote, namely, the consultation’s material and procedural regularity and validity, and the insurance of respect and compliance with the employees’ rights.
The transferor shall now be jointly and severally liable with the transferee for the due obligations during the two years following the date of transfer of the undertaking, and not for just one year.
These amendments enter into force starting today.
The recently enacted Law 7/2018 allows creditors to convert into share capital their senior credits over commercial companies with head-office in Portugal.
The following companies may benefit from this scheme:
- Companies with a turnover above €1,000,000;
- State owned companies previously authorized by the Minister of Finance.
Insurance companies, credit institutions, financial companies, investment companies and listed companies are excluded.
The conversion of claims into capital depends on the proposal of creditors whose claims represent two-thirds of the company's liabilities or the majority of senior claims.
For such proposal to be possible, the equity (capitais próprios) of the company must be lower than the share capital and at least 10% of the senior claims (or 25%, if senior loans) must be in default for more than 90 days.
The proposal for the conversion of claims into capital must be accompanied by a report prepared by a chartered accountant and a document containing the proposed share capital increase. The share capital increase may be preceded by a share capital reduction to cover accumulated losses.
After the conversion, the equity of the company must exceed the value of its share capital.
Shareholders will have a pre-emption rights in the subscription of the share capital increase and the shareholders who exercise it may subscribe and pay for the shares that would belong to the shareholders who choose not to exercise the right, in proportion to their respective shares.
The conversion must be approved by the shareholders in a shareholders meeting within 60 days from the proposal’s notice to the company. If the shareholders meeting is not held or the proposal is rejected, the creditors may obtain a judicial order from the relevant court replacing the shareholders meeting resolution on the conversion of claims into capital.
Before the judicial order is issued, any creditor is entitled to submit a proof of claim and request the conversion of its claims into capital.
After the judicial order is issued, the shareholders will be entitled to acquire the new shares by their nominal value, provided that they pay the remaining claims held by the creditors that proposed the conversion.
The «Why Portugal» platform is a pioneer project developed by Macedo Vitorino which offers economic, political, and legal information online, in an easy to access format.
The «Why Portugal» platform goes further than the «Why Portugal» investment guides published by Macedo Vitorino & Associados since 2014 as well as other national and international investment guides which are available in PDF and paper formats.
«Why Portugal» is available in Portuguese and English and organised in nine chapters, which describe how to set up a business, forms of investment incentives and government grants, how to apply and obtain a Portuguese residence permit or a golden visa, Portugal’s main taxes, acquiring and leasing property, hiring employees, intellectual property, software, patents trademarks and technology and dispute resolution.
The «Why Portugal» platform also includes a database of documents and publications in each chapter which gives easy and quick access to laws, official documents, reports from national and international organisations, official forms and contract templates.
“The project «Why Portugal» aims to be provide useful information to investors about Portugal. We believe that the promotion of investment should start by explaining in a simple and accessible manner the economic, political, social and legal conditions that interest investors. With this new platform we want to give investors access to the tools we use every day, giving away some of our own contract templates and forms.”, stated António de Macedo Vitorino, project coordinator and partner of Macedo Vitorino.
In preparing the «Why Portugal» website we used international sources, such as the World Bank, the World Economic Forum and the European Commission, which provide basic information to international investors about Portugal’s key economic, political and legal information and its competitive advantages when compared to other investment destinations in Europe.
To learn more about «Why Portugal» please go to https://www.macedovitorino.com/en/why-portugal/
This project reinforces Macedo Vitorino’ digital portfolio and online presence, following the launch, in 2016, of «MVStart», a program that aims to support the creation of startups in Portugal.