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BACKGROUND

AI is a fascinating subject because it questions the foundations of human knowledge, intelligence and creativity. I will not contend nor discuss whether AI can or cannot produce true art and intellectual work and will not contend or discuss whether AI is or will ever be a humanlike intelligence. I have my own philosophical opinion but I will not bring those matters into this discussion.

We leave these questions aside to affirm that AI as a mere tool is fascinating enough on its own. AI can unlock human potential in a manner no other tool can. The AI revolution is similar to that of writing that marks the beginning of history, or Greek philosophy that marks the beginning of a new way or reasoning, where logic itself became a subject matter, or the print that allowed knowledge to spread at a speed not seen before. AI is accelerating knowledge creation to new levels because it can help spark the imagination and creativity of scientists, artists, researchers, lawyers and, more generally, any person in a knowledge profession.

In 2022, before ChatGPT was shown to the world, Macedo Vitorino elected AI as one of the key sectors where it should build more expertise. We are presently carrying out research on the main legal aspects of AI. Our view is that AI, besides raising new ethical and political issues that legislators are now starting to regulate, with the EU AI Act being a first attempt to address these matters, will also raise several new legal issues concerning our everyday life that must be addressed based on existing laws and regulations.

We have set up a team of lawyers to work on the matter of AI and the Law. We started our journey by researching and discussing the matter of attribution of authorship and copyright for AI generated work. The attribution of copyright follows a set of laws, international conventions and legal precedents in Europe, the US and the UK that goes back more than two centuries.

Because we have now embedded AI tools into our everyday work, we decided to use AI in this assignment. We generally use AI in many parts of our work: Copilot (the ChatGPT Microsoft variation that helps research side by side with Edge web browser), Key Terms (using Open AI engines embedded as aMicrosoft Word Addin that facilitates moving back and forth in Word document and inserting results directly in your work environment), Perplexity for pure legal research work and x.AI for conversation and logic, using AI as a sounding board for testing new ideas and propositions and for sparking imagination.

Microsoft Copilot, available in its web browser Edge, and Key Terms, a proprietary tool available as a Word Addin, are powered OpenAI, so basically have the same capabilities of ChatGPT, which is now the most used generative AI tool in the World. Copilot and Key Terms have the advantage for lawyers of operating in our everyday work environment which is either searching the web or writing legal documents. Key Terms' translation tool has replaced DeepL as our preferred translation software and has all the advantages of confidentiality that lawyers need. For deeper research tools Perplexity is now my preferred tool, while x.AI's logic now seems better than most. We see models evolving every day, so the better models will arrive and the rankings of capabilities change at an amazing speed.

DIALOGUE WITH AI

For this particular assignment we chose x.AI's chatbot "Grok.3" given its conversational and reasoning capabilities. To avoid anthropomorphising AI, we choose to refer to the AI system as "AI system" or "x.AI", the name of the developer. The dialogue covered several matters concerning the attribution of authorship and copyright. The dialogue was fluid and interesting which justified publishing it separately – please see Appendix "A Dialogue with AI".

This article contains the author's prompts and the AI's responses. The responses were summarized using x.AI with slight tweaks of the author, always repurposing existing AI generated text, not adding or changing the output. The author's prompts were later slightly refined by the author and have no AI content. The author added comments, highlighted as "author's comments", at the end of each section to explain key concepts and differences, as AI could not fully grasp the meaning of some of the author's assertions. The author's comments were not part of the dialogue. The author's position did not change during the dialogue, b

EVALUATION OF THE RESPONSES

Our evaluation of x.AI's capabilities is the following:

(a) AI responses are readable, contain valid arguments and show good reasoning. The x.AI's analytical capabilities are better than most LLMs that we tested. We did not reproduce all of the conversation which extended over 40 pages long, but the final text was easy to read and provided useful information (see Appendix).

(b) As a downside, the AI could not create or explore any new ideas nor could it move well into unknown territories. When questioned about subjects already covered, the AI acknowledged the new nuances being introduced but went back to positions that it had established before, building on previous interactions and integrating knowledge acquired in the discussion in its own responses but sometimes incorrectly and without fully capturing its meaning and implications.

(c) The AI responses were based only on the Feist and Zarya of the Dawn cases in the US, the Infopaq case in the EU, and section 9(3) of the UK Copyright, Designs and Patents Act 1988, no other sources of information were quoted. In the real world, legal research requires much deeper investigation and many sources must be reviewed. For instance, when addressing copyright law in the EU, we need to consider the law of each of the 27 countries, or, when that is unpractical, at least one of these countries. There is no unified European legal system.

(d) The overall result is interesting. The AI responses were fluid and helped sparking the author's imagination around the subject, like a good student would do. Many times, eager to follow and not to question in the true sense of the word, but very helpful for the author to train his own arguments as if in an almost real-life situation but never going into something sufficiently original (in scientific terms) to help the author question his position. By comparison, for the research of authoritative sources Perplexity offers a wider range of results than x.AI. Human research and analysis cannot be dispensed when using either tool.

(e) At the end, the discussion became somehow rounded and unproductive. When the author tried to go deeper into certain points, i.e. the concept of "creativity", the AI tended to hallucinate and making incorrect. The AI based some of its "opinions" on incorrect data or a wrong interpretation of the data. As an example, the AI overstated prompt sufficiency and incorrectly stated that section 9(3) of the overstates UK Copyright, Designs and Patents Act 1988 attributed copyright of the AI generated work to the human prompter. Section 9(3) requires the author to make the "arrangements necessary for the creation of the work", which is more than writing a prompt, even a detailed one. For lawyers (and probably other research fields as well) minor misinterpretations of the sources are particularly dangerous because wrong answers that are very close to being true can lead to an overall incorrect interpretation of the law.ut the AI responses helped the author to explore concepts, question his convictions and shape this article.

QUESTIONS ABOUT COPYRIGHT ATTRIBUTION FOR AI-GENERATED WORKS

The discussion also allowed us to put forward some ideas that deserve further investigation and discussion, now involving humans only.

The following are the three main conclusions that resulted from dialogue, which will help our team in its investigation on AI and copyright law:

(a) The author's dialogue with AI deserves copyright protection. Our view is that current AI systems (LLMs) can generate work, in this case text was generated by x.AI, that if it had been produced by a human would qualify as an intellectual work and deserve copyright protection. It also seems that, as stated in the dialogue, copyright of the entire dialogue (not the compilation of prompts and responses) should be attributed to the human author. In my view, the AI text might also be copyrightable on its own, because it is original in form. One can argue that any AI generated could be copyrightable in the very extended scope of works that are copyrightable unless the AI output plagiarises existing work. Attribution of such work to the prompt author seems obvious but the prompt may lack creativity and the author's work may not be sufficiently creative on its own to deserve protection. A single prompt (even a complex and detailed prompt) may not be sufficient to attribute authorship and copyright to the human prompter of an unedited work.

(b) Human authorship always displays intent. Intent can be key in asserting if an AI generated work is copyrightable. Generic and not so generic prompts have little intent and, therefore, little direction. With little or no direction, the AI output would be more basic, sufficient to be considered an intellectual work if produced by a human, but not sufficient to be considered an intellectual work if produced by a machine.

The concept of minimal creation and the protection of form only as the basic criteria for a work to be copyrightable must be questioned. There are two possible solutions. The first option is to keep the existing definition of intellectual work and attribute the copyright to the author of the prompt or raise the bar on the definition of work deserving copyright protection, which is to say to extract the economic benefits of that work via copyright, because otherwise there will be multiple intellectual works with no inherent value that will add entropy to the system in the form lawsuits for plagiarism of existing human authors regarding the AI generated content or by the copyright owners of IA generated work against authors that produce work that resemble the AI generated content.

The second option is to have a higher standard of the minimum creativity required for an AI output to be considered copyrightable, thus limiting the protection of new works that do not show a significant human involvement, which can hinder the use of AI. The issue of watermarking machine and, by exclusion, of human content can be a manner of assessing if the work is or is not copyrightable, but a quantitative threshold of human intervention does not seem to us to be sufficient to definitively attribute the ownership of an AI generated work.

(c) The concept of plagiarism should be redefined because AI easily plagiarises existing works. AI generated work tends to plagiarise multiple authors or genres. The ideas stated in the AI responses are not novel but copyright does not cover ideas but the expression of ideas. Human plagiarism is easier to spot because generally it is related with a single author, the plagiarised author. AI's plagiarism is diffused. A generic prompt normally yields a somehow plagiarised output that we could call a "generic plagiarism" (meaning multiple works being plagiarised in a single AI output), but there is no legal definition of "generic plagiarism" and the fact that several works and works can be plagiarised in a single new AI generated work is difficult to prove. Presently many AI's generated works seem unoriginal but cannot be considered as plagiarism. Such potential "generic plagiarism" should be considered as we investigate the implications of AI in copyright law.

Appendix: Dialogue with Grok.3 

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The Portuguese Government has granted a 12-month one last extension for the completion of several renewable energy projects, namely those awarded in the 2019 and 2020 solar PV public auctions.

The measure set out in Ministerial Order No. 170/MAEN/2025 is signed by the Portuguese Minister for the Climate and Energy and addresses delays caused by significant external constraints, including the COVID-19 pandemic, the war in Ukraine, and ongoing disruptions in global supply chains — which has already prompted multiple extensions over the past three years.

Thus, each of the following deadlines is extended by a period of 12 months:

• The deadlines for obtaining the approval of the prior communication to start construction and for securing the operation license under the solar auction launched by the Portuguese Government in 2019;
• The deadlines for obtaining the approval of the prior communication to start construction and for securing the production and operation license under the solar auction launched by the Portuguese Government in 2020;
• The deadlines for obtaining the approval of the execution project for the power plant by the Portuguese Environmental Agency (APA) and for securing the production and operation license under the floating solar auction launched by the Portuguese Government in 2021;
• The deadlines for securing the production and operation licenses under Decree-Law No. 15/2022, of January 14; and
• The deadline for obtaining the operation certificate for power plants with an installed capacity equal to or less than 1 MW.

According to the Portuguese Energy Minister, the now approved extension of the deadlines is final and is justified by the national strategic interest in accelerating the energy transition.

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After the European Commission having finally approved the aid plan designed by the Portuguese Government to support industries with high electricity consumption, the implementation of the Electro-Intensive Consumer Statute (“ECS”) established by Decree-Law 15/2022, is now completed with the enactment of two new regulations:

• Ministerial Order 112/2022, of March 14th, sets now the eligibility requirements for electro-intensive consumers, as well as the obligations and support measures applicable to their respective facilities; and
• Order 5975-B/2022, of May 13th, establishing that applications for adhesion to the ECS must be submitted through the DGEG portal by June 15th of each year, together with information identifying the applicant's consumption facilities. If DGEG issues a favorable decision, the draft contract for adhesion to the ECS will be made available to the applicant for signature.

ECS grants (i) a partial reduction in charges related to costs of general economic interest (CGEI) applied to electricity consumption from the public grid with discounts on this portion of the bill that can reach 85%, (ii) full exemption from the CGEI on the energy consumed from self-consumption units delivered through the public grid, (iii) access to a risk hedging mechanism (minimum 10%) of the electricity consumption from renewable sources acquired through long-term contracts, and (iv) the exemption from the proximity criteria between the self-consumption units and the consumption facilities.

The support is intended for industrial sectors such as the production of ceramics and glass, metalworking, and textiles. Companies whose annual electricity consumption exceeds 20 gigawatt hour (GWh), that have at least 40% of consumption during off-peak periods (slack and super-slack periods), and whose electro-intensity is equal to or greater than 1 kWh per euro of gross value added, based on the arithmetic average of the last three years.

To benefit from this support, companies must commit to investing at least 50% of the aid received in projects that reduce the carbon intensity of their facilities. In addition, they must ensure that at least 30% of their electricity consumption comes from renewable sources, whether through long-term contracts, self-consumption investments, or other energy sustainability initiatives.

ECS will result in annual support for companies of at least 60 million euros, according to a statement released by the Ministries of Environment and Energy and the Economy. The Portuguese Government estimates that there are 319 companies that meet the necessary conditions to receive the support.

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The new gender equality plans must be submitted by September 15 of this year. Therefore, it is advisable to begin their preparation.

The Portuguese Commission for Equality in Labor and Employment (“CITE”) recently published the “Recommendations for Equality Plans – 2025” on its website.

It is now up to companies to consult, analyse, and begin preparing the new gender equality plans based on these recommendations.

In addition to the specific recommendations, companies should also consult the applicable legal framework, as well as the guide provided by CITE for this purpose, the most recent technological tool (the portal) designed assists in the plan´s preparation.

As CITE reminds on its website, gender equality plans are an important management tool that allows for the "implementation and operationalization, in a transversal manner, of gender equality in a business context."

Its preparation is mandatory for publicly listed companies, as well as for entities within the state and local business sectors. While voluntary for others, it represents an important tool for corporate social responsibility.

The primary objective of the annual preparation of gender equality plans is to achieve effective equality of treatment and opportunity between women and men, by promoting equality in access to employment, equality in working conditions, pay equity, protection in parenthood, and the reconciliation of professional activity with family and personal life.

Ultimately, what is at stake is the promotion of gender equal opportunities.

However, the obligations of companies do not end with the submission of the plan. As outlined in the fourth phase of CITE’s guideline, ongoing monitoring of the plan´s implementation is required.

The plan must be prepared in compliance with the law and in accordance with specific recommendations and compliance rules that should be carefully followed.

It should be noted that violations of gender equality regulations may result in serious and very serious administrative offences for companies.

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The Portuguese Government has taken significant steps in the development of offshore wind energy with its Dispatch No. 4752/2025, published on April 21st, establishing that the first Portuguese offshore wind tender will adopt a centralise sequential model; and setting an outline and the calendar for the commencement of competitive procedure.

The centralised sequential model consists of two main stages: the first competitive procedure for the allocation of exclusive use of maritime space, followed by a second procedure for reserving injection capacity into the electrical grid, with possible remuneration models to be defined.

DGRM (the ministerial department for natural resources), DGEG (the ministerial department for energy) and EMER (the mission structure for renewables created by the Portugues Government) must present in 60 days a detailed proposal for the implementation of this first competitive procedure including:

• Confirmation and scheduling of the stages of the first centralized sequential competitive procedure, describing the tasks to be carried out and the expected outcomes at each stage;
• Identification of the maritime zones to be included in the first tender;
• Analysis of the existing legal framework, with proposals for revisions, if necessary;
• Definition of pre-qualification criteria for companies; and
• Identification of additional work needed, including socio-economic studies, the definition of fees and tariffs, legal, consulting, and other relevant tasks.

Within 180 days from this dispatch, the three entities must submit a draft competitive procedure documentation for government approval.

This dispatch an implementation of Council of Ministers Resolution No. 19/2025, which recently approved the Portuguese Offshore Renewable Energy Allocation Plan (PAER).

Can we now expect an offshore wind tender by the end of 2025?

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In an era of globalization, the posting of employees has become increasingly important. The main objective of the legal regime applicable to the posting of employees is to allow the free circulation of employees while ensuring the protection of their labour rights, as well as the protection of competition between companies operating in the same market.

1. Posting to Portugal

a) Scope

The Portuguese Labour Code defines the posting of employees, providing for the possibility of an employee hired by a company established in another State to carry out his/her activity in the Portuguese territory, as well as the reverse situation of a Portuguese employee, hired by a company established in Portugal, being posted to carry out his/her activity in another State.

With regards to the posting in Portuguese territory, this is only admissible in one of the following situations:

i. In the execution of a contract between the employer and the beneficiary who carries out the activity, provided that the employee remains under the authority and direction of the latter;
ii. In the establishment of the same employer, or in the company of another employer with which there is a corporate relationship of reciprocal shareholdings, control or group (e.g. in the case of occasional assignment);
iii. In the service of a user, at whose disposal the employee was placed by a temporary employment agency or another company; or
iv. In the situations referred to in points (i) and (ii) above by a user established in another State under its national legislation, provided that the employment contract subsists during the posting.
The posting in Portuguese territory is not applicable to navy personnel in the mainland.

b) Applicable legal regime

In case of posting, the Labour Code sets forth rules of necessary application, that is, without prejudice to more favourable regimes established by law or employment contract, the posted employee has the right to the working conditions provided for by Portuguese law and in generally applicable collective labour regulations that respect:

i. Job security;
ii. Maximum working hours (not covering the posting in construction activities aimed at the construction, repair, maintenance, alteration or elimination of buildings, namely excavations, landfills, construction, assembly and disassembly of prefabricated elements, arrangement or installation of equipment, transformation, renovation, repair, conservation or maintenance, namely painting and cleaning, dismantling, demolition and sanitation);
iii. Minimum rest periods;
iv. Holidays;
v. Minimum wage (the minimum wage includes the subsidies or allowances granted to the employee due to the posting that do not constitute reimbursement of expenses incurred, in particular for travel, accommodation and food);
vi. Payment of overtime;
vii. Assignment of employees by temporary employment agencies;
viii. Occasional assignment of employees;
ix. Safety and health at work;
x. Protective measures for parents and minors; and
xi. Equal treatment and non-discrimination.

The Law expressly foresees that the referred rule regarding holidays, minimum wage and payment for overtime is not applicable to the posting of a qualified employee by a company supplying a good, to carry out the initial assembly or installation essential to its operation, provided that this is included in the supply contract and its duration does not exceed eight days in a period of one year.

c) Communication duties to the Labour Authority

The employer must, until the beginning of the posting, report the same to the competent labour authority (Autoridade para as Condições do Trabalho – ACT) by filling a form with the following information:

i. The identity of the service provider;
ii. The number and identification of the workers to be posted;
iii. The identification of the liaison person (the employer is required to appoint a liaison person with ACT and, if applicable, to liaise with the social partners);
iv. The estimated duration and estimated dates for the start and end of the posting;
v. The address(es) of the work-place; and
vi. The nature of the services justifying the posting.

During the entire period of the posting, the employer must keep hard copies or in electronic format of the employment contract, payslips and proof of payment, and records of working time in an accessible place and clearly identified in the Portuguese territory.

The aforementioned documents must be submitted to the ACT, upon request, within one year after the end of the posting, in Portuguese or accompanied by a certified translation.

2. Posting outside Portugal

a) Scope

The posting to another State occurs when a Portuguese employee, hired by a company established in Portugal, carries out his/her activity in another State in any of the situations mentioned in points (i) to (iv) above.

b) Applicable legal regime

The employee posted to another State, outside Portugal, is entitled to the working conditions provided for in item b. of the previous paragraph (“Applicable legal regime” in the case of posting to Portuguese territory), without prejudice to more favourable arrangements set out in the applicable law or the employment contract.

Moreover, in addition to the usual information obligations to be provided by the employer to the employee, there are additional communication obligations, that is, if the employee whose employment contract is regulated by Portuguese law carries out his/her activity in the territory of another State for a period exceeding one month, the employer must provide him/her, in writing and before his/her departure, with the following additional information:

i. Identification of the State or States where the work is to be performed and the expected duration of the period of work to be performed;
ii. Currency and place of payment of cash benefits and, if applicable, benefits in kind;
iii. Possibility of repatriation and respective conditions;
iv. Access to health care;
v. Remuneration to which he/she is entitled under the law applicable in the host State, in situations of posting;
vi. Allowances inherent to the posting and reimbursement of travel, accommodation and food expenses, where applicable; and
vii. Official website of the host State, created under the specific legislation applicable to posting.

Considering the various rules applicable to posting and the different legal regimes in the different countries, employers and employees must, before initiating any posting, inform themselves of their respective legal duties and rights, including before the labour authorities (in Portugal, “Autoridade para as

Condições do Trabalho”– ACT) and Social Security in the destination country and the country of origin. Tax aspects should also not be overlooked. Note, inclusively, that there are special rules, for example, for the posting of drivers.

c) Communication duties to the Labour Authority

In the case of posting to another State, outside Portugal, the employer must notify the labour authority ACT five days in advance of the identity of the employees to be posted abroad, the user, the place of work, the expected start and end of the posting.
It is also recommended in this case to maintain the documents referred to in item c. above (“Communication duties to the Labour Authority” in the case of posting to Portuguese territory) within the referred terms to be presented to the authority whenever requested.

3. Social Security

In terms of Social Security, the general rule is that an employee is subject to the Social Security legislation of the country in which he/she works. Hence, the posting constitutes the main exception to this rule, allowing the employee to continue to be subject to the Social Security legislation of the country of origin as long as the requirements imposed for this purpose by the Social Security of the countries in question are met.

The referred requirements vary depending on whether the posting is to or from Portugal or other countries of the European Union, the European Economic Area, Switzerland, the United Kingdom, countries with bilateral/multilateral agreements/conventions at the level of Social Security or third countries without any agreements/conventions. The location of the establishment, staff, turnover and invoicing of the companies in question may also constitute an essential requirement, among others to be assessed by Social Security on a case-by-case basis.

The posting must be temporary and of limited duration, with the maximum duration depending on the Social Security regime of the countries involved. For example, the posting of an employee from Portugal to another Member State of the European Union can be for a maximum of 24 months (only in exceptional and duly authorised situations may it be extended up to a maximum period of 5 years).

Notwithstanding the above, the duration of the posting may also be subject to more restricted periods provided for in the Labour Code, as is the case of posting through occasional assignment (the duration of the assignment may not exceed one year, being renewable for equal periods up to a maximum of five years and being subject to various requirements and formalities).

The Employer must, in advance, request to Social Security to issue the legally mandatory documentation for the posting, inter alia, in the aforementioned case of posting from Portugal to a Member State for a period of up to 24 months, the issuance of the Portable Document A1 must be requested, certifying that the employee is subject to a mandatory Social Security system (in this case, he/she is covered by Portuguese Social Security legislation).

Finally, it should be noted with regard to the posting regime that Social Security has already clarified that teleworking situations are not considered posting, as the legislation of the Member State where the employee is physically carrying out the activity applies

4. Conclusion

Given the multitude of potentially applicable rules, it is essential to assess in advance which legal rules apply to each specific case, before any posting is initiated.
Breach of legal rules on posting may constitute a serious offence and result in the employer incurring significant fines.

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The new rules for the identification, protection, and resilience of critical entities aim to ensure that entities providing essential services for maintaining social functions and vital economic activities can prevent, protect, respond, manage, and recover from incidents such as terrorist threats or public health emergencies.

In this regard, Decree-Law No. 22/2025, of March 19, establishes (i) the terms and procedures for identifying critical entities pursuant to the national resilience strategy and the national risk assessment, (ii) the obligations of critical entities, and (iii) the sanctions for non-compliance with these obligations.

The identification of critical entities will be carried out by the National Council for Civil Emergency Planning according to the following criteria:

• The entity in question provides an essential service.
• The entity operates and its critical infrastructure (asset, facility, equipment, network, or system located in Portuguese territory, whose disruption or destruction would significantly impact the provision of an essential service) is situated in Portugal.
• An incident would have significant disruptive effects on the provision of one or more essential services, considering factors such as the number of users, the entity’s market share, and the geographical area that could be affected.

The essential services include (non-exhaustive list):

• Energy: Production, supply, transportation, distribution, and storage of electricity, gas, and oil.
• Air, rail, and maritime transport: Transport services and management of infrastructure and traffic.
• Road transport: Traffic management control within intelligent transport systems.
• Banking: Acceptance of deposits, lending, and payment services.
• Financial markets: Operation of trading platforms and clearing systems.
• Health: healthcare services, research and development of medicines, manufacturing of basic pharmaceutical products and preparations, production of medical devices considered critical during a public health emergency, and storage and distribution of medicines.
• Drinking water: Supply and distribution of potable water.
• Wastewater: Collection, treatment, and disposal of wastewater.
• Digital infrastructures: Cloud computing services, data centres, content distribution networks, trust services, public electronic communications services, and public electronic communication networks.
• Food production, processing, and distribution.
• Insurance and pension funds.

Entities identified as critical will be notified and given 15 days to answer, after which they may be considered designated as such. The identification of critical entities must be reviewed every four years.

Critical entities will be subject to several obligations, including:
1. Appointment of a liaison officer responsible for institutional coordination and a liaison officer for each critical infrastructure and notice of such appointment to the competent authorities within 10 days.
2. Conducting a risk assessment within 9 months. The risk assessment must be updated every four years or whenever necessary.
3. Development and implementation of a resilience plan based on the risk assessment and submission for approval by the Secretary-General of the Internal Security System within 10 months. This plan must include the technical, security, and organizational measures necessary to ensure the resilience of the entity and its critical infrastructures, including physical protection, security plan for each infrastructure, identification of categories of personnel with critical functions, and training and exercises for human resources. The resilience plan must be reviewed every four years or whenever necessary.
4. Notification of incidents that disrupt or may disrupt the provision of essential services or the operation of critical infrastructures within 24 hours.
5. Conducting at least one exercise under the approved resilience plan to test the adequacy of its measures, procedures, and actions.
6. Prior notification of changes in legal status and the sale or transfer of the essential service, including identification of the purchaser and assurance that the relevant information of the resilience plan is conveyed to the purchaser.
7. Prior notification of the sale or transfer of critical infrastructures, with at least 30 days' notice before the transaction takes effect, including identification of the purchaser.

Failure to comply with these obligations constitutes an administrative offense subject to fines and other penalties.

The obligations outlined in points 1 to 5 above and the penalty regime do not apply to critical entities in the banking, financial markets, insurance, pension funds, and digital infrastructure sectors.

The national resilience strategy for critical entities and the national risk assessment must be defined by January 17, 2026. The current regime (Decree-Law No. 20/2022, of January 28) will remain in force until then. The designation of critical entities in the essential sectors must be completed by July 17, 2026.

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Decree-Law 23/2025 introduces amendments to the VAT exemption scheme for small businesses, as well as measures to reduce costs and simplify the process.

Under the former VAT exemption regulations, taxpayers with registered offices in Portugal who did not maintain organised accounting were eligible for the exemption, as long as they met the following criteria:

• Did not engage in import, export, or related activities; and
• Their turnover in the previous calendar year, did not exceed €15,000.

The revised rules now extend this regime to micro-companies with organised accounting, as well as to taxpayers involved in imports and the sale of goods or services listed in Annex E of the VAT Code. The previous rules only applied to companies established in the Member State where the tax was due. However, under the new rules, businesses with headquarters or domicile in other European Union Member States now qualify for the VAT exemption if:

• The internal conditions required for the exemption are satisfied;
• The annual turnover within the European Union does not exceed €100,000;
• The company has notified the Member State of establishement, of its intention to apply for the exemption within its national territory;
• The company has obtained a unique identification number with the suffix 'EX' for exemption purposes.

In addition, companies based in Portugal that operate in other Member States are also eligible for the exemption in transactions involving the transfer of goods or the provision of services, subject to the same conditions.

Taxpayers with their headquarters or domicile in Portugal may request this exemption by applying for a change to their VAT status in June 2025.

Starting from the 1st July 2025, taxpayers with their headquarters or domicile in another Member State, who currently benefit from the previous exemption rules, will no longer be eligible for such exemptionsand must end their activity for VAT purposes. Nevertheless, this does not affect their ability to notify the relevant Member State of their intention to continue benefiting from the exemption, provided that the applicable conditions are met.

Under the new rules, it is important to highlight that the exemption will no longer apply if the threshold is exceeded by more than 25% within the current calendar year.

Finally, Decree-Law 23/2025 introduces several simplification measures, including the removal of the requirement for the submission of the recapitulative statement for companies benefitting from the exemption, as well as the option to issue simplified invoices.

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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.

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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