The Portuguese Government has approved Decree-Law 14/2025, of 17 March (“DL 14/2025”), which amends the Credit Institutions and Financial Companies Law with the aim of finally implementing in Portugal the following legal instruments:
- Regulation 2020/2223, which amends Regulation (EU, Euratom) N.º 883/2013 regarding cooperation with the European Public Prosecutor’s Office and the effectiveness of investigations conducted by the European Anti-Fraud Office;
- Regulation 2022/2036, which amends Regulation (EU) N.º 575/2013 and Directive 2014/59/EU, particularly with regard to the prudential treatment of global systemically important institutions; and
- Directive 2024/1174, which amends Directive 2014/59/EU and Regulation (EU) N.º 806/2014 concerning the minimum requirement for own funds and eligible liabilities.
With regard to the first regulation, DL 14/2025 authorises the Bank of Portugal to disclose information contained in its databases, subject to banking secrecy, to the European Anti-Fraud Office (“OLAF”), in accordance with Regulation (EU, Euratom) No. 883/2013.
With regard to the other two legal acts, DL 14/2025 introduces amendments to the banking resolution regime.
On one hand, it includes the definition of “liquidation entities” (i.e. entities that are expected to be wound up under a resolution plan) and exempts them from complying with the minimum requirement for own funds and eligible liabilities — better known as “MREL”. However, it allows the Bank of Portugal to impose a minimum amount of own funds and eligible liabilities exceeding the amount necessary to absorb losses, which the entity must meet through one or more of the following elements:
- Own funds;
- Claims that meet the eligibility criteria; and
- Claims arising from debt instruments.
On the other hand, it allows the Bank of Portugal to apply the own funds requirement on a consolidated basis to a “subsidiary” — and no longer solely to the parent company — if certain conditions are met, namely that the subsidiary is directly owned by the resolution entity. In this case, and for the purpose of complying with the requirement, DL 14/2025 recognises the eligibility of claims issued or contracted in favour of the resolution entity belonging to the same resolution group and subscribed by it, as well as the claims issued or contracted in favour of shareholders of the entity in question who do not belong to the same resolution group.
DL 14/2025 has entered into force on 22 March 2025.
According to Portuguese media, the shareholders of Novo Banco S.A. ("Novo Banco") have initiated the sale of a 25-30% stake in Novo Banco through an IPO and have appointed Bank of America, Deutsche Bank, and JPMorgan Chase as financial advisors and the Portuguese office of the international law firm Linklaters as legal advisor.
Novo Banco is Portugal's fourth largest bank, providing a variety of financial services, including deposits, loans, insurance products, credit cards, and online banking with a retail network of 290 branches and representative offices in Spain and Switzerland.
Novo Banco was established on August 3, 2014, following the Bank of Portugal's resolution of Banco Espírito Santo, S.A. ("BES"). The BES resolution involved transferring certain "good" assets, liabilities, off-balance sheet items, and assets under management from BES to Novo Banco, leaving former BES as the bad bank.
The Portuguese Resolution Fund made an initial investment of €4,900 million to ensure Novo Banco's solvency and operational continuity.
In December 2015, the Bank of Portugal made a controversial decision to retransfer €2,000 worth of senior bonds back to BES, citing the need to strengthen Novo Banco’s balance sheet and meet regulatory capital requirements. The retransfer affected many small investors as well as several large international institutional investors and led to litigation in the Portuguese courts. Litigation is still ongoing but it cannot affect Novo Banco which is ringfenced under the Portuguese banking resolution laws.
On October 18, 2017, Nani Holdings, SGPS, S.A., a company owned by the American private equity fund Lone Star, acquired a 75% stake in Novo Banco. This acquisition was carried out through share capital increases of €750 million in October 2017, and €250 million in December 2017. The remaining 25% shares are controlled by the Portuguese State and the Portuguese Bank Resolution Fund.
As part of the sale to Lone Star the parties entered into a Contingent Capitalisation Agreement ("CCA"), a financial support mechanism financed by the Portuguese Resolution Fund, which was designed to ensure that Novo Banco maintained the agreed capital levels to support its operations during the restructuring phase. Under the CCA, the Portuguese Resolution Fund was obliged to inject capital into Novo Banco if certain losses materialised on contingent assets.
The State aid granted to Novo Banco was subject to conditions imposed by the European Commission to safeguard competition in the Portuguese financial and banking markets. These conditions included: restrictions on the management of assets under the CCA, oversight by a statutory advisory monitoring committee, and a prohibition on distributing dividends to shareholders.
The CCA was originally set to end in December 2025. However, Lone Star and the Resolution Fund agreed to terminate CCA earlier, allowing Novo Banco to resume dividend distributions.
With the termination of the CCA:
- all disputes between Novo Banco and the Resolution Fund concerning unpaid amounts under the CCA (estimated at approximately €400 million) are ended;
- no further capital injections or other payments can be claimed;
- the monitoring committee is dissolved; and
- the asset management restrictions and the limitations on the distribution of dividends are lifted.
Lone Star, Novo Banco's main shareholder, will receive €900 million in dividends and the Portuguese State, which directly and indirectly holds the remaining 25 percent, will receive €300 million.
In 2024, Novo Banco reported total assets of €45,044 million and total liabilities of €40,490 million, with an EBITDA of €200 million. The bank's strong results are due, among other things, to the sale of non-performing loans ("NPLs"), lowering its gross NPL ratio to around 3.5% and significantly improving the bank's asset quality ratios.
Reports suggest that Novo Banco's IPO valuation should range between €4,800 million and €6,200 million. Although an IPO seems the most likely way for the shareholders to start the sale of Novo Banco, a private sale cannot be excluded yet.
According to the press, Caixa Geral de Depósitos ("CGD"), the state-owned bank, and Millennium BCP, the two largest Portuguese banks, may be interested in acquiring control of Novo Banco. Spain's Caixabank, which owns BPI, one of Portugal's largest banks, and Santander, another Spanish bank with a strong presence in Portugal, might also consider acquiring Novo Banco. However, a sale to any of these entities could raise competition concerns due to the size of Novo Banco and the potential scale of the combined entity resulting from the acquisition. Smaller Spanish banks, international banks, and private equity firms could also explore this opportunity, given the overall growth prospects of the banking sector.
KEY INFORMATION
Main Shareholders
- Lone Star Funds, through Nani Holdings S.à.r.l. (75%)
- Resolution Fund (13.5%)
- Direção-Geral do Tesouro e das Finanças (12.5%)
Main Subsidiaries
- BEST – Banco Eletrónico de Serviço Total, S.A. (online banking)
- GNB Gestão de Ativos – Sociedade Gestora de Organismos de Investimento Coletivo, S.A. (portfolio management)
Financial Information
- Total assets: €45,044 million
- Total Liabilities: €40,490 million
- EBITDA of €200 million
- Net Profit: €610.4 million
- Net Interest Income: €886.3 million
- Loans to Costumers: €27,600 million
- Commercial Banking Income: €370.6 million
Law 16/2025 authorizes the Government to partially transpose Directives (EU) 2020/285 and (EU) 2022/542 ("Directives"), establishing the framework for a future VAT exemption regime for small businesses.
The aim of the new legislation is to establish clearer and more specific conditions for the application of the special VAT exemption scheme for small businesses, simplifying the regime and ensuring a more effective and uniform application throughout the European Union.
Among the main changes to be approved by the Government, as set forth in Law 16/2025, are the definition of stricter criteria for the application of the exemption regime, the determination of situations in which the regime ceases, the adaptation of declarative and invoicing obligations, the revision of the regime applicable to agricultural producers, the exemption from registration obligations for holders of income from isolated acts and income from category B of the IRS.
The conditions to access this regime will become more restricted, with the annual turnover limit in the national territory set at €15,000 and the exclusion of occasional transactions and transfers of new means of transportation.
In addition, the exemption regime will now apply to taxpayers headquartered or domiciled in other Member States who, provided certain requirements are met, do not exceed an annual turnover in the EU of €100,000. For taxpayers residing in Portugal, there will be the possibility of benefiting from the small business exemption regime in other Member States, provided that certain conditions to be defined by the Government are met.
The taxpayers covered by the special exemption scheme will not be able to exercise the right to deduct the VAT paid or to its refund.
The government shall, when transposing, provide for transitional measures for taxpayers not established in national territory who no longer qualify for the special exemption regime.
The new regime will also bring changes to the reporting, invoicing, and registration obligations applicable to the taxable persons covered, as well as the adaptation of the lump-sum regime for agricultural producers and the conditions for the exemption from the registration obligations currently provided for holders of income from isolated acts and income from category B of the IRS.
Upon the entry into force of Law 16/2025, the Government will have 180 days to transpose the Directives as outlined in this authorization. Small businesses should remain alert and prepare to review their internal procedures, ensuring compliance with the new legal requirements to be established.
This newsletter was prepared with the assistance of KeyTerms AI assistant, using OpenAI technology, and reviewed and amended by lawyers. This information is of a general nature and should not be considered as professional advice.
The Portuguese Government has extended by one year the deadline for publishing the timeline and guidelines for public tenders for low-voltage ("LV") power distribution grid concessions.
The low-voltage grid (“LV Grid”) is operated by private entities awarded with a concession provided by the municipalities. It can also be operated directly by each municipality, but none of them is currently doing so. We note that the LV Grid operation must be carried out in exclusivity.
Originally, public tenders for LV Grid concessions were set to be launched by June 2025. However, on September 2, 2024, this schedule was revoked, and a Low Voltage Coordination Committee ("CCBT") was established.
The CCBT was supposed to propose a new schedule and publish the guidelines for these tenders by December 15, 2024, but this did not happen. With Resolution of the Council of Ministers N.º 30/2025, of 20 February, December 15, 2025, was set as new deadline for submitting the schedule proposal.
The prior qualifications requirements for the tenders were already strict with applicants needing at least 5 years of experience in operating distribution grids. In this sense, this change goes against the efforts of interested players who had been preparing to participate in the tenders in 2025.
The exiting LV Grid concessions were to expire between 2021 and 2022. Until now extensions have been granted to the concessionaires and until new tenders are completed the preexisting concessions will remain effective. At this time it is unclear if the new tenders will happen in 2025 or if stakeholders will need to wait a bit longer for their opportunity in the market.
Read our previous publications on this subject:
The Portuguese LV grid tenders
The Portuguese distribution grid: update
The Portuguese Low Voltage grid tenders postponed once again
Finally, all clear for the Portuguese LV grid tenders?
Are new tenders for low-voltage electricity distribution concessions at sight?
Order n. 1859/2025 (Order) published on February 10 by the Portuguese energy ministerial authority (DGEG), established the procedures for licensing of electricity storage facilities with previously allocated injection capacity in the Public Service Electricity Grid (RESP), for:
- Change of technology in a solar power generation center with an injection capacity reservation title (TRC) that has not yet been built; and
- Standalone/Autonomous storage or co-located storage with previously allocated injection capacity reservation in RESP for a renewable energy power plant.
- Technology Change
A TRC issued under the general access modality for a solar generation center can be changed to an autonomous storage installation, provided that, at the time of the request, the power station construction has not yet started.
The request for modification must be submitted by the TRC holder to DGEG along with the following documents: (i) Identification of the existing TRC; (ii) Summary of the intended operating conditions; (iii) Maximum injection capacity into RESP; and (iv) Maximum apparent power for charging from RESP.
DGEG will review the request and forward it to the relevant grid operator, who has 30 days to provide an opinion on the maximum charging power and any operational restrictions for the storage facility. After the grid operator's response, the request is sent to the system’s global manager (REN), which has 15 days to issue an opinion on the same matters.
If favorable, the grid operator must issue the modified TRC within a maximum of 10 days after DGEG's authorization.
- Use of Allocated Capacity
The injection capacity in a TRC granted to renewable energy power plants can now be simultaneously used to request a production license for autonomous or co-located storage installations, provided they are connected as follows:
- For the National Transmission Grid: at the same grid connection point;
- For the National Distribution Grid: on the same circuit.
The production license request must be submitted by the TRC holder to DGEG (with the explicit authorization of the storage installation holder) along with the required documents listed in Annex I of Decree-Law 15/2022, as well as:
- A summary of the intended operating conditions for the storage installation, including maximum injection and charging power through RESP; and
- A written agreement between the storage installation holder and the power plant holder to coordinate operations and inject the produced energy into RESP.
DGEG will review the request for compliance and forward it to the grid operator and the system's global manager for their opinions on the maximum charging power and potential operational restrictions for the storage facility.
If the opinions are favorable, DGEG will issue the production license within a maximum of 30 days.
The storage installation holder must ensure that the coordinated power plant is not simultaneously coordinated with other autonomous storage facilities. However, the storage installation may benefit from the injection capacity of multiple power plants.
This order came into effect on February 11, 2025.
DGEG, the Portuguese energy ministerial authority, has finally started publishing data on electricity injection capacities in the National Transmission Network (“NTN”) and the National Distribution Network (“NDT”). As of February 5, this information will be updated quarterly. The first dataset, reflecting figures as of December 31, 2024 is available here.
Although there is capacity that remains unallocated, new license applications for renewables’ production to be sold through the grid are currently suspended under Order 27/2020, as amended by Orders 33/2020, 40/2020 and 58/2020.
At present, registration applications are only being accepted for small production units (known as “UPP”) that are either experimental or conceptual demonstration projects. These units must be installed in maritime areas, inland waters, or used for green hydrogen production, as specified in Order 58/2020.
The quarterly publication of these data complies with Decree-Law 15/2022, (“SEN Law”) which regulates the organization and operation of the National Electricity System, transposing Directive (EU) 2019/944 and Directive (EU) 2018/2018, an thus aligning Portugal’s energy policies with European standards.
In fact, DGEG was already required to publish available electricity injection capacities in the national grid – covering the NTN and NDT – on its website: this obligation should have been implemented six months after the SEN Law’s enactment on January 15, 2022, with data referencing December 31st of the previous year.
On February 7th, Resolution of the Council of Ministers No. 19/2025 approved the Offshore Renewable Energy Zoning Plan (“PAER”).
This plan identifies the areas suitable for the installation of offshore wind farms in the national maritime space and includes an assessment of the potential impact of these infrastructures on the marine environment, aiming to ensure they can coexist in a balanced way, protecting biodiversity, commercial fishing, and maritime transport.
The PAER allows for an installed capacity of approximately 9,4 GW for commercial projects. marks the first step toward the offshore wind energy auction, which, according to the National Energy and Climate Plan, aims to install 2 GW by 2030; and includes some differences from the proposal submitted for public consultation, which can be reviewed in detail here.
These differences reflect the concerns of the fishing sector, which raised the main objections to the initially proposed area, particularly regarding the protection of navigation corridors and access to ports.
As a result, the maritime area covered by the PAER has been reduced to 2,711.6 km², which represents a decrease of 470 km² compared to the proposal submitted for public discussion, as follows:
- The northern area of Viana do Castelo has been reduced to 229 km2 for a capacity of 0,8 GW (previously with a capacity of 1,9 GW);
- The southern areas of Viana do Castelo and the Ericeira zone have been cancelled; and
- The Leixões area has been set in 722 km2 with a capacity of 2,5 GW (previously with a capacity of 2 GW).
The total area now approved includes a new 5.6 km² zone in Aguçadoura (Póvoa do Varzim), intended for the installation of research and/or non-commercial demonstration projects.
The access to the areas defined in the PAER for commercial projects will be carried out through a government-initiated procedure, as outlined in Article 64 of Decree-Law No. 38/2015: this will be procedure to establish the areas assigned to the tenders for the installation of wind energy projects.
This Resolution came into effect on February 8.
The Tax Simplification Agenda (Agenda) approved by the Portuguese Government introduces 30 measures that will simplify taxpayers’ reporting and payment obligations.
In this newsletter we review the main measures.
PERSONAL INCOME TAX
Regarding Personal Income Tax (PIT), we highlight the following changes:
- Deadlines for ancillary and reporting obligations (e.g. disclosure of the taxpayer's household members and invoices) are now aligned to the end of February; and
- Form 13 (covers income from securities, autonomous warrants, derivative financial instruments), Form 39 (focuses on income and withholding tax reporting) and annex G to Form 3 (addresses capital gains and other asset increases) will be simplified.
CORPORATE INCOME TAX
Concerning Corporate Income Tax (CIT), the Agenda includes the following measures:
- Annex Q will no longer be included in the Annual Simplified Company Information (IES), meaning, the annual Stamp Duty statement will be discontinued, with the monthly statement now deemed sufficient;
- Tax losses from previous years will automatically be filled in the annual tax returns (Form 22);
- The responsibility for identification of shareholders will no longer fall on taxpayers. Instead, this process will be conducted automatically and at no cost by the Portuguese Institute of Registries and Notaries;
- The invoicing rules will be simplified, particularly regarding the requirements for issuing electronic invoices.
VALUE ADDED TAX
Pertaining to Value Added Tax (VAT), the following changes stand out:
- For VAT refunds exceeding €30,000, taxpayers will have the option to request an immediate reimbursement; for this purpose, they must provide a bond, which will be released following the inspection or the validation of the submitted statement by the Tax Authorities;
- The Tax Authorities will automatically process the VAT returns for individuals with no taxable transactions, therefore preventing tax assessments and administrative fines for the non-submission of such returns;
- The requirements for waiving the VAT exemption on real estate transactions will be simplified, and the prior issuance of a certificate for this purpose will no longer be necessary;
- The request to pay VAT in instalments may be submitted prior to the deadline for filing the VAT returns;
- VAT taxpayers who do not maintain organized accounting will no longer be required to keep physical record books. Instead, it will be sufficient to classify invoices directly in the Tax Authorities’ website;
- The obligation for exporters to submit an electronic customs export statement in order to obtain the document certifying the departure of goods with VAT exemption and an amount under €1,000, will be eliminated.
VEHICLES CIRCULATION TAX
Finally, in reference to the Vehicles Circulation Tax (IUC), the Agenda contemplates the following measures:
- The IUC payment will become due annually for all vehicles, on a single date;
- For IUC amounts exceeding €100, payment can be made in two instalments.
These changes will now require implementation through legislative acts and administrative measures issued by the Tax Authorities.
The document approved by the Government is available here.
The Portuguese Government approved the Offshore Renewable Energy Zoning Plan (PAER) on January 9th, with the aim of identifying suitable areas for the development of offshore wind farms within the national maritime space. The plan also includes an assessment of the potential environmental impacts of these infrastructures, to ensure they reconcile activities, particularly commercial fishing and environmental conservation.
This plan is part of the National Energy and Climate Plan 2030 (PNEC 2030), which sets targets to decarbonize the economy and promote renewable energy, targeting a 47% share of renewable energy in gross final energy consumption by 2030. Initially, the Government set a target of 10 GW of offshore wind capacity by 2030. However, after reviewing the PNEC 2030, this target was adjusted to 2 GW only, by the end of the decade.
The PAER version submitted for public consultation in 2023 identified six potential areas for the installation and development of offshore wind farms: Viana do Castelo North and South, Leixões, Figueira da Foz, Ericeira, and Sines.
The offshore wind auction, initially scheduled for 2023, was postponed due to the technical complexity and the absence of necessary approvals for seabed use for offshore wind farms. Following the recent approval of the PAER, the first auction is anticipated to be launched in 2025, for 2 GW of capacity by 2030. The EU plans to expand offshore wind energy from 3% to 25% of its electricity consumption by 2050. Portugal is starting to align with this goal, with just 25 MW of capacity currently installed off the coast of Viana do Castelo.
The approval of the PAER enables the development of offshore wind energy in Portugal, as it will update and be automatically incorporated in the National Maritime Spatial Planning Plan (PSOEM), which designates the areas for the different maritime activities. According to the latest comments from the Portuguese Minister of Environment and Energy, the offshore wind energy auction will take place in two phases:
- First phase: Seabed rights will be granted for a defined duration enabling developers to conduct studies and assess the area, subject to the provision of a guarantee payment.
- Second phase: An auction will be held for Contracts for Difference (“CfD”), where a reference price will be set for the purchase of the energy produced. Under this model, when the market price falls below the reference price, the government compensates the energy producer for the difference. Conversely, when the market price exceeds the reference price, the producer must reimburse the difference.
The choice of a two-phase auction is justified by the limited maturity of floating offshore wind technology, which is not yet fully developed. The additional time allocated to study the areas will help accurately predict the project’s financial return, which is crucial for securing financing. A one-phase auction, on the other hand, would speed up the process but involve higher risks, such as inflating prices or having no participants in the auction if the CFD does not offset the risks.
According to estimates from APREN, the Portuguese Renewable Energy Association, the installation of 2 GW of wind capacity by 2030 represents an estimated investment of approximately 9 billion euros. It is also expected to contribute up to 1.7 billion euros to GDP and create between 5,000 and 13,561 new jobs.
For information on the licensing process for maritime space, you can consult our Offshore Wind Power Production Licensing in Portugal.
On December 23, 2024, ANACOM, the Portuguese telecoms National Regulatory Authority (NRA), approved a Regulation on Number Portability. This regulation outlines the principles, rules, and processes that telecom operators must follow to ensure number portability in electronic communications networks.
This new regulation aligns with the updated Electronic Communications Law and the EU Directive 2018/1972. The directive mandates that prices for number portability services must be cost-based and prohibits direct charges to end users. It aims to strengthen consumer rights, making it easier to switch service providers and ensuring equal protection for consumers across the EU.
As Portugal was required to implement this directive, the regulation establishes a ban on charging direct portability fees to end-users with contracts linked to numbers. Other relevant features of this regulation are:
- The setting of compensation of €10 to customers for failure to comply with the scheduling of physical intervention network, which requires the rescheduling of the intervention for another day.
- The obligation of the Receiving Provider to ensure that portability and the subsequent activation of numbers take place on the date expressly agreed with the customer as soon as possible and no later than one working day after that date.
- In the event of termination of the contract, and unless they waive this right at the time of deactivation of the service, the end user retains the right to port PNN numbers to another company.
- The quarantine period for numbers is 90 days, during which users can still transfer their numbers to another company, unless they gave up this right when canceling the service. Additionally, companies cannot give these numbers to others for 180 days.
- The limitation on the wholesale cost that operators can pass on to competitors for the service. It now has a maximum value of €1.
- When a prepaid service number is ported, the original provider must refund the remaining credit to the user. However, the user may have to pay a fee for this refund if it's stated in the contract and is reasonable based on the company’s costs.
The new regulation will become effective on 23 November 2025.