Portuguese due diligence are generally similar to any other due diligence. There are, however, some legal features with an impact on the risk assessment of the potential buyer that should be considered in a due diligence of a Portuguese target company.

In general, a due diligence may comprise four main stages:

  • Drafting a checklist incorporating all information to be requested to the target;
  • Reviewing information and drafting a preliminary plan with the most relevant topics for each exposure area;
  • Drafting a preliminary report with the assessment of all relevant information/documentation;
  • Drafting a final report (after requesting other relevant data related to the business, if necessary);
  • and These stages are indicative and may vary on a case-by-case basis. In some cases, a due diligence process may even continue to be relevant in a post-closing term.

A due diligence process occurs throughout the proposed transaction, which may be concluded in a few weeks or months. 

An effective selection of all relevant information, limiting the scope of the matters related to the business, may be crucial for a due diligence to be carried out correctly and avoid undesirable surprises.

The length of a due diligence process may depend on several issues: (i) how much time and monetary resources the potential buyer may spend, (ii) the exposure areas to be covered (iii) the documentation/information to be reviewed, (iv) the need to hire specialized consultants and many other relevant business aspects.

Although there is no a preferred outcome, it is crucial that the collected information confirms the real situation of the target company. The target company may be subject to different regulatory obligations due to its nature or the nature of its business. The legal framework governing Portuguese companies and Portuguese law contracts, should be properly assessed.

This paper reviews the most relevant aspects in a due diligence of a Portuguese target and certain legal and regulatory aspects affecting Portuguese due diligences that should be considered by foreign buyers and their legal advisors.