1. Introduction

Portugal is now one of the preferred destinations of many high-net-worth individuals. This is because Portugal offers unique living conditions, a welcoming environment, an investment golden visa programme and offers investment opportunities in a wide variety of sectors.

Portugal is a country located in the southwestern Europe, enjoying a prime location, good climate and an immense natural beauty from sandy beaches and cliffs along the Atlantic Coast to mountains in the country’s inland. Portugal is a member state of the European Union, an economic and political block grouping 27 European countries.

With a lower cost of living than most of Western Europe and a good quality of life, Portugal is well suited for families, modern investors, businesspeople and retirees.

Portugal enjoys a high level of security compared to most countries worldwide, including those in Western Europe. According to the Global Peace Index, Portugal ranks 7th globally and 5th in Europe. This index assesses "global peace" based on three main criteria: societal safety and security, the extent of domestic and international conflict, and the degree of militarisation.

This briefing describes the various legal and practical aspects of living in Portugal for foreign nationals considering moving to Portugal, such as residency visa, personal income taxes, buying or renting a home, employment conditions, health and education.

Other key information concerning the most relevant aspects about doing business or working in Portugal is available at www.macedovitorino.com/en/Why-Portugal. The «Why Portugal» webpage contains a description of the main aspects that concern businesses and individuals investing in Portugal, including:

• how to set up a business;
• forms of investment incentives and government grants available and how to apply;
• getting a Portuguese residence permit or a golden visa;
• hiring employees, employers' obligations and rules concerning the dismissal of employees;
• Portugal's main taxes, including among others personal and corporate income taxes, VAT and property taxes;
• intellectual property protection, software, patents, trademarks and technology;
• real estate, acquisition and lease of property and financing and tax related issues; and
• dispute resolution, the judicial system and of the main steps and costs of lawsuits.

2. Moving to Portugal

 2.1. WHEN IS A VISA NOT REQUIRED?

Citizens of non-European Union countries that are part of the Schengen Area—Iceland, Liechtenstein, Norway, and Switzerland—as well as nationals from certain third countries, including the United States, Singapore, and the Hong Kong and Macao Special Administrative Regions, do not require a visa for short stays in Portugal. British citizens may also visit Portugal for holidays or short visits of up to three months without a visa, provided they hold a valid passport covering the entire duration of their stay. Nationals from these countries are only required to present an identity card or passport issued by their country of origin upon entry.

EU citizens intending to reside in Portugal for more than three months must apply for a registration certificate at the local municipality within 30 days after completing their initial three months of stay. After holding a registration certificate and residing in Portugal for over five consecutive years, individuals are required to apply for a permanent residence certificate, which is issued by AIMA (Agência para a Integração, Migrações e Asilo, I.P.).

2.2. WHEN IS A VISA REQUIRED?

To enter Portugal, non-EU citizens must obtain a valid travel visa and a recognised travel document and must not be subject to any alerts from AIMA.

Citizens of third countries who wish to reside in Portugal must apply for a residence visa at the Portuguese consular services in their country of residence. This long-term visa allows the holder to stay in Portugal for up to four months, during which time they may apply for a temporary residence permit issued by AIMA.

There are several subtypes of residence visas, including:

• visas for subordinate professional activity;
• visas for independent professional activity or for entrepreneurial migrants;
• visas for teaching, highly qualified, or cultural activities;
• visas for research, study, exchange programs for higher education or secondary school students, internships, and volunteering; and
• visas for family reunification.

Foreign nationals who are unable to provide for their own sustenance are not allowed to enter the country, whether for a temporary stay or as a transit to another country where their admission is assured.

2.3. GOLDEN VISA

2.3.1 GOLDEN VISA REQUIREMENTS

The Residence Permit for Investment Activity (ARI), commonly called "golden visa", is designed for investors from non-EU countries seeking residence in Portugal. "Golden visa" grant holders the right to free movement within Portugal and other Schengen countries.

This program allows residence permits for individuals who make significant investments in Portugal and meet specific criteria. In addition to the general requirements for residence permits, obtaining a golden visa requires a mandatory investment in one of the following areas:

• creating at least ten job positions, with the investment evaluated every two years to assess its impact on job creation;
• transferring €500,000 to public or private scientific research institutions within the national scientific and technological system. This investment is also evaluated every two years to measure its impact on scientific and cultural activities;
• transferring €250,000 to support artistic productions or the preservation of national cultural heritage;
• transferring €500,000 for the acquisition of shares in non-real estate collective investment funds; or
• transferring €500,000 to create a new company or contribute to an existing one, plus creating at least five permanent jobs or maintaining at least ten jobs (with a minimum of five permanent positions for at least three years). This investment is evaluated every two years to assess its impact on foreign direct investment and job creation.

Real estate investments are no longer eligible for the golden visa program. However, this change does not affect the renewal of residence permits for investments made before the new law took effect on 7 October 2023. Applications submitted before that date, and still pending a decision, are also not impacted.

Under the revised golden visa programme, no investment activity may be directly or indirectly related to real estate.

Non-EU citizens may have their residence permit applications refused, or existing permits cancelled, if they are subject to EU sanctions.

The residence permit must be renewed every two years, provided the applicant continues to meet the investment requirements.

The investment may be made in the applicant’s own name or through a single-member limited company registered in Portugal, provided the applicant is the sole owner.

2.3.2. HOW TO OBTAIN A GOLDEN VISA?

In addition to one of the investments already listed, to obtain a «Golden Visa», the applicants must also:

• be physically present in Portugal, have or rent a residence in the country and have sufficient means to support themselves;
• be registered with the Portuguese Social Security Authority if the activity in question is subject to registration in Portugal;
• not have been convicted of criminal offences, punished with imprisonment for a year or more or with entry ban in Portugal;
• not have been flagged in the Schengen Information System and in the Portuguese authorities' information system to bar their entry into the country;
• hold a valid Schengen visa (if not exempt by any visa waiver); and
• apply for the legalization of the stay in Portugal within 90 days after the first entry.

The application for ARI («golden visa») must be submitted online (http://ari.sef.pt) for prior validation by AIMA Once the application has been validated, the applicant is then allowed to make the appointment to go to AIMA facility, since the submission of documents related to the investment and the collection of biometric data is mandatory to be done in person.

The administrative cost of a residence permit application is approximately €6,939.87 and €2,906.61 for each renewal. If all requirements are met at the outset and the services require no further due diligence, the authorization is normally granted within 120 days of submitting the form and its documents.

Following the changes to the income tax laws, the holder of a "golden" visa will no longer benefit from special taxes applicable to non-habitual residents but may benefit from lower taxes since investment in funds does not involve heavy taxes and duties like the investment in real estate.

In addition, holders of "golden" visas are entitled to apply to extend the residency visa to family members, who are eligible to obtain permanent residence for themselves and their families after five years of holding a temporary residence permit in Portugal, with a stay requirement of only seven days per year.

2.4. START-UP VISA PROGRAM

As a follow-up to the original golden visa programme, IAPMEI, the Portuguese Investment Agency (IAPMEI – Agência para a Competitividade e Inovação) set up the "Start-Up Visa" programme which aims to promote the creation of new businesses and innovative projects.

The program is intended for entrepreneurs who wish to develop entrepreneurial or innovative projects in Portugal, even if they haven’t already set up a company or if they have business projects in their countries of origin and that wish to carry on their activity in Portugal. Candidates must fulfil the following requirements:

• not to have a permanent residence in a country of the Schengen Area;
• to have fulfilled their obligations before the Portuguese Tax Administration and Social Security (if applicable);
• not to have a criminal record;
• to be of age;
• to possess the financial resources equivalent to 12 times the Social Support Indexation (IAS).

For the presentation of the application, the candidate must complete an online form with his identification and the other entrepreneurs involved and also the description of the project, accompanied by the following documents:

• letter of motivation;
• copy of the passport;
• criminal record from their origin country;
• statement from the bank that proves the existence of own financial means of sustenance and the possibility of transferring these funds to a bank operating in Portugal; and
• curriculum vitae.

Applicants should submit their application to one or more incubators on the certified incubators list. In the second phase, the entrepreneur must complete the application information and submit it to IAPMEI through an online platform. Eligible entrepreneurs under the program will conclude an incubation contract with the certified incubator.

 3. TAXATION

3.1. GENERAL INFORMATION

Portugal's nominal tax rates align closely with those of other EU countries, but the country stands out by offering some tax incentives. These include attractive benefits for foreigners, such as the Non-Habitual Resident Tax Regime and the free remittance of funds, which demonstrate Portugal's commitment to attracting international talent.

Regarding income earned abroad, Portugal has entered into over 60 double tax avoidance treaties with countries including Malta, Macao, the United States of America, Poland, Russia, and Hong Kong, among others.

Additionally, Portugal has signed more than 50 bilateral agreements for the promotion and reciprocal protection of investments, alongside over 15 tax information exchange agreements.

3.2. REGISTRATION AS A PORTUGUESE TAXPAYER

To register as taxpayer in Portugal it is necessary to fill in a registration form (ficha de inscrição) in local tax office. The tax registration should be before any activity is carried out in Portugal. The annual income tax return must be completed and delivered to the Portuguese Tax Authority.

The Portuguese tax system is managed by the Portuguese Tax Authority (Direcção-Geral dos Impostos). The tax year follows the calendar year, ending on 31 December.

Self-employed workers must declare the beginning of their activity to the Portuguese Tax Authority.

The annual personal income tax return (Modelo 3) must be filed between 1 April and 30 June of the following year, exclusively via the official online portal.

If a person does not comply with their tax obligations to complete the annual income tax return will be subject to a penalty, which amount ranges from €150 to €3.750.

3.3. PERSONAL INCOME TAX

The personal income tax (Imposto sobre o Rendimento das Pessoas Singulares. IRS) is levied on the yearly amount of incomes received by resident in Portugal, after the appropriate deductions and allowances. It includes salaries, capital gains and real estate income, including income obtained abroad.

It is possible to make a number of limited income deductions in Portugal, such as:

• a general deduction for each taxpayer and each of their dependants;
• health expenses;
• education and training expenses;
• elderly person's day/night care burdens;
• burdens related to real estate and renewable energies;
• burdens related to life and health insurance policies;
• international double taxation;
• some special tax exemptions and/or reductions; and
• some specific deductions depending on the kind of income obtained.

Foreign-sourced income, including pensions, dividends, interest, and capital gains, continues to be exempt from Portuguese taxation provided it is subject to taxation in the source country under a applicable double taxation agreement or based on OECD model tax convention principles. This remains a significant benefit for individuals with international income streams, reinforcing Portugal’s appeal as a tax-efficient destination.

3.4. CAPITAL GAINS TAX

Capital gains derived from the transfer of real estate or shares, or other investments, are also considered as income and taxed as personal income tax.

In case of non-residents, the capital gains, in general, are subject to a flat tax rate of 28%, except some capital gains on the disposal of shares which are exempt in certain cases.

Regarding the sale real estate, income derived from the transfer of property is only taxed on half of their value and the applicable tax rate depends upon the resident's aggregate income. However, if a person sells their permanent residence and reinvests the capital gain obtained in the acquisition of another permanent residence in Portugal within 36 months following the sale, the capital gain is not taxed. For this exemption to apply, there are some requirements that must be fulfilled.

To register as a taxpayer in Portugal, filling out a registration form at the local tax office is necessary, which should be done before any activity is carried out in Portugal. Self-employed workers must declare the beginning of their activity to the Portuguese Tax Authority.

A late return of the annual income tax is subject to a fine ranging from €150 to €3,750.

3.5. NON-HABITUAL RESIDENTS TAX REGIME

Portugal offers non-residents a more favourable tax regime over certain Portuguese and foreign source income without the need to make any investments a special tax regime for non-habitual residents (Residentes Não Habituais - NHR) approved in 2009 and significantly changed in 2024.

Under the 2024 NHR rules, income derived from employment or self-employment in Portugal, within a now more restricted list of "high value-added" activities, is taxed at a flat rate of 20%, compared to the standard progressive rates, which can reach up to 48%.

To qualify for the NHR regime as of 2024, the applicants must:

• work in a profession included in a narrow list of "high value-added" activities, which prioritizes roles critical to economic development (e.g., certain scientific, technological, or academic positions). Applicants must provide documentation proving their professional qualifications and activities align with these categories;
• establish tax residency in Portugal, either residing in Portugal for at least 183 days per year, or maintaining a primary residence in Portugal, defined as a habitual place of residence with the intention of permanent or long-term stay, as recognized under Portuguese tax law; and
• not have been a tax resident in Portugal during the preceding five years before the application.

Once tax residency is established, the individual must formally apply for NHR status through the Portuguese Tax Authority. The application must be submitted by 31 March of the year following the year in which tax residency is acquired. For example, if residency is established in 2025, the application must be filed by 31 March 2026.

The NHR status grants tax benefits for a period of 10 consecutive years, provided the individual maintains tax residency in Portugal throughout this period. Failure to meet residency requirements in any given year may result in the suspension or loss of benefits for that year.

Existing NHR beneficiaries under the 2009 NHR rules who registered before 1 January 2024 will continue to benefit from the reduced income tax rate until the end of the 10-year period initially granted.

4. Buying and renting a home

4.1. MARKET OVERVIEW

According to the National Institute of Statistics (Instituto Nacional de Estatística, INE), Portugal’s statistical authority, the House Price Index recorded a rise of 7.8% in 2024.

The average housing price in Portugal in April of 2024 was estimated to be €2,733 per square metre.

The price per square meter in the metropolitan area of Oporto was, in October of 2024, at €2,789, while prices in the Lisbon area were set even higher, at €4,152.

Lisbon remains one of Western Europe’s more affordable capitals for housing, despite a steady rise in property values.

The average price in central Lisbon ranges between €6,000 and €7,000 per square meter, with prime locations reaching €10,000 sqm. While this figure reflects a premium segment of the market, it is still notably lower than comparable properties in cities like Paris, London, or Amsterdam, making Lisbon an appealing location for real estate investors.

Nationwide, Portugal’s housing market has shown robust growth, fuelled by increased foreign investment and a thriving tourism sector.

Rental opportunities are abundant, with listings available on specialized real estate platforms, in local publications (some in English), and through agencies offering both short and long term leases across the country.

4.2. BUYING A HOME

4.2.1. FORMALITIES

To purchase a home, it is advisable to verify both the legal status and the actual condition of the property. This requires reviewing the documents that identify the property and confirming the legitimacy of the seller.

4.2.2. LAND REGISTRY CERTIFICATE (CERTIDÃO DO REGISTO PREDIAL)

The land registry certificate can be requested either in hard copy or in digital format online. It provides information on the composition of the property, the legitimacy of the seller, and any encumbrances that may affect the property, such as mortgages or collateral.

4.2.3. TITLE CERTIFICATE (CADERNETA PREDIAL)

The property title certificate may be requested from any tax office (repartição de finanças) and contains information about the property's tax situation.

4.2.4. USAGE LICENCE (LICENÇA DE UTILIZAÇÃO)

It certifies the authorised use of the property and may be requested in the City Hall of the district where the property is located.

4.2.5. PROPERTY TECHNICAL DATASHEET (FICHA TÉCNICA DE HABITAÇÃO)

This document contains information about technical and functional features of a property and may be requested in the City Hall of the district where the property is located.

4.2.6. THE PROMISSORY AGREEMENT

The property acquisition procedure usually starts with the execution of a promissory agreement of sale and purchase.

This agreement is not mandatory despite being intended to ensure the conclusion of a Deed of Sale and Purchase.

When the parties sign the promissory agreement, it is customary for the promissory purchaser to pay a down payment to the promissory seller.

For the Promissory Agreement to be effective against third parties, it is necessary to make a provisional registration of the acquisition in the Land Registry Office.

The provisional registration is valid for six months, which may be renewed for an equal period and until one year after the date set by the parties for the execution of the deed of sale and purchase.

The provisional registration has a cost of €250.

4.2.7. THE DEED OF SALE AND PURCHASE

A deed of sale and purchase is the last step of the procedure of acquisition of property. The deed must be executed before a notary and is subject to an expense ranging approximately from €117.65 to €800, depending on the transaction value and the complexity of the operation, for example whether financing is involved or a mortgage is established.

In case a promissory agreement of sale and purchase with real effectiveness has been concluded, the provisional registration becomes definitive at the moment of submission for registration of the deed of sale and purchase.

The conversion of the registry entails a cost of €100.

If no real effectiveness was granted to the promissory agreement of sale and purchase, then the agreement is concluded at the deed. In this case, the amount due is €175.

Alternatively, it is possible to carry out all these formalities through the service "Casa Pronta", at a help desk or through the site www.casapronta.pt.

4.3. PROPERTY TAXES

Buying a property in Portugal requires registration with the Portuguese Tax Authority to obtain a taxpayer identification number. This process involves several taxes and related costs. Typically, the buyer’s costs include Property Transfer Tax (IMT), Stamp Duty, Property and Land Registry Fees, Municipal Property Tax, and legal and notary fees.

4.3.1. TRANSFER TAXES

The transfer of property rights over real estate is subject to Municipal Property Transfer Tax (Imposto Municipal sobre as Transmissões Onerosas de Imóveis – IMT). IMT is levied on the purchase price or property´s taxable value, computed on the higher value.

The IMT rates applicable to residential urban properties are structured on a progressive scale as detailed below:

• up to €104,261: exempt (0%);
• over €104,261 and up to €142,618: 2%, with a deductible amount of €2,085.22.
• over €142,618 and up to €194,458: 5%, with a deductible amount of €6,363.76.
• over €194,458 and up to €324,058: 7%, with a deductible amount of €10,252.92.
• over €324,058 and up to €648,022: 8%, with a deductible amount of €13,493.50.
• over €648,022 and up to €1,128,287: flat rate of 6%; and
• above €1,128,287: flat rate of 7.5%.

If the buyer is a resident in a state, territory, or region considered a tax haven, a fixed rate of 10% applies.

IMT rates include exemptions for young buyers aged 35 or under on their first purchase of a residential urban property up to €316,272. To qualify, buyers must: (i) not be considered dependents for tax purposes in the year they buy—even if they still live with their parents—and (ii) not have owned any residential property at the time of purchase or in the previous three years.

4.3.2. STAMP DUTY

Stamp duty´s taxable base is the same, as for IMT, i.e. is charged on the higher of (i) the tax value of the property or (ii) the purchase price. As general rule, for the acquisition of ownership or other rights on real estate, the rate is 0.8%.

An exemption from Stamp Duty applies to the first acquisition of property intended exclusively for permanent own residence by individuals up to 35 years of age, provided that the same eligibility conditions established for the IMT exemption are met.

4.3.3. MUNICIPAL PROPERTY TAX

Municipal Property Tax (Imposto Municipal sobre Imóveis or IMI) is levied on an annual basis on the value of urban property located in Portugal. For urban properties, the rate is between 0.3% and 0.45% and for properties owned by entities resident in a state, territory or region considered as tax haven, the rate is 7.5%.

High-value residential properties (properties with a total tax value exceeding 600 thousand euros) are subject to the Additional Municipal Property Tax (AIMI). AIMI is levied on the total tax value of residential properties held as of January 1st each year.

For individuals, the first €600,000 of the tax value is partially exempt, with the following rates applied:

• 0.7% on the taxable value (VPT) between €600,001 and €1,000,000;
• 1% on the VPT between €1,000,001 and €2,000,000; and
• 1.5% on the VPT exceeding €2,000,000.

In the case of married couples opting for joint taxation, the exemption threshold increases to €1,200,000.

For companies, the standard rate is 0.4% on the total taxable value of real estate subject to AIMI.

4.4. RENTING A HOME

4.4.1. THE HOUSING MARKET

Portugal’s housing prices continue to rise strongly during improved economic conditions.

Rental properties are advertised on many websites specialising in real estate. In addition, ads can be found in local newspapers or magazines, some in English. Real estate agencies all over the country also offer short and long-term rentals.

Local Lodging, promoted through platforms like Airbnb, has become an increasingly popular trend in Portugal.

Before 2024, Local Lodging operators were subject to an extraordinary contribution (a special tax) that imposed a significant financial burden on hosts. Additionally, municipalities had limited power to control where and how Local Lodging could grow.

In 2024, the legal framework for Local Lodging was revised to address these issues. The extraordinary contribution (special tax) was revoked, and municipalities were given greater decision-making power to better manage Local Lodging locally.

Municipalities can now designate containment areas where new Local Lodging registrations are restricted and set specific conditions and limits for new registrations. Although national restrictions on transferring Local Lodging registrations were lifted, some municipalities may still impose transfer limits on certain registrations.

Furthermore, approval from the condominium owners’ assembly (assembleia de condomíniorityio) is only required for installing hostels within individual units, simplifying regulations for most Local Lodging operations.

4.4.2. LEASE AGREEMENT

Whether long or short-term, a written lease agreement is required in order to rent a property in Portugal.
The parties may stipulate a fixed term for contracts, which will be automatically renewed if none of the parties opposes the renewal of the lease. In the absence of a fixed term provision, the lease agreement will be considered to have a duration of five years.

The amount of the rent can usually be freely agreed upon between the parties, with the exception of low-cost housing.

Rental costs depend on region and particular neighbourhood and may vary according to the number of bedrooms, standards of a property, and the facilities provided.

5. WORKING IN PORTUGAL

5.1. OVERVIEW

The Portuguese labour market, like most other EU markets, remains relatively rigid when compared with benchmark countries.

In 2009, a new Labour Code was approved that simplified labour legislation and paved the way for significant reforms.

The 2009 Labour Code has been subject to changes improving labour standards, particularly as regards the work organisation. Working hours can be changed with a certain degree of flexibility by the employer without increasing labour costs. The Labour Code allows the employer to unilaterally change the workplace (geographical mobility) as well as the functions exercised by the employee (functional mobility).

In April 2023 an amendment to the Labour Code was approved covering a wide number of matters, including, among others, the employment status of digital platforms employees, parental leave, fixed term employment contracts, teleworking, the outsourcing of services and collective bargaining rules.

5.2. THE EMPLOYMENT CONTRACT

Employment contracts in Portugal are subject to the mandatory rules set out in the law on several matters, such as remuneration, working hours, vacation rights or duration of contracts.

The contract duration, working hours, remuneration, leave entitlement, absences, and termination of contracts are the most important matters to be agreed upon by the parties, albeit subject to mandatory rules set out in the Portuguese Labour Code.

In general, employment contracts do not need to be written. The law only requires a written document for some specific types of contracts, such as fixed term contracts, temporary contracts, part-time contracts, secondment contracts and contracts with foreign employees.

The employer has the duty to inform employees of the relevant aspects of the employment relationship, including, among others:

• place of work;
• employee’s job position;
• brief description of employee’s tasks;
• effective date of the employment contract;
• prior termination notice; and
• collective bargaining agreements, if any.

The information on the employee’s identification, place of work, frequency and form of payment and the start of the activity must be provided in writing by the employer and delivered to the employee by the seventh day following the contract execution. The remaining information may be communicated to the employee within one month from the start of the contract execution.

The terms of the employment relationship are also subject to collective bargaining agreements, when applicable, and to the practices between the parties.

Since 1 January 2025, the minimum monthly wage in Portugal is €870. Salaries must be paid on a regular and permanent basis and may be fixed, variable or mixed, including fixed and variable components, which may be linked to productivity, commission based on sales or other objective and determinable factors.

In addition to the monthly salary, employees are entitled to receive a Christmas bonus equal to one month of remuneration payable until 15 December of each year and a holiday bonus equal to one month of remuneration payable before the holiday period.

The maximum regular working period is eight hours per day and 40 hours per week. Employees are entitled to a minimum rest period of eleven consecutive hours between two successive daily work periods, as well as to one day of rest per week.

An additional weekly rest (in all or in certain weeks of the year) may also be given other than the rest day required by law.

Employers and trade unions may agree to increase the work schedule up to 12 hours per day and 60 per week, provided the work schedule is reduced in other periods so that at the end of a reference period up to 12 months, the average working hours is equal to 8 hours per day and 40 hours per week.

Employees are entitled to 22 business days of paid holiday per year. Employees are also entitled to 13 national public holidays. Under the collective bargaining agreements, employers may be obliged to grant two optional public holidays.

5.3. TYPES OF EMPLOYMENT CONTRACTS

The most used types of employment contracts are:

• Open-ended or "permanent" contracts. The general rule is that contracts without a specified term are deemed permanent, which means that the employer may only terminate the contract in the cases allowed by law;
• Fixed term contracts. Term contracts are in force for a pre-established period set according to the employer’s temporary needs, which must be specified in the contract, and expire at the end of the agreed term unless they are renewed. Fixed term contracts cannot be renewed more than three times, have a maximum duration of two years, and are only allowed under specific legal requirements;
• Unfixed term (permanent) contracts. Unfixed term (permanent) contracts do not have a pre-established duration. These contracts expire either upon completion of the employer’s project or when the reason for which the employee was hired no longer exists. Unfixed term contracts may be used only to meet the employer’s temporary needs and may not exceed a maximum duration of four years; and
• Temporary employment contracts. Temporary employment contracts are contracts with temporary work agencies which hire employees to subsequently second them to the user company. Temporary employment contracts may only be used to satisfy the employer’s temporary needs and be renewed up to a maximum of two years.

5.4. PROBATION

Probation periods, during which either party may unilaterally terminate the contract without prior notice and without cause, are allowed.

The length of the probation period depends on the contract in question, with the possibility of reduction by collective bargaining instrument or by written agreement between the parties.
The maximum probation periods are:

• for open-ended contracts, the probation period is as follows: (i) 240 days for employees in management or senior positions; (ii) 180 days for employees in roles requiring technical complexity, a high degree of responsibility, special qualifications, or a higher level of trust and confidence, as well as for first-time jobseekers and long-term unemployed persons; (iii) 90 days for all other employees. For first-time jobseekers and long-term unemployed individuals, the 180-day probation period may be reduced or excluded if they have previously completed a fixed term contract of 90 days or more with a different employer.
• for fixed and unfixed term contracts: (i) 30 days for contracts with a duration equal to or higher than six months and (ii) 15 days for contracts with a duration of less than six months.

The probationary period described above may be reduced or waived, depending on the duration of a previous contract for the same activity. This applies if the employee has previously worked for the same employer under one of the following contracts:

• a fixed-term contract;
• a temporary employment contract for the same position;
• a service contract for the same purpose; or
• a professional internship for the same activity.

The reduction or exclusion of the probationary period depends on whether the length of the previous contract was less than, equal to, or greater than the duration of the current contract, provided that all contracts were concluded with the same employer.

In case of termination of the employment contract during the probation period, employees are not entitled to any compensation unless otherwise agreed in writing by the parties.

5.5. WORKING HOURS

The maximum regular working period is forty hours per week, eight hours per day.

Employees are entitled to a minimum rest period of eleven consecutive hours between two successive daily work periods, as well as to one day of rest per week. An additional half or full day of rest (in all or in certain weeks of the year) may also be given in addition to the rest day required by law.

Insofar as the statutory rules above are not contravened, collective bargaining agreements may provide alternative working time regimes.

Work exceeding the limits above is deemed overtime. Overtime gives the employee the right to additional pay and, in certain circumstances, to an additional rest period. Employees’ overtime is subject to certain limits imposed by the Portuguese Labour Code.

5.6. REMUNERATION

Employees are entitled to a minimum monthly salary set by law each year. Collective bargaining agreements may also determine a minimum remuneration for different jobs and professions, which can never be less than the minimum monthly remuneration set by the Portuguese Government.

The remuneration must be paid on a regular and permanent basis and may be fixed, variable or mixed (comprising fixed and variable components).

In each year, employees are entitled to receive twelve monthly remunerations. In addition, employees are also entitled to receive:

• a Christmas bonus equal to one-month remuneration payable until December 15; and
• a holiday bonus equal to one-month remuneration payable before the holiday period.

The amount of both Christmas and holiday bonuses is proportional to the time of service rendered by the employee in that calendar year (i) in the year of hiring of the employee, (ii) in the year of termination of the contract of employment and (iii) in the event of suspension of the contract of employment, unless the suspension is due and determined by employer’s reasons.

5.7. TELEWORK

5.7.1. DEFINITION AND LEGAL FRAMEWORK

Teleworking refers to the performance of work by an employee under the legal subordination of an employer, conducted at a location not determined by the employer, and facilitated by the use of information and communication technologies.

5.7.2. MANDATORY WRITTEN AGREEMENT

Teleworking agreements must be made in writing. The telework agreement may be incorporated into the initial employment contract or established as a separate document.

The agreement must include the following:

• identification of the parties;
• frequency and method of personal contact;
• working hours;
• the usual place of work for the employee; and
• the employee’s salary, along with any additional or complementary benefits.

Any change to the designated place of work set out in the agreement must also be documented in writing.

5.7.3. COMPENSATION FOR ADDITIONAL

The employment contract or the applicable collective labour regulation must define the compensation owed to the employee for additional expenses incurred due to teleworking. Such expenses must be addressed at the time the teleworking agreement is concluded.

5.7.4. DURATION OF TELEWORKING AGREEMENTS

A teleworking agreement may be established for either open-ended (or "permanent") contracts or fixed term contracts. In fixed term agreements, telework is limited to a maximum of six months automatically renewed for equivalent periods unless either party provides written notice of non-renewal at least 15 days before the expiration date. In open-ended contracts agreements, either party may terminate the telework arrangement by providing 60 days’ written notice. In both cases, either party may terminate the agreement during the first 30 days without prior notice.

5.7.5. RETURN TO IN-PERSON WORK

Upon the conclusion of the agreed teleworking period, whether under an open ended contract or before the expiration of a fixed term contract, the employee must resume in-person work.
This transition does not affect the employee’s category, seniority, or any other rights equivalent to those of in-person employees with similar duties and working hours.

5.7.6. EMPLOYER RESPONSIBILITIES FOR EQUIPMENT AND SYSTEMS

The employer is responsible for providing the necessary equipment and systems required for teleworking. The written agreement must clearly outline whether the employer will directly supply these resources or if the employee is responsible for acquiring them, with subsequent reimbursement.

5.7.7. REIMBURSEMENT OF ADDITIONAL EXPENSES

The employer must fully cover or reimburse all additional expenses incurred by the employee, provided they are demonstrated. These expenses include costs related to acquiring computers or other necessary equipment, as well as increased energy and communication costs, and the maintenance of such equipment and systems.
The method for calculating additional expenses involves a comparison of the employee’s costs in the same month of the previous year, prior to the implementation of the teleworking agreement.

5.8. VACATION AND TIME OFF DAYS

5.8.1. VACATION

Employees are entitled to 22 business days of paid holiday per year. Employees are also entitled to 13 national public holidays: 1 January, Good Friday, Easter Sunday, 25 April (commemorating the 1974 democratic revolution), 1 May (workers' day), Corpus Christi, 10 June (Portugal's national day), 15 August, 5 October (commemorating the Portuguese Republic), 1 November (All-saints), 1 December (Portugal's Independence Day), 8 December (Immaculate Conception) and Christmas day.

Under certain collective bargaining agreements, employers may be obliged to grant two optional public holidays: Carnival/Shrove Tuesday and the local municipal holiday.

5.8.2. TIME OFF FOR ILLNESS OR INJURY

Employees are entitled to take time off from work due to illness or injury set out in the law. Collective bargaining agreements may establish specific rules regarding employees’ time off entitlements granted by the employers.

In case of illness or injury, employees are entitled to receive sick pay from Social Security, calculated based on their reference remuneration under Social Security criteria. This pay typically ranges between 55% and 75% of the employee's remuneration, depending on the duration of the illness or injury. To claim this benefit, employees must submit a specific form along with a statement from a hospital, health centre, or doctor evidencing their condition to Social Security.

Additionally, employees are entitled to time off to care for a sick child or dependent, or to provide support to family members in a hospital located outside their area of residence. In some instances, such absences may result in a loss of remuneration for the employee.

If the absence is unforeseeable, employees must inform their employer as soon as possible. For foreseeable absences, the employee is required to notify the employer at least five days in advance, clearly stating the reasons for the absence.

5.8.3. PARENTAL LEAVE

Employees are entitled to parental leave for a child’s birth, which may be shared between both parents after the birth of the child. The initial parental leave is granted for a period of up to 120 or 150 consecutive days, depending on the parent's choice. A bill for increasing parental leave to 180 or 210 days is now under discussion in Parliament.

The initial parental leave can be increased by 30 days if one of the parents takes exclusively one period of 30 consecutive days or two periods of 15 consecutive days after the mother's compulsory period of six weeks of leave following childbirth.

The following daily values are applied to the amounts of the allowances according to the period of concession:

• for (i) 120 days and (ii) 150 days of shared leave: 100% of reference pay;
• for 180 days of shared leave where each person takes consecutively 30 days or two periods of 15 days: 83% of the reference remuneration;
• for 180 days of leave where the father takes consecutively 60 days or two periods of 30 days, in addition to the father's exclusive period: 90% of the reference pay;
• for 150 days of leave: 80% of the reference pay.

The amount of the allowance cannot be less than €13.58.

In the case of shared parental leave, employees must also inform their employers of the start and end dates of each of their leave periods through a joint written statement up to seven days after the child’s birth.

Notwithstanding the rules above, female employees are always entitled to 72 days of leave, of which a maximum of 30 days are taken optionally before the birth, and 42 days (6 weeks) are mandatory and taken immediately after the birth.

The father must take mandatory parental leave of 28 working days (consecutive or not), of which seven consecutive days immediately after the birth of the child and 21 days in the 42 days following the birth of the child, taken in minimum periods of seven days. Fathers are also entitled to an additional and optional period of seven days (consecutive or not), provided that this leave period is enjoyed at the same time as the mother’s leave period.

Employees are also entitled to leave to travel to a hospital located outside their island of residence to give birth.

After the 120-day leave period, parents can accumulate the remaining period of the initial parental leave with part-time work.

In this case, the remaining period is registered as half-days, and the period of subsidised leave is split, i.e. a period of 30 days is split into 60 half-days.

If the parents choose to share the initial parental leave and each takes exclusively, i.e. not at the same time, a period of 30 consecutive days or two periods of 15 consecutive days after the mother's compulsory six weeks, the period of leave of 120 or 150 days and the respective pay, depending on the option, is increased by 30 days.

5.9. TRANSFER OF BUSINESS

In the event of a transfer of business, all of the employer’s rights and obligations under the employment contracts are automatically transferred to the new employer. During the two years following the transfer, the former employer will remain liable, jointly and severally with the new employer, for all the obligations that became due before the date of the transfer of business. The transfer of an undertaking cannot itself be a reason for the dismissal of employees.

5.10. TERMINATION OF EMPLOYMENT CONTRACTS

The termination of employment contracts can only happen under the terms and conditions set forth in the Labour Code, and dismissals without just cause are prohibited.

Employment contracts may only be terminated in the following cases:

• expiration of term contracts;
• unilateral termination during the probationary period;
• collective dismissal;
• redundancy;
• dismissal for ineptitude; and
• dismissal due to a fact attributable to the employee.

Employers and employees are also free to terminate the employment contract by mutual agreement at any time.

5.11. TERMINATION BY THE EMPLOYEE

The employee can terminate the contract with just cause in the cases specified in the law, in which case she/he will be entitled to receive compensation.
Regardless of the existence of just cause, the employee can terminate the employment contract with prior notice of 30 or 60 days, depending on whether the contract lasted for less than or more than two years, respectively.

5.12. DISMISSAL DUE TO BREACH OF CONTRACT

The employer may dismiss the employee with "just cause", following a disciplinary process, in case of breach of her/his legal or contractual duties, without the obligation to pay any compensation.

The employer may terminate the employment with just cause. The following, among others, constitute just cause for dismissal:

• failure to comply with a manager’s orders;
• infringement of the rights and guarantees of other employees;
• repeatedly provoking conflicts with other employees;
• persistent lack of interest in fulfilling the duties inherent to the position or job;
• providing false justifications for absences;
• unjustified absences (either five consecutive days or ten non-consecutive days); and
• intentional non-compliance with labour rules regarding safety, health, and hygiene.

Dismissal with just cause may only take place after conducting a disciplinary procedure against the employee, which must be initiated within 60 days after the employer becomes aware of the actions that, in her/his view, constitute a breach of the employee’s duties. The proceedings are conducted by a senior person at the company, usually in the human resources department or legal department.

5.13. SEVERANCE PAY

Employees dismissed for reasons other than a breach of contract are entitled to receive a severance pay. The amount of this compensation depends on the type of contract, whether permanent or term (fixed or unfixed), and the date the employment started.

The legal framework for severance pay is outlined in the Portuguese Labour Code, as well as by Law 69/2023 of 30 August 2023, establishing the latter special severance rules, calculation methods, and limits for employment contracts entered into before and after 1 November 2011.

Under the current severance pay rules, employees with longer tenures are entitled to higher severance payments compared to those with shorter tenures. Due to the complexity of the severance pay rules that set variable amounts determined by specific employment dates, contract duration, base salary, and seniority, the exact amount of compensation must be determined on case by case basis.

In general, the severance payment for dismissed employees under permanent employment contracts entered into on or after 1 May 2023, is equal to 14 days of the base salary plus a seniority allowance for each year of service (diuturnidades) with proportional adjustments for incomplete years (calculated in months).

The calculation of the severance compensation is subject to the following limits:

• the amount of the monthly base salary and seniority payments of the employee to be considered for compensation calculation cannot exceed 20 times the minimum monthly wage (now €870,00 in Portugal mainland, and €915,00 and €913,50 in Autonomous regions of Madeira and the Azores respectively); and
• the total compensation amount cannot exceed 12 times the employee’s monthly base salary and seniority payments, or, when the limit referred above is applicable, 240 times the guaranteed minimum monthly salary.

The daily value of the base salary and seniority payments is calculated by dividing the monthly amounts by 30. For fractions of a year of service, the compensation is calculated proportionally.

The severance compensation for the expiry of term employment contracts (not applicable if the employment is terminated by the employee in case of fixed-term contract) or for the termination of a term employment contract based on objective grounds (such as collective dismissal or redundancy) is, as of 1 May 2023, equivalent to 24 days of base salary and seniority pay for each complete year of service. The method for calculating this severance is subject to the rules outlined above.

5.14. UNEMPLOYMENT BENEFITS

The termination of employment contracts by the employer (collective dismissal, redundancy, ineptitude or expiration) entitles the employee to receive unemployment benefits from the Social Security, which do not entail any costs to the employer.

In the event of termination by mutual agreement, the employee may still receive unemployment benefits, at no additional cost to the employer, provided that the following conditions are fulfilled:

• the termination of the employment contract is justified by reasons that would allow the termination under a collective dismissal procedure or dismissal due to job extinction;
• no more than three employees or 25% of the company’s workforce (for companies with up to 250 employees) and no more than 62 employees if the company has more than 250 employees; and
• in companies with more than 250 employees, when 62 employment contracts are terminated, or up to 20% of the workforce, with a maximum limit of 80 employees in each three-year period.

If those requirements are not met, the employer will be obligated to reimburse the Social Security for all the amounts paid to the employee as unemployment benefits, but the employee will not lose the right to the employment benefits that she/he received.

If these requirements are not met, the employer will have to reimburse Social Security for all amounts paid to the employee.

To access unemployment benefits, the employee must:

• reside in Portugal;
• have had the employment terminated;
• be unemployed involuntarily;
• not be employed. Individuals working part-time or as an independent contractors are only entitled to partial unemployment benefits if their earnings are less than the unemployment benefit;
• be registered with the Employment Service; and
• have applied for unemployment benefits within 90 consecutive days from the date of employment termination.

6. Education

6.1. Overview

Over the past decades, the Portuguese educational system has seen significant improvement. Education is universal, free, and compulsory until the age of 18. Parents are obligated to enrol children with a State or private school and the student has the obligation to attend school.

The education system in Portugal comprises public schools managed by the State, autonomous regions, municipalities, and other public entities, as well as private schools operated under a State-issued license.

Schools and educational facilities within the national education system are deemed to be of public interest.

Because the number of foreign nationals has been increasing in recent years, many of whom do not have Portuguese as their mother tongue, most schools have professionals that speak more than one language.

Many Portuguese schools are prepared to educate foreign children of all ages in more than one language.

6.2. EDUCATION LEVELS

The Portuguese school system organised in three levels: pre-school education (ages 3 to 5), primary education (typical ages 6 to 14) and secondary education (ages 15 to 17).

6.2.1. PRE-SCHOOL, PRIMARY AND SECONDARY EDUCATION

Pre-school education covers children from the ages of three to five years. The State is responsible for ensuring a network of pre-school facilities allowing the enrolment of all five-year children and education for such children, free of charge. It is provided by the State, by private and cooperative bodies, by private social solidarity institutions and not-for-profit institutions.

State primary school is universal, compulsory and free of charge in respect to enrolment, attendance and certification fees and costs. It is intended for children aged between six and fifteen.

Secondary education is a cycle of specific studies and includes various courses intended principally to prepare young people to go on to higher education or to enter the labour market.

Access to secondary education requires a prior completion of primary school. It takes three years with a large variety of courses including professional courses. Upon completion and approval, the students are granted a certificate for purposes of access to the university or employment, as the case may be.

6.2.2. HIGHER EDUCATION

At present, higher education in Portugal is divided into two subsystems: university education and non-university higher education (polytechnic education), and it is provided in State and private universities and non-university higher education institutions (both State and private). Access to higher education requires prior completion and approval in secondary school or equivalent.

Universities award first degrees, master’s degrees and doctorates, including Ph.D. Polytechnic institutions award first degrees and master’s degrees.

Students over 23 years, who have not completed secondary school, may also have access to higher education provided they complete and approve specific entry tests.

According to the Times Higher Education World University Rankings of 2025, there are 17 Portuguese Universities ranked in the Top Universities in the world.

In 2025, Portugal strengthens its position in international business education, with five management and business schools featured in the prestigious Financial Times European Business Schools ranking. Among them, Nova School of Business & Economics stands out, ranked 8th globally in the Financial Times Masters in Management ranking, marking the highest position ever achieved by a Portuguese institution in this category. Católica Lisbon School of Business & Economics also maintains strong international recognition, securing the 27th place worldwide in the same ranking

6.2.3. STATE AND PRIVATE SCHOOLS

Portugal has a network of State schools which covers the entire country and serves approximately 1.2 million students.

There are also many private schools in Portugal, spread nationally across all main cities in the country. According to the official data, approximately 341,222 students are enrolled in private schools.

In general, private schools have better facilities than State schools and offer many extra-curricular activities. Private schools tend to top the national education rankings, which measure the students results at the end of second and third learning cycles.

The differences seem to result from the different approach and better resources of private schools, but also from the students social and economic differences. Several State schools also show goods results.

To be admitted to private schools may require passing admission tests and the payment of a tuition. Admission is at the discretion of the school board. There are English-speaking international schools in Portugal, especially in primary and secondary education, which can be found mainly in Lisbon, Oporto and Algarve.

Some schools follow international programmes such as the «International Baccalaureate» programme, the British «GCSE and GCE» examination systems, and the «Council of International Schools» accreditation, which allow students to access several foreign universities without the need for special admission procedures.

Some countries have established schools in Portugal with dual language teaching which follow their national curricula and are also recognised by the Portuguese Government.

France established the «Lycée Français Charles Lepierre» in Lisbon and the «Lycée Français International» in Oporto, Germany has two schools, «Deutsche Schule» in Lisbon and Oporto, and Spain one school in Lisbon, «Instituto Español, Giner de los Ríos». The most well-known School that teaches in

English is the St. Julian’s School, located in Carcavelos, near Lisbon, founded in 1932.

Graduation in these schools gives access to universities in the respective home countries.

Many State and private schools in Portugal offer the opportunity to learn other languages besides English, such as Spanish, German and French.

7. Health

7.1. The Public Health System

Portugal has public health system financed by the State budget, the National Health System (Sistema Nacional de Saúde, SNS).

SNS beneficiaries pay reduced fees (in many cases, much below cost) for consultations, exams, surgeries and other clinical services.

The World Health Report by the World Health Organisation ranked Portugal’s healthcare system in 12th place of its ranking.

There are also public health sub-systems that include several professional sectors which operate independently or under agreements with the SNS.

The main State health subsystem is the health assistance system for the civil servants, named «ADSE»; other examples are the clinics and hospitals of the bank workers («SAMS») trade union and the military personnel health system.

The Portuguese State pays part of the cost of most medicines. Some medicines, as is the case of vital medication for treating serious illnesses, are subsidised in full. The State subsidy is deducted from the price charged to the patient when purchasing the medicine.

EU citizens residing in Portugal and working in another EU country are entitled to health treatment in both countries.

In this case, the individual must obtain an «S1 Form» (certificate of entitlement to health care in another EU country) from the social security of the country where they are registered and deliver it to the

Portuguese local district social security centre of their place of residence. The «S1 Form» gives access to health care in Portugal on the same terms as Portuguese citizens.

The same applies to retirees living in Portugal who receive a pension from an EU country.

Citizens of the European Union countries, as well as of Iceland, Liechtenstein, Norway and Switzerland may obtain treatment in Portuguese SNS hospitals with an European Health Insurance Card (EHIC) (issued in the country of origin).

Overseas citizens holding Portuguese residency permits must be registered at a Health Centre and must hold a «User's Card» (Cartão de Utente), which may be obtained at the Health Centre by presenting a document showing proof of residence authorisation.

Non-EU citizens may have to pay some additional fees for public healthcare in Portugal; the amount will depend on whether there is a reciprocal healthcare agreement between Portugal and the home country.

7.2. PRIVATE HOSPITALS

Portugal has several private hospitals, which have agreements to offer services at reduced rates to holders of health insurance policies as well as beneficiaries of the National Health Service (SNS) and members of other public health subsystems.

According to the Portuguese National Statistical Institute, Portugal has 130 private hospitals, slightly more than half of the 242 hospitals that exist in the country.

In 2024, private hospitals recorded a total of 1.5 million emergency episodes, representing approximately 20% of the total emergency care provided in the country.

In general, private hospitals offer any necessary medical care services and, in some cases, have achieved international recognition for their excellence, like Fundação Champalimaud, which has established a world-leading centre for research and treatment in neuroscience, oncology, and vision care.

In very complex medical specialties, SNS hospitals are usually well equipped and sometimes better than private hospitals, albeit pressed by demand. For instance the Institute of Hygiene and Tropical Medicine, which is part of the SNS, is one of the world’s leading institutes in the field of tropical diseases.

In highly specialized areas of medicine, public hospitals are generally well equipped and, in some cases, surpass private hospitals, despite high demand. For example, the Institute of Hygiene and Tropical Medicine, part of the SNS, is recognised as one of the world’s leading institutes in tropical diseases.

7.3. HEALTH INSURANCE

A significant part of the Portuguese population is covered by private health insurance. Portuguese and international companies offer employees health insurance which usually covers the employee and his/her family.

A substantial portion of the Portuguese population has private health insurance. Both Portuguese and international companies provide health insurance to employees, which typically extends coverage to their families.

Several leading insurers offer health insurance policies in Portugal, including Multicare, Fidelidade, Ocidental, Tranquilidade, and international companies such as Allianz.

Health insurance policies are typically renewed annually, with premiums recalculated each year. The cost of premiums depends on various factors, including the insured's age, pre-existing medical conditions, and overall health risks, as well as the level of coverage.

Certain expenses related to private health insurance may be deducted from taxable income for personal income tax purposes.

7.4. PHARMACIES AND COST OF MEDICINES

The Portuguese State covers part of the cost of most medicines, with some being fully subsidised, particularly those essential for treating certain illnesses. Patients receive partial reimbursement when purchasing prescribed medicines.

Prescription medicines are mainly available in pharmacies. Some non-prescription medicines, such as painkillers or vitamins, may also be sold in commercial outlets like supermarkets or convenience stores, provided they are properly supervised by qualified staff. These establishments are marked by a green cross on a white background.

7.5. EMERGENCIES

In case of a medical emergency, dial 112, the EU-wide emergency number. This number is free to call and can be reached from any mobile phone, even without a SIM card. For general medical advice in Portugal, you can contact the Saúde 24 (Health Line 24) call centre at 808 24 24 24. This service is also free of charge.

Introduction

Energy purchase and sale agreements between producers, consumers, and traders—commonly known as Power Purchase Agreements (“PPAs”)—have been gaining importance as instruments for price stabilisation and for financing renewable energy projects. Despite their potential, the use of PPAs in Portugal remains limited compared to other European countries. The main obstacles include a lack of data on prices, volumes, and contractual conditions—which complicates risk assessment—and a lack of standardisation and legal certainty, especially regarding contracts with end consumers.

To encourage the contracting of PPAs, Decree-Law No. 99/2024 established the foundations for the new activity of bilateral energy registration and contracting. This was further detailed by Ordinance No. 367/2024/1, which creates a new OMIP registration platform, to be managed by OMIP, S.A. (“OMIP Platform”).

Registration of PPAs on the Electronic Platform becomes mandatory, allowing:

• Sellers and buyers to disclose contractual conditions for negotiation and conclusion of PPAs, facilitating the meeting of supply and demand; and
• the production of aggregated and reliable statistics, essential for market monitoring and public policy definition.

Additionally, the OMIP Platform will:

• Provide standard clauses and contract templates, making it easier to draft more balanced and secure PPAs, especially for smaller agents, who can thus join the market with greater autonomy; and
• Serve as a meeting point between renewable energy supply and demand, facilitating negotiation, transparency, and liquidity in the PPA market.

The operation of the OMIP Platform will be regulated by a Manual de Procedimentos da atividade de registo e contratação bilateral de energia elétrica (“MP PPA”), whose preliminary version was under public consultation from May 20 to June 20, 2025.

The MP PPA will come into force the day after its publication, subject to the OMIP Platform becoming operational. The platform is scheduled to go live on June 29, 2025.

THE OMIP PLATFORM

Eligible PPAs and Producers

PPAs that satisfy the following criteria must be registered on the Platform:

• Include the actual delivery of energy (i.e., bilateral, physical PPAs);
• Have a term exceeding one year; and
• Are concluded between:

1. An energy producer (or their representative/aggregator); and
2. A natural or legal person purchasing the energy under the agreement as a trader, aggregator, or end customer.

A producer is considered to be the holder of permit for:

• A power generation facility; or
• A self-consumption production unit (“UPAC”) whose surplus energy is partially or fully sold through bilateral agreements.

The following will also be construed as producers:

• Hybrid systems, where the power generation facility or UPAC combines multiple renewable sources (e.g., wind and solar);
• Independent storage units, meaning installations not directly linked to a generation site but capable of injecting power into the Public Service Electricity Network (“RESP”) on their own.

In every case, an entity is classified as a “producer” only if the licensing process requires prior allocation of injection capacity into the RESP.

The length of a PPA is defined by its initial period, or by any extension of it in cases where the initial term is one year or less.

Entity Registration on the OMIP Platform

ENTITY REGISTRATION PROCEDURE on the OMIP Platform

Producers and buyers who

• Have already signed, or plan to sign, one or more PPAs that require registration; and/or
• Plan to execute one or more PPAs through the OMIP Platform

are required to register on the OMIP Platform. This registration follows the creation of a user account, which can represent producers, buyers, or market agents.
Each registered user may associate several producers and buyers, identified through their ACER and CRIA codes. Registration is carried out via a form, which must include the following details:

1. Identification of the producer or buyer, including name or company name, address, access code to the permanent certificate, tax number, and declaration from the central register of beneficial owners;
2. Identification of the representative along with documentation proving the authority to act in that capacity;
3. Specification of the authorisations granted to the user responsible for registering the producer or buyer, for using the OMIP Platform, and proof of such authorisations;
4. Declaration, under a commitment of honour, confirming that the provided information and documents are accurate and complete.

Once the form and required documents are submitted, the registration will be pending OMIP’s validation. If all criteria are met, the registration will be finalised.

The user will then be able to view PPA offers, register agreements made by the producers or buyers they represent, and also negotiate and sign PPAs through the OMIP Platform, within the limits of the powers assigned.

Any updates to the submitted information must be reported to OMIP through the OMIP Platform within five business days.

PPA Registration on the OMIP Platform

Procedure for registering PPAs on the OMIP Platform

PPA registration must be carried out by the producer or purchaser responsible for energy scheduling, or by an authorised entity, provided they are already registered on the OMIP Platform.

A registration fee applies and must be paid within five business days of contract signing; otherwise, a higher fee will be charged. Existing PPAs must be registered within 90 days from the launch of the OMIP Platform.

To register a PPA, the following details must be provided by completing a form on the OMIP Platform:

1. Identification of the involved parties, including ACER and CRIA codes;
2. Identification of the entity responsible for submitting PPA execution schedules;
3. Current development phase of the generation facility, UPAC, or independent storage system at the time of PPA registration (licensing, construction, or operational phase).

Registration also requires details regarding the terms of electricity purchase and sale:

1. Contracted volume (which can be an estimate based on production or consumption profiles and maximum allowed generation capacity in MW);
2. Pricing details (including the pricing structure);
3. Generation technologies employed; and
4. Contract duration, specifying start and end dates.

The user submitting the registration affirms, under honour commitment, that the information is accurate and complete. Registration is finalised once the data is submitted, and the fee is paid.

Any updates or changes to the provided information, including the development status of the project, must be reported to OMIP within five business days.

Voluntary Contracting on the OMIP Platform

Disclosure of terms on the OMIP Platform

The MP PPA (as in its current draft proposal) includes a complementary activity, which involves promoting the negotiation and conclusion of PPAs through the OMIP Platform. Participation in this negotiation is voluntary, unlike registration, which is mandatory.

Thus, producers and buyers registered on the OMIP Platform may disclose contractual terms which, if accepted by a counterparty also registered on the platform, enable the conclusion of a PPA.

This disclosure may be made either directly or via a representative, and should outline the key terms considered essential by the disclosing party, including:

1. The contract structure (e.g., a fixed hourly profile, a monthly or annual baseload, or remuneration based on actual production);
2. The intended contract duration;
3. The current stage of project development;
4. Whether guarantees of origin will be transferred;
5. The primary energy source and technology employed in the project;
6. The electricity pricing model, specifying whether it is fixed, variable, or hybrid, and the methodology for its calculation;
7. Responsibility for energy dispatch and compliance with reporting obligations;
8. Responsibility for imbalance charges, as well as the provision of guarantees by both the producer and the buyer;
9. The estimated volume of electricity to be generated or consumed, and whether this is intended to be covered by a single PPA or may be split across multiple agreements.

The terms are made available on the OMIP Platform for review and negotiation among registered users via a secure, confidential messaging channel. Should the parties reach an agreement based on these published terms, they may proceed to formalise the PPA using templates and standard clauses provided by OMIP.

Negotiating and executing PPAs on the OMIP Platform

The conclusion of a PPA via the OMIP Platform starts with the completion of a form, which includes the identification of the parties involved, details of the power generation facility, the contractual terms agreed upon during negotiations, and any clauses the parties wish to incorporate into the PPA.

Once negotiations are successfully concluded on the OMIP Platform, producers and buyers can choose from standard clauses offered by OMIP, in addition to incorporating any other terms mutually agreed upon.

After the PPA draft is finalised, the parties are responsible for reviewing and confirming its content. Provided no further changes are required, the OMIP Platform will then produce the PPA for the parties to sign.

If the PPA is concluded via the OMIP Platform, the parties may request automatic contract registration, with the form pre-filled using the information submitted during the PPA execution process.

Once the PPA has been concluded, the user who posted the contractual terms on the OMIP Platform is required to withdraw them within 10 business days, regardless of whether they registered the contract themselves.

Parties may utilise the OMIP Platform to advertise their terms and identify potential interested parties for a PPA. However, they are under no obligation to negotiate or finalise the contract via the platform and may choose to conduct these processes independently.

OMIP does not have access to either the negotiations or the draft PPA created by the parties through the OMIP Platform.

Concluding a PPA via the OMIP Platform requires payment of a fee, which exempts the party from paying the standard fee associated with compulsory registration.

FEES For using the OMIP Platform

Fees for the use of the OMIP platform

OMIP levies a fee for the following services offered via the OMIP Platform:

• Registration of PPAs;
• Modification of details or documents submitted for PPA registration;
• Publication of contractual terms for the negotiation and conclusion of PPAs;
• Conclusion of PPAs through the OMIP Platform..

Payment for PPA registration and information updates is made in a single instalment. In contrast, the fee for executing PPAs via the OMIP Platform is paid in equal instalments throughout the estimated duration of the PPA, excluding the final six months.

Should the PPA terminate earlier than anticipated, any outstanding fees must be settled on the termination date.

All fees must be paid within 30 days of the invoice being issued by the OMIP Platform.

A delay in the payment of PPA registration or data amendment fees will incur a 10% surcharge. Moreover, failure to meet the payment obligation for PPA registration will block the scheduling of electricity, thus preventing its commercialisation.

The fee structure for the PPA Market (MP PPA) has yet to be established, with only the procedure for its determination and approval currently outlined. OMIP will be responsible for submitting a well-founded proposal to ERSE, detailing the applicable conditions and pricing, which will then be subject to approval by the regulatory authority.

Fees will be waived for the initial 12 months after the OMIP Platform comes into operation.

This briefing provides an introduction to the legal framework, court structure, judicial procedures, and key considerations for investors and businesses entering the Portuguese market.

The WhyPortugal2025 briefings cover civil, commercial, tax, and administrative litigation, as well as practical guidance on business setup, investment incentives, employment, taxation, intellectual property, real estate, and dispute resolution.

Introduction

An important aspect for investors when entering in Portugal is to understand how the judicial system works. Foreign clients need help in understanding the law that applies to the specific matter at hand as well as a good understanding of the procedural rules that apply in Portugal. Most foreign clients will be intrigued with the formalistic approach of Portuguese procedures.

This briefing serves as an introduction to Portuguese judicial system giving an overview of the following matters:

• the legal framework: the Portuguese code of civil procedure and the International conventions concerning legal proceedings to which Portugal is a party;
• the court system; civil and administrative courts, powers of the courts;
• the legal proceeding: the claim and the defence, the court hearings and trial, the decision and the appeal process; and
• the court fees.

Other key information concerning the most relevant aspects about doing business in Portugal is available at www.macedovitorino.com/en/Why-Portugal. In the «Why Portugal» webpage, we review the main aspects that concern businesses and individuals investing in Portugal, including:

• how to set up a business;
• forms of investment incentives and government grants available and how to apply;
• getting a Portuguese residence permit or a golden visa;
• hiring employees, employers' obligations and rules concerning the dismissal of employees; ;
• Portugal's main taxes, including among others personal and corporate income taxes, VAT and property taxes;
• intellectual property protection, software, patents, trademarks and technology;
• real estate, acquisition and lease of property and financing and tax related issues;
• dispute resolution, the judicial system and of the main steps and costs of lawsuits.

The Legal Framework

2.1. BACKGROUND

Portugal’s legal system has its roots in Roman law. The first effort to codify Portuguese law dates back to the XV century.

After the French Revolution and following the enactment of the Napoleonic Code that repealed French common law in 1804, Portugal approved its first Civil Code in 1867. Other codes were approved in the XIX century, including but not limited: the Commercial Code of 1888, the Code of Civil Procedure of 1876 and the Criminal Code of 1852.

Presently most of Portuguese civil and commercial law is either codified or set out in statutes of law. Notwithstanding, case law still plays a considerable role, as judges look to precedents for guidance and support of their decisions.

2.2. THE PORTUGUESE CODE OF CIVIL PROCEDURE AND INTERNATIONAL CONVENTIONS

The main procedural rules in what regards civil procedural in court, appeals, judgement and the enforcement of judicial and arbitral decisions were codified by the Portuguese Code of Civil Procedure (“CPC”) approved by Decree-Law 44129, of 28 December 1961 as amended from time to time.

Portugal is a party to various international Conventions, such as the Hague Conferences on Private International Law, in what regards civil and commercial matters, whether on procedural and substantial aspects. A few examples are (i) Convention of 1 March 1954 on civil procedure, (ii) Convention of 5 October 1961 abolishing the requirement of legalisation for foreign public documents, (iii) Convention of 15 November 1965 on the service abroad of judicial and extrajudicial documents in civil or commercial Matters, (iv) Convention of 1 February 1971 on the recognition and enforcement of foreign judgments in civil and commercial Matters, (v) Convention of 18 March 1970 on the taking of evidence abroad in civil or commercial matters, and (vi) Convention of 14 March 1978 on the Law Applicable to agency.

Civil Courts

The Supreme Court of Justice is the supreme court and has national jurisdiction over civil, criminal, commercial and labour disputes. The Supreme Court of Justice decides the appeals of the lower courts, knowing only matters of law.

The Courts of Appeal are second-degree civil courts whose jurisdiction extends to several districts. Appeal Courts rule on appeals of the decisions of the courts of first degree.

The courts of first degree decide civil, criminal, commercial and labour actions.

There are 23 courts of first degree in the national territory, which unfold in judgments of generic jurisdiction and specialized jurisdiction (civil centre, civil place, criminal centre, criminal place, place of small crime, criminal instruction, family and minors, work, trade and execution), depending on the matter and the value of the action.

Also included in the courts of extended territorial jurisdiction, which have specialized jurisdiction and are responsible for certain types of disputes: (i) the Courts of Execution of Penalties, (ii) the Maritime Court, located in Lisbon, (iii) the Intellectual Property Court, located in Lisbon, (iv) the Court of Competition, Regulation and Supervision, located in Santarém, and (v) the Central Court of Criminal Investigation, located in Lisbon. In the judicial system, there are also Justices of Peace, which are extrajudicial courts that adopt a simplified procedure aimed at a swift resolution of disputes.

The jurisdiction of Justices of Peace extends, especially to civil property issues whose value does not exceed €15,000.

TAX AND ADMINISTRATIVE COURTS

The resolution of issues arising from administrative and fiscal relations falls under the purview of the administrative jurisdiction.

The Administrative Courts of Circle and Tax Courts are the first-instance courts responsible for proceedings concerning administrative disputes between private individuals or companies and the State and other entities with administrative and public powers.

The Central Administrative Courts operate as the second-tier courts within the administrative jurisdiction. They have regional jurisdiction and are as follows: the Central Administrative Court South (located in Lisbon), the Central Administrative Court North (located in Porto), and the Central Administrative Court Centre (situated in Castelo Branco). Central Administrative Courts have jurisdiction to deal with the appeals of decisions of the administrative courts of the circle and the appeals of decisions of the tax courts. Exceptions are cases where, cumulatively, (i) the parties allege only questions of law, (ii) the value of the case is greater than the jurisdiction of the central administrative courts, and (iii) the amount of the loss is greater than half the jurisdiction of the court appealed against, in which case appeals against decisions on the merits handed down by Tax Courts fall within the jurisdiction of the Supreme Administrative Court.

The Supreme Administrative Court is the highest authority within the administrative and fiscal courts and is composed of two chambers: one for administrative litigation matters and the other for tax-related litigation.

POWERS OF THE COURTS

In general, courts have the power to issue decisions regarding any matter to be determined in the proceedings, which include the powers to order the payment of sums of money (in any currency), grant injunctions against the parties, order the performance of contractual obligations, order the rectification, setting aside or cancellation of deeds or other documents, declare divorces, order the division of assets caused by the death of her/his owner, etc.

Courts may also, following a request of an interested party or on their own accord:

• know exceptions that prevent the court from knowing the merits of the case or that consist of invoking facts that prevent, modify or extinguish the legal effect of the facts articulated by the author;
• declare protective orders;
• inspect things or persons in order to clarify any fact that is of interest to the decision of the case and may go to the place of the question or order reconstitution of the facts when it deems it necessary; or
• requiring a party to make an interim payment on account of the claim or to pay the costs of the process.

Judicial Procedure

6.1. THE CLAIM AND THE DEFENSE

Litigation begins when the plaintiff files a petition to the court (petição inicial), detailing what the defendant has done or failed to do that caused damage to the plaintiff, specifying the basis, factual and legal, for her/his claim against the defendant.

After being served with a plaintiff’s claim, the defendant has, in general, a 30-day deadline to respond to the plaintiff. The defence is always provided in writing in the form of a briefing addressed to the court (contestação).

6.2. THE PRELIMINARY HEARING

After the claim and defence are filed in court, the judge will schedule a «pre-trial» meeting to attempt a settlement between the parties and consider any delaying objections alleged and, if possible, the merits of the case.

If the settlement fails, the «pre-trial» meeting will serve to discuss the facts and matter of law of the case, where the judge may decide on procedural questions or immediately on the merits of the case, determine the terms of the dispute and schedule the final hearing.

6.3. THE TRIAL

The final hearing starts with the judge inviting the parties to settle their dispute. If the settlement fails, the final hearing continues with the submission of evidence, which may include the depositions of the parties, expert testimonies and the deposition of witnesses.

Within 30 days after the final hearing, the court will rule on the case.

6.4. CHALLENGING THE DECISION

Judgments of the courts may be appealed depending on the value and subject matter. Decisions in actions regarding the status of a person or in actions for allocation of the house of family dwelling are always subject to appeal.

Common reasons for challenging a court’s decision are errors in the interpretation or application of the law by the court or disregard of evidence.

Depending on the circumstances, the Court of Appeal will either confirm the ruling, reverse the ruling, or order the court of first instance to conduct a new trial.

After a ruling is given by the Court of Appeal, the parties may also appeal to the Supreme Court of Justice (recurso de revista), except in cases where the Court of Appeal confirms the decision of the Court of First Instance.

Court Fees

Judicial or procedural costs are generally equivalent to the amount spent by the public service of justice enforcement by the courts.

The Constitution of the Portuguese Republic guarantees access to the courts for all citizens, but this does not imply the gratuity of the justice services, only that the cost to pay is not so high that it considerably hinders access to justice. This does not mean, however, that the procedural costs correspond to or allow the actual costs of the proceedings to be covered.

Court costs must be paid for each legal action brought to court, the amount of which depends on the value of the case.

The ex-parte costs are the legal costs incurred by the winning party and which will be borne by the other party if the plaintiff so requests. The amounts must be itemised and contain all the essential elements relating to the proceedings and the parties.

For court cases worth more than €250,000, the cost of the case, including court fees and parties court awarded costs are approximately 1.8% of the claim value; appeals to the Court of Appeal and the Supreme Court of Justice cost another 1.8%, with the total cost of around 3.6% of the value of the claim value. If the first judicial decision is not confirmed by the appeal court(s), the unsuccessful party is responsible for all costs of the proceedings.

FOREWORD

Portuguese large electricity-consuming industries have long waited for the intensive electricity consumers’ benefits scheme (Estatuto do Cliente Eletro-Intensivo – “ECEI Rules”) established by Decree-Law No. 15/2022, the national electricity framework regulation enacted in January 2022.

Aimed at facilities with high, continuous, and predictable electricity consumption, the ECEI Rules are designed to tackle one of the main competitive challenges faced by Portuguese industry: the high cost of electricity. By lowering the final electricity prices and facilitating access to more competitive energy conditions, the ECEI Rules help align Portuguese energy costs with those of international competitors.

Key benefits of the ECEI Rules include:

• Reductions and exemptions from various charges related to the use of the national electricity grid;
• Compensation for indirect CO? costs;
• Exemption from proximity requirements between production units and self-consumption facilities.
• Access to a risk coverage mechanism that supports the execution of long-term renewable energy supply contracts.

In March 2022, Ministerial Order No. 112/2022 defined the eligibility criteria for adherence, as well as the obligations and support measures for consuming facilities covered by the ECEI Rules.

However, ECEI Rules becoming effective was contingent upon its approval by the European Commission under its State aid rules. Such approval was finally granted on 24 April 2025, thereby unlocking ECEI’s implementation.

In this new context, Ministerial Order No. 203-A/2025/1 firstly amended the ECEI Rules by adjusting the access requirements, the adhesion contract, and the respective framework of obligations and benefits.

With an annual allocation of at least 60 million euros intended for approximately 319 eligible companies, the ECEI Rules were established to be a strategic tool for the competitiveness of Portuguese industry.

Therefore, the right time has come to analyse the ECEI Rules highlighting their main implications for the Portuguese energy intensive industry.

THE BENEFITS FOR ENERGY-INTENSIVE CONSUMERS

PARTIAL REDUCTION OF COSTS

By joining the ECEI Rules, consuming installations can benefit from a partial reduction in the General Interest Costs applied to the electricity they purchase from the Portuguese Public Service Electricity Grid.

However, the resulting rate cannot fall below EUR 0.5/MWh.

• An 85% reduction of the cost applies if the installation belongs to a sector deemed to be at significant risk, as established in Annex I of the European Commission Communication 2022/C 80/01, concerning the “Guidelines on State Aid for Climate, Environmental Protection and Energy 2022”.
• A 75% reduction of the cost applies if the installation belongs to a sector at risk, pursuant to the same Annex. This reduction may be increased to 85% provided that the following cumulative requirements are met:

1. ≥ 50% of the installation’s electricity consumption originates from renewable sources; and cumulatively
2. ≥ 10% of the installation’s electricity consumption is secured through a forward contracting instrument or bilateral contract; or
3. ≥ 5% is guaranteed by self-consumption from renewable sources.

• To comply with the requirement to prove consumption from renewable sources, the corresponding guarantees of origin must be cancelled on behalf of the consuming installation.

TOTAL REDUCTION OF COSTS

 

 

Adherence to the ECEI Rules allows consumer installations to benefit, in the case of self-consumption, from:

• Full exemption from General Economic Interest Costs on the energy transmitted through the Portuguese Public Electricity Grid.
• Exemption from proximity criteria between the consumption installation and the self-consumption production unit.
• Total reduction of General Economic Interest Costs applied to the global system use tariff for the portion of self-consumed electricity from a production unit for self-consumption, when transmitted through the Portuguese Public Electricity Grid.
• Exemption from the proximity criteria between production unit for self-consumption and the location of consumption installations, which is a requirement for carrying out self-consumption production activity:

1. 4 km for medium-voltage connections
2. 10 km for high-voltage connections; and
3. 20 km for extra-high voltage connections.

If the connection occurs at the same substation, there is no distance limitation.

RISK COVERAGE MECHANISM

The risk coverage mechanism for medium and long-term renewable electricity purchases is a financial instrument aimed at:

• Shielding energy intensive consumers from electricity price volatility; and
• Encouraging renewable energy use by involving financial institutions that provide guarantees. These guarantees cover part of the contractual obligations, making it easier to enter into medium- and long-term power purchase agreements (PPAs) for renewable electricity.
• Access to a risk coverage mechanism related to the payment of the purchase price for renewable electricity on a medium and long-term basis through long-term bilateral contracts, subject to the following requirements:

1. A minimum contract duration of five years; and
2. Coverage of at least 10% of the consumer’s annual electricity consumption.

The risk coverage is provided by Mutual Guarantee Societies (“SGM”), which are supported by a counter-guarantee issued by Banco Português de Fomento, S.A., acting as the managing entity of the Mutual Counter-Guarantee Fund.

• The SGM guarantee coverage for the risk of non-payment of the agreed contract price, limited to the actual loss suffered.
• Banco Português de Fomento, S.A. assumes the liabilities arising from the obligations guaranteed by the SGM, up to a maximum of 80%.

ADHERING TO THE ENERGY-INTENSIVE CONSUMER RULES

ELIGIBITY REQUIREMENTS FOR STANDARD ADHESION

To be eligible for the ECEI Rules, a consumption facility must meet the following requirements.

• Be part of one of the sectors of activity identified in Annex I of the European Commission Communication 2022/C 80/01.
• Be connected to the Medium-Voltage, High-Voltage, or Extra-High-Voltage Electricity Grid
• Comply with the requirements established under the System for Greenhouse Gas Emission Allowance Trading or the Intensive Energy Consumption Management System, if applicable
• Meet the following requirements in at least two of the last three years.

1. Annual consumption ≥ 1 GWh, including self-consumption and system services.
2. ≥ 40% of the annual consumption during normal off-peak and super off-peak periods, net of energy from self-consumption and system services.
3.  Intensity level ≥ 1 kWh/€ of gross added value.

THE APPLICATION FOR STANDARD ADHESION

The application to benefit of the ECEI Rules must be addressed to DGEG with a set of documents and information, including:

• Identification of the applicant, the consumption facility, the sector or subsector, and the facility’s activity code;
• Copy of electricity supply contract established at the organized market, either through bilateral agreement or via a supplier in the free market;
• When applicable, evidence that the consumption facility complies with requirements of:

1. System for Greenhouse Gas Emission Allowance Trading; and
2. Intensive Energy Consumption Management System.

• Declaration of electricity consumption and proof of electricity from self-consumption and system services for the past three years;

1. If the consumer has no historical data, it may be estimated proportionally to the annual consumption.

• Audited certificate of the annual gross added value of the consumption facility for the past three years;
• Declaration confirming that it does not qualify as an “Undertaking in Difficulty” as defined by EU Regulation 2014/C 249;
• Declaration confirming that the company is not subject to any pending recovery order following state aid granted under a European Commission decision;
• Declaration that no state aid has been received for the same eligible costs or that such aid does not exceed the legal limits.

ELIGIBILITY REQUIREMENTS FOR CONDITIONAL ADHESION

Electricity consumers with consumption facilities in operation for less than three years may apply for conditional adherence to the ECEI Rules in the calendar year prior to the year in which the application is processed.

Obligation of the Energy Intensive Consumer

• The consumer is required to meet the eligibility requirements in at least two of the three years following the application for adherence.

Compliance Assessment

• Compliance will be evaluated based on actual or estimated data.

Application

• The application for conditional adhesion must contain the same documents required for standard adhesion

THE ADHESION AGREEMENT

TERMINATION OF THE ADHESION AGREEMENT

The power to terminate the adhesion agreement to the ECEI Rules falls under the authority of the Director-General of DGEG. Termination leads to the following consequences:

• Cessation of all support measures granted under the ECEI Rules; and
• Reimbursement of unpaid General Interest Costs (CIEG) during the term of the agreement. This reimbursement must be made by July 1st of the year in which the breach was identified.

The adhesion agreement shall be terminated in the following cases:

• Voluntary withdrawal;
• Cessation of activity;
• Subsequent non-compliance with eligibility requirements;
• Failure to notify changes to the agreement conditions;
• Submission of false information or the intentional provision of false statements for the purposes of entering into, renewing, or converting the adhesion agreement; and
• Facilities benefiting from the ECEI Rules must submit to DGEG, by April 30 of each calendar year during the term of the agreement — including the calendar year following its expiry — evidence of continued compliance with the eligibility requirements, by providing the relevant supporting documentation.

THE OBLIGATIONS OF ENERGY-INTENSIVE CONSUMERS

ENERGY AUDITS AND ENERGY MANAGEMENT SYSTEMS

The new ECEI Rules aim to ensure transparency and accountability in the use of public benefits, while simultaneously promoting continuous improvement in the energy performance of facilities and the adoption of sustainable and efficient practices within the energy-intensive sector.

Facilities that benefit from the ECEI Rules and are not part of the Energy Consumption Management System must carry out an energy audit by certified professionals by the end of the first calendar year of the agreement.

For conditional adhesion agreements, the audit must be done by the end of the second calendar year after the year the facility started operating.

In addition, they must carry out at least one of the following actions:

• Implement all energy efficiency measures identified in the energy audit report that have a payback period of 3 years or less;
• Invest at least 50% of the support received in projects that reduce greenhouse gas emissions at the facility; or
• Ensure that at least 30% of their electricity consumption comes from renewable sources, through self-consumption, guarantees of origin, bilateral contracts, or other equivalent mechanisms.

FINAL IMPLEMENTATION REPORT

The energy intensive consumers must submit a Final Implementation Report by April 30 of the calendar year following the term of the adhesion agreement to ECEI Rules.

The Final Implementation Report must include:

• An analysis of the evolution of eligibility requirements;
• The energy audit report;
• Proof of compliance with at least one of the mandatory actions (energy efficiency, emissions reduction, or use of renewable energy);
• Evidence of the installation and operation of monitoring, recording, and control systems;
• Proof of installation, certification, and audit of the energy management system.

TRANSITIONAL RULES - ADAPTATION OF ADHESION AGREEMENTS CURRENTLY IN FORCE

TRANSITIONAL RULES

The adhesion agreements to the ECEI prior to the new ECEI Rules did not benefit from the cost-reduction measures and the risk-coverage mechanism, as these only came into effect following the European Commission’s approval under State aid rules on 24 April 2025.

Electricity consumers with valid agreements for the year 2025 are required to align their contracts with the newly established rules to benefit from the cost-reduction measures and risk coverage mechanism.
According to Explanatory Note No. 2/DG/2025 of DGEG, electricity consumers had the opportunity of filing a conversion request at DGEG through the Energy Intensive Consumer Portal by May 31, 2025.

To avoid termination of their ECEI status, those who failed to submit the conversion request can still file a renewal request until June 15, 2025, following the adhesion process described above in this paper.

The purpose of this briefing is to review the various government incentives available in Portugal, which include grants under Portugal 2030 and the «Recovery and Resilience Plan» (Plano de Resiliência e Recuperação, PRR), both backed by the European Union, and incentives under the tax code that are currently accessible to both international and local investors.

Other information concerning Portugal, such as the setting of a business, employment, taxation, intellectual property protection, real estate, and the judicial system can be found at www.macedovitorino.com/en/Why-Portugal.

OVERVIEW

The government plans to invest in 85 infrastructure projects, with €22,200 million in the transportation sector, mainly in upgrading or building new railroads and subway infrastructure, €13,060 million in renewable energy, and €7,418 million in environment-related investments. In 2023, new public funds totalling 400 million euros were established, mostly to invest in start-ups.

Government incentive mechanisms include financial incentives, repayable or non-refundable, tax benefits and co-financing. Exceptional subsidies may also be granted, such as reimbursement of employers’ costs with the training of employees.

The following are the main incentive schemes now available to national and foreign investors:

• Incentives granted under the «Portugal 2030» programme covering the period from 2021 to 2027;
• Incentives granted under the «Recovery and Resilience Plan» (Plano de Resiliência e Recuperação, PRR) that extend from 2021 to 2026;
• Tax incentives granted under the Tax Investment Code (Código Fiscal do Investimento); and
• Incentive programmes designed for specific situations, such as creating jobs, which may include temporary reductions of the employer’s social security contributions, financial support for hiring young people, unemployed, etc. and co-funding of training costs.

PORTUGAL 2030

«Portugal 2030» is an investment program amounting to 23 billion euros, which implements the Partnership Agreement signed between Portugal and the EU on 14 July 2022.
The main goals of this program are as follows:

• To improve innovation, technological development, and competitiveness in Portugal;
• To address the goals outlined in the Paris Agreement by investing in the green transition, renewable energy, and the fight against climate change and global warming;
• To enhance the public transportation network;
• To promote better education, employment, social inclusion, and equality in access to public healthcare; and
• To implement development strategies with local governments and create "green" cities.

These goals align with the four agendas of the 2030 Strategy:

• People First: Aiming for a better demographic balance, greater inclusion, and reduced inequality;
• Digitalization, innovation, and qualification;
• Climate transition and sustainability of resources; and
• Enhancing Portugal's international competitiveness and promoting social cohesion.

«Portugal 2030» is structured into twelve programs, which were approved in December 2022:

• Five regional programs corresponding to Intercity Communities and Metropolitan Areas (NUTS II), including separate ones for the Azores and Madeira;
• Four programs covering demographics, skills and inclusion, innovation and digital transition, climate action and sustainability, and the sea; and
• Programs for European Territorial Cooperation.

The aim of Portugal 2030 is to achieve measurable results. For a project to be approved, beneficiaries must commit to financial execution and achieve the agreed-upon results. Progress is subject to audits and monitoring.

As of mid-2024, Portugal 2030 allocated 35.7% of its available funds, approving 2,092 projects and issuing 554 calls for proposals. By 31 July, €8,209 billion out of a total €22,995 billion had been either awarded or were pending tenders. The program funding sources include the European Regional Development Fund (ERDF) with 42%, the European Social Fund+ (ESF+) with 37%, and the Cohesion Fund with 17%. To date, 255 tenders have been closed, releasing over €4 billion in funding. 2,092 projects have been approved, with €2,381 billion in funds awarded and €715 million already executed. By the end of July 2024, Portugal 2030 had issued 554 calls for proposals, with €8,209 billion available for public tenders.

From September to December 2024, the release of 249 funding calls is planned, with a total budget of €2.6 billion. The announced priorities include calls focused on the Business Research, Development, and Innovation System (RDI), the expansion of the Porto metro, and funding for Professional Training Programs, among others.

You may learn more about Portugal 2030 at www.Portugal2030.pt.

RECOVERY AND RESILIENCE PLAN (PRR)

The «Recovery and Resilience Plan» is a program approved by the European Commission for implementation in Portugal. It aims to restore sustainable economic growth and strengthen European convergence over the next decade. The PRR is funded by the European Union's "NextGenerationEU" initiative, with a total investment of €16,644 million covering the period from 2021 to 2026: €13,944 million in grants (84% of the total) and €2,700 million in loans (16%).

The main objectives of the PRR are:

• Resilience (61% of the PRR): This portion will be used to enhance economic recovery and improve the capacity to respond to future crises and challenges. It focuses on social, economic, and productive sectors and territorial resilience.
• Climate transition (21% of the PRR): This part aims to promote more sustainable resource use, boost renewable energy production, and support the decarbonization of the economy and society.
• Digital transition (18% of the PRR): This portion focuses on promoting digital inclusion through education and training in digital skills and facilitating the digital transformation of businesses and government operations.

These three key areas are implemented through 20 components, 37 reforms, and 83 investments, using a result-oriented approach based on milestones and targets.

Applications for PRR grants and loans are submitted via an online platform called "Recuperar Portugal," which simplifies the process. Implementing PRR measures or investments will be formalized through contracts between the Mission Unit "Recuperar Portugal" and direct or intermediary beneficiaries.

PIN PROJECTS

The Project Recognition and Monitoring System is a monitoring mechanism for projects recognised as having potential national interest (Potencial Interesse Nacional, PIN).

The PIN recognition system does not constitute a fund allocation program per se but a monitoring program for the applications and execution of the investment projects that benefit from or are intended to benefit from the incentives.

For projects to be recognised as PIN’s, they must meet the following cumulative requirements:

• Represent an overall investment of €25 million or more;
• Create 50 or more direct jobs; and
• Be presented by reputable and reliable sponsors.

Exceptionally, projects that meet two of the following criteria may be recognised as PIN, even if they do not meet the first two requirements described above:

• Internal Research and Development (R&D) activity of at least 10% of the company's turnover;
• A significant part of the company’s business is related to its patents;
• Demonstrable interest in environmental compliance: this may be made by the adoption of internal measures to reduce its carbon footprint or other environmental burdens, the production of recyclable/green products, etc.;
• The company must have a minimum of 50% of its turnover originated from international markets; or
• Production of outstanding tradable goods and services.

To operationalise this system, the government created a support commission for investors (Comissão Permanente de Apoio ao Investidor, CPAI).

The project developer must file an application that fulfils the requirements for PIN recognition according to a model previously approved by the CPAI.

The recognition of the project as a PIN must take place in a maximum of 30 days, counting from the reception date of the application.

A process manager responsible for monitoring the administrative procedures is assigned for the projects recognised as PIN.

When a project is recognised as a PIN it will have a priority in the licensing procedures. PIN projects also benefit from a special administrative procedure, which involves:

• Simultaneous processing of the central government’s administrative procedures;
• Reduction and simultaneous completion of the internal procedures determined by the administrative authorities that are responsible for issuing the necessary licenses;
• A single period to consult the relevant administrative procedures;
• Simplification of the procedures related to the zoning plan instruments relevant to the project;
• Tacit positive reports and tacit deferral under the various applicable procedures; and
• Simplification of procedures to obtain construction permits.

TAX INVESTMENT CODE

The investment projects that engage in certain activities may, until 31 December 2027, benefit from tax incentives for up to ten years starting from the completion of the investment project, provided that the amount invested is equal to or greater than €3 million. Such projects regard, among others, (i) extractive and manufacturing industry activities, (ii) tourism, (iii) agricultural and forestry activities, (iv) defence, environment and energy, or (v) research activities.

The tax benefits may include:

• Tax credits;
• Reduction of or exemption from real estate taxes, such as IMI (Imposto Municipal sobre Imóveis), during the term of the agreement, regarding the buildings used by the project developer when executing the project; and
• Exemption from stamp duty regarding all acts or contracts required to carry out the project.

In addition to these tax benefits, municipalities may grant total or partial exemptions from IMI or IMT (Imposto Municipal sobre as Transmissões Onerosas de Imóveis) for specific investments made in the Municipality.

Projects that demonstrate technical, economic, and financial viability, provide for the creation or maintenance of jobs, and meet at least one of the following conditions may qualify for contractually defined fiscal benefits granted to productive investments:

• Contribute to the strategic development of the national economy;
• Significantly reduce regional disparities; and
• Promote technological innovation, advance national scientific research, enhance environmental sustainability, or improve competitiveness and productivity.

To access these benefits, the investor must submit an electronic application to one of the State investment agencies, AICEP or IAPMEI.

Investment incentives may be revoked under the following circumstances:

• If the project developer fails to meet contractually defined obligations;
• If the project developer does not comply with tax obligations; or
• If the project developer provides false information or presents manipulated data during project presentation, evaluation, or monitoring.

If the contract is terminated, the project will lose its tax benefits, and the developer will be required to repay the uncollected tax revenue plus interest.

Tax incentives for business research and development (R&D) may also be granted. Corporate income tax taxpayers residing in Portugal who engage in agricultural, industrial, commercial, or service activities, or non-residents with a permanent establishment in Portugal, can deduct R&D expenses from their corporate income tax, provided these expenses are not co-funded by the State through non-refundable grants. These deductions apply to taxation periods between 1 January 2014 and 31 December 2025.

To qualify for these tax deductions, investors must meet the following conditions:

• The taxable profit must not be determined by indirect methods; and
• The applicant must not have any outstanding tax liabilities or unpaid Social Security contributions.

Investment incentives may take one of the following forms:

• A contract between the State and the investor, known as contractual incentives;
• Autonomous incentives, which apply to specific protected situations; or
• Incentives granted through State-funded programs.

ABOUT PORTUGAL

TERRITORY, POPULATION AND LANGUAGE

Portugal is situated on the southwest coast of Europe, bordering only with Spain. With a territory of 92,152 Km2, Portugal has the largest maritime zone in Europe. Its continental platform borders the American platform.

Portugal has an 800-year history, and its European borders have been established for over 500 years. Because of this, the country has a homogeneous population, sharing similar values despite slight regional differences.

Portuguese is the sixth most spoken language in the world, spoken by 270 million people in Portugal, Brazil, Angola, Cape Verde, Mozambique, Guinea Bissau, São Tomé and Príncipe and Timor.

POLITICAL SYSTEM

Portugal is a parliamentary republic. The legislative power lies with a national parliament (Assembleia da República), with 230 seats. The members of parliament are elected by universal vote for four-year terms.

The Government depends on the parliament’s support, which has the power to overthrow it. The cabinet of ministers is led by a Prime Minister, who holds the executive power.
The President of the Republic has limited powers but has the power to influence the Parliament’s and the Government’s decisions and dissolve the Parliament in extraordinary circumstances.

INTERNATIONAL RELATIONS

Portugal has been a member of the EU since 1986, a founding member of the Euro and the Portuguese-speaking Countries Community (Comunidade dos Países de Língua Portuguesa, CPLP), which groups all Portuguese-speaking countries. Portugal is a member of the United Nations, NATO and the OECD.

CURRENCY AND BANKING SYSTEM

Portugal is one of the founding members of the «Euro», the currency of 20 European countries. The Euro is the second most traded currency in the World after the US Dollar. The currency symbol is «€». The Euro circulates with seven banknotes and eight different coins: banknotes of 500, 200, 100, 50, 20, 10, and five euros, and coins of two and one euro and 50, 20, 10, five, two and one cent.

The Bank of Portugal (Banco de Portugal, BdP) is the central monetary authority that oversees the banking system and is a member of the European System of Central Banks (ESCB).

Key Provisions of the “Stop-the-Clock” Directive

CSRD Delays

The CSRD mandates sustainability reporting for a wide range of companies, categorized into waves based on size and listing status.

The “Stop-the-Clock” Directive introduces the following modifications:

• Wave 1 Companies: No delays apply. Wave 1 companies (large public-interest entities with over 500 employees) must report in 2025 for the 2024 financial year.
• Wave 2 Companies: Large undertakings (non-public interest entities with over 250 employees, €50 million turnover, or €25 million in assets) originally required to report in 2026 for the 2025 financial year will now report in 2028 for the 2027 financial year.
• Wave 3 Companies: Listed small and medium-sized enterprises (SMEs), small and non-complex credit institutions, and captive insurance entities, initially due to report in 2027 for the 2026 financial year, will now report in 2029 for the 2028 financial year.
• Wave 4 Companies: No delays apply. Wave 4 (certain non-EU undertakings) must report in 2029 for the 2028 financial year.

CSDDD Delays

The CSDDD imposes due diligence obligations to address human rights and environmental impacts in corporate value chains.

The directive delays:

• Transposition Deadline: Member States now have until July 26, 2027, instead of 2026, to transpose the CSDDD into national law.
• First Phase Application: The largest companies (EU companies with over 5,000 employees and €1.5 billion turnover, or non-EU companies with equivalent EU turnover) will comply from July 26, 2028, instead of July 2027. Second-wave companies (EU companies with over 3,000 employees and €900 million turnover) maintain their original compliance deadline of July 26, 2028.

Entry into force and transposition

The “Stop-the-Clock Directive” entered into force on April 17, 2025, the day after its publication in the Official Journal. EU Member States must transpose it into national law by December 31, 2025, ensuring alignment with the delayed timelines.

CSRD Wave companies

The CSRD categorizes companies into different “waves” based on their size, listing status, and other criteria, determining when they must start complying with sustainability reporting requirements using the European Sustainability Reporting Standards (ESRS). Below is a clear distinction between Wave 1, Wave 2, Wave 3, and Wave 4 companies.

Wave 1: Large Public-Interest Entities (PIEs)

Definition:

• Companies classified as public-interest entities (e.g., listed companies, credit institutions, insurance companies) with more than 500 employees.
• Includes entities already subject to the Non-Financial Reporting Directive (NFRD).

Scope:

• Large EU companies or groups meeting the PIE criteria.

Key Obligations:

• Prepare sustainability reports per ESRS, including double materiality assessments, covering environmental, social, and governance data.

• Reports must be included in the management report and digitally tagged for inclusion in the European Single Access Point (ESAP).

Wave 2: Other Large Undertakings

Definition: large companies (or parent companies of large groups) that are not public-interest entities and meet at least two of the following criteria:

• More than 250 employees (average over the financial year).
• €50 million net turnover.
• €25 million total assets.

Scope: Non-listed large companies, including subsidiaries of non-EU companies meeting the thresholds.

Key Obligations: same ESRS reporting requirements as Wave 1, but with additional time to prepare data collection systems and processes due to the delay.

Wave 3: Listed SMEs and Other Small Entities

Definition:

• Listed small and medium-sized enterprises (SMEs) on EU-regulated markets, excluding micro-undertakings (fewer than 10 employees and €0.7 million turnover or €0.35 million assets).
• Small and non-complex credit institutions (as defined by EU banking regulations).
• Captive insurance undertakings (insurance entities serving a parent group).

Scope:

• Smaller listed entities subject to lighter, proportionate ESRS requirements (simplified SME standards).
• Option to opt out of reporting until 2028 (originally 2026), with a statement explaining the decision.

Key Obligations:

• Use simplified ESRS tailored for SMEs, with reduced disclosure requirements.
• Prepare for potential stakeholder pressure to report voluntarily despite the delay.

Wave 4: Non-EU Undertakings

Definition: Non-EU companies with major EU operations, defined as:

• Generating €150 million annual net turnover in the EU for each of the last two financial years, and
• Having at least one EU subsidiary (large or listed SME) or a branch with €40 million net turnover in the EU.

Scope: Non-EU parent companies reporting at a consolidated group level through an EU subsidiary or branch.

Key Obligations:

• Report sustainability information for the entire group using ESRS or equivalent standards (if accepted by the EU).
• Ensure EU subsidiaries or branches are equipped to handle group-level

IMPACT ON BUSINESSES

Immediate Relief for Wave 2 and Wave 3 Companies

Companies in Wave 2 and Wave 3 benefit from a two-year reprieve, allowing additional time to prepare for CSRD compliance.

This is particularly advantageous for companies that were in the early stages of developing reporting frameworks, as it reduces immediate compliance costs and resource allocation. However, companies advanced in their preparations may choose to voluntarily report to maintain stakeholder trust and competitive positioning.

Extended Preparation for CSDDD Compliance

The one-year delay in CSDDD transposition and application provides large companies with extra time to establish due diligence processes, particularly for complex global supply chains. This delay mitigates the risk of rushed implementation, which could lead to non-compliance or inefficiencies.

Ongoing Obligations for Wave 1 and Non-EU Firms

Wave 1 companies and non-EU undertakings (Wave 4) face unchanged timelines, requiring immediate focus on compliance. For Wave 1, this means finalizing 2024 sustainability reports for 2025 submission. Non-EU companies must prepare for 2028 reporting, ensuring EU subsidiaries are equipped to handle group-level disclosures.

Uncertainty Pending Substantive Amendments

 The “Stop-the-Clock” Directive is a temporary measure, with substantive changes to the CSRD and CSDDD proposed in the Omnibus I Package’s “Content Directive.”

These changes, potentially reducing the scope of reporting companies by 80% and simplifying European Sustainability Reporting Standards (ESRS), are under negotiation, with a possible vote by July or October 2025. This creates uncertainty, as some companies currently in scope may be excluded, affecting long-term compliance strategies.

STRATEGIC RECOMMENDATIONS

1. Assess Your Company’s Status

• Determine Your Wave: Confirm whether your company falls under Wave 1, 2, 3, or 4 of the CSRD, and assess CSDDD applicability based on employee count and turnover thresholds.
• Evaluate Preparation Stage: Review existing sustainability reporting and due diligence frameworks to gauge readiness and identify gaps.

2. Leverage the Delay Strategically

• Wave 2 and Wave 3 Companies: Use the two-year delay to refine data collection systems, train staff, and align with ESRS requirements. Consider voluntary reporting to enhance transparency and stakeholder engagement.
• CSDDD First-Wave Companies: Develop robust due diligence processes, focusing on high-risk supply chain areas, to ensure compliance by July 2028.
• Wave 1 and Wave 4 Companies: Prioritize immediate compliance, ensuring 2024 reports (Wave 1) or 2028 preparations (Wave 4) meet current standards.

 3. Monitor Ongoing Legislative Developments

• Monitor Ongoing Legislative Developments
• Track Content Directive Negotiations: Stay informed on the Omnibus I Package’s substantive amendments, as changes to company thresholds or ESRS data points could alter compliance obligations.
• Engage with EFRAG Updates: The European Financial Reporting Advisory Group (EFRAG) is revising ESRS by October 31, 2025. Monitor these revisions to anticipate simplified reporting requirements.

4. Mitigate Risks Avoid Over-Reliance on Delays

• Continue compliance preparations, as national laws may vary, and some Member States may enforce stricter timelines.
• Consult ESG Legal Experts: Engage professionals to navigate the evolving regulatory landscape and ensure alignment with both current and proposed rules.

Conclusion: Turn Delay Into Advantage

The “Stop-the-Clock” Directive offers significant relief for many EU and non-EU companies by delaying CSRD and CSDDD obligations, providing breathing room to adapt to complex sustainability requirements.

The "Stop-the-Clock" Directive marks a significant moment in the EU’s journey toward sustainable governance, reflecting a pragmatic approach to balancing ambitious environmental and social goals with the practical realities faced by businesses operating in a competitive global market.

By granting a temporary reprieve from certain CSRD and CSDDD obligations, this directive not only alleviates immediate pressures but also underscores the EU’s responsiveness to stakeholder concerns, fostering a regulatory environment that prioritizes both sustainability and economic resilience.

However, unchanged timelines for Wave 1 and Wave 4 companies and the potential for substantive changes in the Omnibus I Package necessitate proactive planning.

By assessing their company’s status, leveraging the delay strategically, and staying informed on legislative developments, businesses can ensure compliance, strengthen resilience, and gain a lasting competitive edge in a rapidly evolving regulatory landscape.

 

The companies in the Portuguese Public Business Sector (''SBS'') are subject to a set of specific legal provisions that apply to them, based on their nature.

Although some of them are subject to certain specific provisions, which do not apply to all, the majority are subject to a set of labour regulations that impact their daily operations, particularly in relation to the following topics:

1. Hiring of employees.
2. Remuneration adjustments.
3. Replacement of employees.
4. Labour regime applicable to employees.
5. Regime applicable to subsistence and travel allowances, as well as remuneration for overtime work.
6. Public interest secondment or assignment (?).
7. Commission of service; and
8. Management contracts.

Firstly, it is essential to consider their compliance with the State Budget Law (“SBL”) and the State Budget Execution Decree-Law (“SBDL”), given their objectives of advancing the public interest and ensuring the proper management of public funds. Accordingly, companies should review and update themselves annually on the provisions of these legislative acts.

Therefore, consideration must be given to their compliance with the SBL and the SBEDL in view of their objectives related to the pursuit of the public interest and the effective management of public resources. Consequently, each year, the companies are required to consult and remain informed about the provisions of each of these regulations.

Currently, Law No. 45-A/2024 of 31 December (“SBL 2025”) and Decree-Law No. 13-A/2025 of 10 March, which sets out the rules for the execution of the State Budget for 2025 (“SBDL 2025”), are in force.

Considering their legal nature, companies within the Public Business Sector (“PBS”) are also subject to the legal Regime of the Public Business Sector (“RPBS”), as established by Decree-Law No. 133/2013 of 3 October, in its current version, as well as Decree-Law No. 71/2007 of 27 March, which enacted the Public Manager Statute (“PMS”).

In this Study, we present the main labour regulations currently in force, which does not exempt the consultation of the relevant statutes.

1. HIRING OF EMPLOYEES

Regarding the hiring of employees, it is important to consider the provisions of Article 43 of the SBL 2025 and Article 138 of the SBEDL 2025, with particular emphasis on the following points:

(i) The recruitment of new employees, whether on a fixed-term or indefinite-term, as well the conversion f fixed-term contracts into indefinite-term contracts, may only be carried out with express authorization of the act in the activity and budget plan.

(ii) The conclusion of public interest assignment agreements with employees from entities covered by the scope of the General Labour Law in Public Functions can only be done with express authorization in the activity plan and budget.

(iii) The acts can only be carried out if they are provided for in the activity plan and budget, including a cost-benefit analysis.

(iv) At the time of recruitment, the following requirements must be met:

• The annual and multi-annual budget proposal must include the costs arising from recruitment, showing the impact in the year of hiring and the respective three-year period, identifying the remuneration amount of the employees to be hired, with reference to the base of the respective career and professional category provided for in a collective labour regulation instrument or internal regulation, which must ensure the absence of discriminatory practices in terms of remuneration;
• The existence of budget allocation for staff expenses.
• Recruitment must be considered essential, with a view to pursuing the responsibilities and fulfilling the public service obligations of the respective entity.
• Full and punctual compliance with the information duties set forth in Law No. 104/2019, of 6 September; and
• Compliance with all other applicable legal requirements.

(v) Proof of compliance with the above-mentioned requirements must be submitted to PBSIS – Public Business Sector Information System.

(vi)Any other recruitment situations must be authorized by the member of the Portuguese Government responsible for the area of finance, following a favourable dispatch from the member of the Government responsible for the respective sectoral area.

(vii) The situations referred to in the previous point should only be requested following a cost-benefit analysis and based on the existence of relevant public interest, considering the shortage of human resources and their overall evolution, as well as the Annual Operations Plan (“AOP”) being approved or submitted for approval in accordance with the issued instructions and having already been subject to a favourable opinion from the supervisory body.

(viii) Recruitment processes initiated in 2024, and related to recruitment authorizations of 2024, must remain in progress if it is intended that such authorizations remain valid.

2. REMUNERATION INCREASES

With respect to remuneration increases, it is important to highlight the framework established in Article 132 of the SBDL 2025, which states that:

(i) The mechanisms for valuing employee’s remuneration and developing careers must be included in instruments that provide mechanisms for valuing employee’s remuneration and developing careers.

(ii) The mechanisms referred to in (i) must be based on predefined objective criteria for performance evaluation, ensuring differentiation based on merit.

(iii) The outcome result of implementing the valuing mechanisms must be reflected in quarterly reports, grounded in, and demonstrating the degree of achievement of the objectives set out in the activity and budget plan, which should include the investment plan and its respective sources of financing.

(iv) The quarterly reports must specify the level of execution of the company, as well as the financial operations contracted.

(v) The execution of any act or legal transaction that results in actual or contingent financial liabilities for the company exceeding the annual budget, or that does not arise from the investment plan approved by the shareholder function holder, can only be carried out upon request and obtaining authorization from the shareholder function holder for its execution.

Additionally, under Article 133 of the SBDL 2025, the following points regarding “other remuneration adjustment”' are highlighted:

(i) Adjustment in remuneration positioning made by managerial discretion can only be done for up to 5% of the total workforce and up to the limit of one remuneration position.

(ii) The awarding of performance bonuses can only be done up to the amount equivalent to the employees monthly base remuneration, or up to that amount if the maximum set charges for that universe are not sufficient.

(iii) The adjustments referred to in points (i) and (ii) can only comply with the legally stipulated requirements and in accordance with the budgetary allocations provided for this purpose and within the initially approved appropriation.

3. CONTROL OF OPERATION EXPENSES

Regarding the control of operational expenses that must be considered by companies in the Public Business Sector, Article 52 of the SBL 2025 and Article 140 of the SBDL 2025 are particularly relevant,
The following points are highlighted:

(i) The definition of a policy for optimizing operational expenses must promote budgetary balance.

(ii) The ratio of operational expenses to turnover, excluding any extraordinary impact arising from compliance with legal provisions, must be properly substantiated and not exceed the ratio observed in 2024.

(iii) Operational expenses must be equal to or less than the amount recorded in 2024. For personnel expenses, those related to social bodies must be excluded, corrected for the impacts of compliance with legal provisions, explicit guidelines from the Public shareholder regarding the implementation of the tripartite agreement 2025-2028 on remuneration enhancement and economic growth, signed on October 1, 2024, mandatory remuneration improvements as stipulated in the State Budget Law, as well as the effect of absenteeism and severance payments, except in cases of mutual agreement terminations.

4. REPLACEMENT OF EMPLOYEES

The companies in the Public Business Sector must, in relation to the replacement of employees, consider the provisions of Article 139 of the SBDL 2025 and act in accordance with the following:

(i) The conclusion of permanent employment contracts/public interest assignment agreements with employees from entities covered by the scope of the General Law on Public Employment (“GLPE”), for replacement, for the same or a different function identified as a priority, of employees who terminate their employment relationship and perform tasks corresponding to permanent needs, must be properly justified. Regarding the remuneration of the employee to be hired, it must comply with the following requirements:

• To correspond to the base remuneration of the respective career and professional category as outlined in the applicable collective labour agreement or internal regulations, or, in the absence of an applicable career regulation, to correspond to the lowest base remuneration previously paid within the company for the performance of the same professional category; or
• Represent an annualized cost equal to or less than the annualized cost of the replaced employee.

(ii) The conclusion of the contracts/agreements referred to in the previous point falls within the competence of the highest management body of the Public Business Sector Company.

(iii) The Conclusion of fixed-term employment contracts or public interest assignment agreements with employees covered by the scope of the GLPE, for replacement, for the same function, of employees who suspend their employment relationship must correspond to a duration limited to the maximum duration of the suspension of the employment relationship of the employee to be replaced, and with respect to the remuneration of the employee, it must:

• Correspond to the base remuneration of the respective career and professional category as provided in the instrument of collective labour regulation or internal regulations, or, when there is no applicable career regulation exists, correspond to the lowest base remuneration previously paid in the company for the same professional category; or
• Represent an annualized cost equal to or less than the annualized cost of the replaced employee.

(iv) The conclusion of fixed-term employment contracts for the replacement of employees holding permanent contracts, for the same function, who are absent, namely due to illness or parental leave, falls within the competence of the highest management body of the company, and the remuneration of the employees must:

• Correspond to the base of the respective career and professional category provided for in a collective labour regulation instrument or internal regulation, or, when there is no applicable career regulation, correspond to the lowest base remuneration that was being paid in the company for the exercise of the same professional category; or
• Represent an annualized cost equal to or less than the annualized cost of the replaced employee.

(v) The replacement of employees must not result in an increase in the overall staffing level of the company, nor in personnel expenses compared to the previous year, and must be fulfilled at the time of recruitment.

(vi) The conclusion of employment contracts for replacement must be communicated to the Directorate-General for Treasury and Finance (“DGTF”), through PBSIS or Human and Financial Resources Information System (“HFRIS”), as applicable, within a maximum period of 10 working days from the effective date of the respective contract.

(vii) Any early recruitment for the replacement of employees who cease functions in the year to which the AOP refers must comply with the limit of 5% of the number of employees in the category, rounded up, provided it is foreseen in the human resources planning that is part of the AOP.

5. LABOUR RULES

Regarding the rules to be applied to employees, particularly concerning meal allowances, travel expenses, night-time work, and overtime work, it is important to refer to Articles 17 and 18 of the GLPE, the following should be highlighted:
(i) Application of the individual employment contract regime.

(ii) Application of the regime provided for public sector employees concerning the meal allowance

(iii) Application of the regime provided for public sector employees concerning travel allowances and transportation for travel within Portuguese territory and abroad, due to holders of administrative or management bodies.

(iv) Application to employees of the regime provided for the remuneration of overtime work performed by public sector employees, in accordance with the Regime of Public Employment Contracts, approved by Law No. 59/2008, of September 11.

(v) Application to employees of the regime provided for the remuneration of night-time work performed by public sector employees, in accordance with the Regime of Public Employment Contracts, approved by Law No. 59/2008, of September 11.

(vi) The entering into of public interest assignments with employees holding a public employment relationship must be carried out in accordance with the terms of the Law on Employment Relationships, Careers, and Remuneration, approved by Law No. 12-A/2008, of February 27, as set forth in Article 19 of the Regime of the Public Business Sector (“RPBS”).

Regarding the execution of any service commissions, it is important to note that, under Article 20 of the RPBS, they must be carried out:

(i) In respect of the rights inherent to the professional status of employees in the company, including retirement and survivor benefits, considering the entire period of the commission as service provided to the original company.

(ii) Ensuring that the employees covered by the point can opt for their original base remuneration.

6. OTHER OBLIGATIONS ARISING FROM THE REGIME OF THE PUBLIC BUSINESS SECTOR

Under the terms of articles 24, 25, 43 to 53 of the RPBS, the following obligations of SB companies stand out:

(i) Compliance with the strategic guidelines defined by the State shareholder.

(ii) Ensuring the presentation of substantiated quarterly reports, demonstrating the degree of execution of the objectives set out in the activity plan and budget, which must include the AOP.

(iii) Compliance with the mission and objectives set by the shareholder.

(iv) Preparing activity plans and budgets appropriate to the available resources and sources of financing.

(v) Disclosing a set of information pertaining to the company:

• The composition of its shareholder structure.
• The identification of the social participations it holds.
• The acquisition and disposal of social participations, as well as participation in any associative or foundational entities.
• The provision of financial guarantees or the assumption of debts or liabilities of other entities, even in cases where they assume group organisation.
• The degree of execution of the set objectives, the justification for any deviations observed, and the corrective measures applied or to be applied.
• The activity and budget plans, both annual and multi-annual, including investment plans and sources of financing.
• Annual and multi-annual budget.
• The anual financial statement.
• The quarterly budget execution reports, accompanied by the reports of the supervisory body.
• The identity and curriculum vitae of all members of its corporate bodies, particularly the management body, as well as their respective remunerations and other benefits.

(i) Inform the shareholder representative and the general public about how its mission was pursued, the degree of achievement of its objectives, the manner of compliance with the social responsibility policy, sustainable development, the terms of public service provision, and the extent to which its competitiveness was safeguarded, particularly through research, development, innovation, and the integration of new technologies into the production process.

(ii) Comply with the legislation and regulations in force regarding the prevention of corruption, and annually prepare a report identifying occurrences, or the risk of occurrences, of the facts mentioned in subparagraph (a) of paragraph 1 of Article 2 of Law No. 54/2008, of 4 September.

(iii) Adopt or adhere to a "code of ethics" that encompasses stringent ethical and deontological behaviours, and ensure its dissemination among all its employees, clients, suppliers, and the public.

(iv) Pursue objectives of social and environmental responsibility, consumer protection, investment in professional development, promotion of equality and non-discrimination, environmental protection, and respect for principles of legality and business ethics.

(v) Implement human resources policies aimed at valuing the individual, strengthening motivation, and stimulating increased productivity, treating employees with respect and integrity, and actively contributing to their professional development.

(vi) Adopt equality plans aimed at achieving effective equality of treatment and opportunities between men and women, eliminating discrimination, and enabling the reconciliation of personal, family, and professional life.

(vii) Ensure that members of the management bodies refrain from intervening in decisions that involve their own interests, particularly in the approval of expenses incurred by themselves.

(viii) Ensure that members of the management bodies comply with the duty to declare any equity interests they hold in the company, as well as any relationships they maintain with its suppliers, clients, financial institutions, or any other business partners, which may give rise to conflicts of interest.

(ix) Ensure that the Public Business company's website includes historical and current financial information for each company, the identity and curriculum vitae of all members of its corporate or statutory bodies, as well as their respective remunerations and other benefits.

(x) Ensure that the Public Business Company website includes clear, relevant, and up-to-date information about the public service obligations to which it is subject, the contractual terms of public service provision, the underlying financing model, and the financial support received from the State over the last three fiscal years.

7. OBLIGATIONS OF THE PUBLIC MANAGER STATUE

From the Public Manager Statute (“PMS”) arises a set of rules that regulate the activities of those designated or appointed to manage a Public Business company, specifically from Articles 5, 6, 18, and 28 to 34.

The following rights and obligations of public managers stand out:

(i) Fulfil the company's objectives as defined in the general meeting or, where applicable, in management contracts.

(ii) Ensure the implementation of the guidelines defined by law, particularly those provided for in Article 11 of Decree-Law No. 558/99, of 17 December, and in the management contract, and the execution of the company's strategy.

(iii) Monitor, verify, and control the progress of the company's activities and business in all its components.

(iv) Assess and manage the risks inherent to the company's activities.

(v) Ensure the sufficiency, accuracy, and reliability of information related to the company as well as its confidentiality.

(vi) Maintain professional secrecy regarding facts and documents that come to their knowledge in the exercise of their functions and not disclose or use, for any purpose, for their own benefit or that of others, directly or through an intermediary, the knowledge derived from such facts or documents.

(vii) Ensure equitable treatment of shareholders.
(viii) Conduct a systematic evaluation of the managers' performance based on the objectives set out in the strategic guidelines or arising from the management contract, as well as the criteria defined in the general meeting.

(ix) Enter a management contract that includes the elements provided for by law and complies with the template provided in specific legislation.

(x) Enter contracts within three months from the date of the public manager's appointment, between the manager, the shareholder representatives, and the Government member responsible for the respective sector of activity.

(xi) Ensure that the contracts do not establish specific regimes for indemnification or any other compensation for termination of functions.

(xii) Comply with the existing rules regarding the definition of remuneration, namely:

• The remuneration of public managers includes a monthly remuneration which cannot exceed the monthly remuneration of the Prime Minister.
• The remuneration of public managers also includes a monthly allowance, paid 12 times a year, for representation expenses amounting to 40% of the respective remuneration.
• Non-executive directors are entitled to a fixed remuneration corresponding to the normal activity they perform, up to a limit of one quarter of the fixed remuneration established for executive directors.
• When non-executive directors have effective participation in committees specifically created to monitor the company's activities, they are also entitled to a supplementary remuneration, in which case the limit of the total remuneration is one third of the fixed remuneration established for executive directors; and
• The remuneration of non-executive directors does not include any monthly allowance for representation expenses.

(xiii) Management contracts must include:

• Fixed values for each component of the considered remuneration.
• Management bonuses that may be awarded at the end of the fiscal year or term, which cannot exceed half of the annual remuneration earned, based on the fulfilment of objective criteria on which their potential award depends, without prejudice to the limit set in the respective statutes; and
• Other rewards or benefits applicable to the company's other employees.

(xiv) Public Business Sector companies, in their relationship with the public manager, must:

• Ensure that public managers do not use credit cards and other payment instruments for company-related expenses.
• Ensure that public managers are not reimbursed for any expenses that fall under the concept of personal representation expenses.
• Define by general meeting resolution the maximum value of communication expenses, including mobile phone, home phone, and internet.
• Ensure that the maximum value of service vehicles assigned to managers is set by general meeting resolution, in the case of public limited companies.
• Comply with the value referred to in the previous point, which is defined in accordance with the guidelines established for this purpose by the shareholders or by order, published in the Diário da República, of the Government member responsible for the finance sector.
• Comply with the maximum value of fuel and tolls allocated monthly to service vehicles, which is set at one quarter of the monthly allowance for representation expenses.
• Ensure that managers comply with the prohibition of exercising any option to purchase service vehicles assigned to them; and
• Grant managers the social benefits conferred to the company's employees where they perform their duties, as specified by the respective remuneration committees, the general meeting, or the Government responsible for the finance sector and the respective activity sector, as applicable, except for supplementary pension, retirement, survival, or disability plans

In August 2022, Law 16/2022, of 16 August 2022 ("Electronic Communications Law" - "ECL") implemented the European Electronic Communications Code ("European Code" - "EECC").

Despite the absence of changes in critical elements, the ECL brings in some crucial innovations regarding (i) consumer rights, (ii) sanctioning framework, and (iii) privacy in electronic communications.

Compared with the 2005 electronic communications law (Law 5/2004, of 10 February 2004), the ECL has a wider scope reflecting a more comprehensive definition of "electronic communications service". According to the new definition, electronic communication services now encompass individually addressed signal services – delivered through electronic networks – and services independent of numbers, such as internet access, machine-to-machine communications, and over-the-top services ("OTT").

The rules entered into force 90 days after the ECL enactment (14 November 2022), with the following exceptions:

• Rules covering the charges required in the event of early termination of the agreement at the consumer's request (refer to articles 136/4 and 136/5 of the ECL) became effective 60 days following its publication on 13 January 2023;
• Rules on emergency communications and a single European emergency number which shall take effect from the moment the access to an emergency service is opened to the public by the competent national authorities; and
• Rules on network and service security, including additional requirements and assistance and cooperation arrangements with the National Computer Security Incident Response Team (Equipa de Resposta a Incidentes de Segurança Informática Nacional), which came into force immediately with the publication of the ECL.

It is worth mentioning that, in 2004, the Portuguese legislators had already unified five EU Directives into a single piece of legislation, creating a structurally cohesive framework that was broadly maintained until 2022. Even so, by mid-2021, in addition to the 2004 Electronic Communications Law, the Portuguese communications' regulatory framework consisted also of 46 other diplomas: 23 laws and 16 administrative regulations.

Despite major changes, especially for consumers and the sanctioning framework, the ECL has kept the same structure as its preceding legislation, affecting the operator's financial and business stability.

1. ANACOM AND OTHER COMPETENT AUTHORITIES

The Portuguese Communications Authority (Autoridade Nacional de Comunicações - "ANACOM") serves as Portugal's National Regulatory Authority (Autoridade Reguladora Nacional - "NRA") for the communications sector.

The term "communications" – which defines ANACOM's scope of authority – includes electronic and postal communications. The ECL clarified ANACOM's jurisdiction in previously undefined areas and expanded its role to include new market sectors.

For instance, the ECL extends ANACOM's regulatory authority to Over-The-Top (OTT ) services. Although these services operate exclusively at the application layer of data transmission networks , the ECL categorises OTT as network services for legal and market analysis purposes, particularly regarding end-user rights.

The ECL assigns ANACOM a comprehensive set of regulatory, supervisory, control, and enforcement duties for the communications sector. Specifically, ANACOM is responsible for the following:

• Promoting competition in the provision of electronic communications networks and services;
• Ensuring access to networks, infrastructures, facilities, and services;

• Protecting the rights and interests of consumers and other end-users; and

• Ensuring access to the universal electronic and postal communications service and enforcing universal service obligations.

Among other changes, the ECL grants ANACOM additional powers and duties, particularly in spectrum management. ANACOM is now authorised to promote the shared use of the radio spectrum, allowing multiple operators to access the same frequency bands through the allocation of rights of use for frequencies (in Portuguese, "Direitos de Utilização de Frequências" or "DUF").

Additionally, the ECL clarifies that regulations for competitive or comparative selection procedures for radio spectrum rights of use must be approved by the government ministerial department responsible for the communications sector.

The ECL is aligned with the European Electronic Communications Code by recognising the role of "other competent authorities" in the communications sector. Entities such as the National Authority for Emergency and Civil Protection (Autoridade Nacional de Emergência e Proteção Civil – "ANEPC") are legally granted specific powers, particularly concerning end-user rights.

To facilitate this, the ECL requires ANACOM to collaborate with "other relevant entities" by organising public consultations and sharing information on matters of joint interest, particularly those related to emergency communications.

2. GENERAL AUTHORISATION, FREQUENCIES, NUMBERS AND SECURITY

2.1. GENERAL AUTHORISATION FRAMEWORK

The provision of electronic communications networks and services is unrestricted, allowing companies to offer such services without prior authorisation from the regulator, except when obtaining rights of use for elements such as frequency bands (DUFs) and numbering rights.

Companies intending to provide public electronic communication networks and publicly available electronic communication services must notify ANACOM before starting operations. This notification must include:

• A statement of the applicant's intent to begin operations;
• The applicant's identification details, along with the website associated with the provision of public electronic communication networks and services;
• Contact information for communications and notices, including a mandatory email address;
• A brief overview of the planned network and services; and
• The expected service launch date.

It is worth mentioning that companies not subject to the general authorisation regime under the ECL are not required to fulfil this prior notification to ANACOM requirement before launching their operations. Similarly, this requirement does not apply to providers of electronic communications services not intended for public access.

ANACOM may also, through specific regulations, exempt certain companies offering specific public electronic communication networks and publicly available services from this requirement.

2.2. GENERAL AND SPECIFIC CONDITIONS

Companies providing electronic communications networks and services remain subject to several general conditions established under the previous law. These include:

• Access obligations;
• Obligations related to the processing of personal data and the protection of privacy within the electronic communications sector;
• Obligations to install and provide lawful interception systems to national authorities, including decryption capabilities when such facilities are offered;
• Conditions of use of the radio spectrum for electronic communications services; and
• Conditions of use to ensure communications between emergency services, competent authorities, civil protection agents and the public.

Entities not subject to the general authorisation regime are not subject to these general conditions.
In addition, companies providing electronic communications networks and services may also be subject to specific obligations, particularly those related to access and interconnection, retail market regulations, and the provision of universal service.

Finally, it is important to note that providers of independent interpersonal communication services may, in certain cases, also face access and interconnection obligations due to changes introduced by the ECL.

2.3. OPERATOR'S RIGHTS

The ECL grants companies providing electronic communications networks or services -whether intended for public or private use - the right to request the establishment of rights of way and to utilise the radio frequency spectrum for deploying their networks and services.

Companies offering public networks or services have additional rights, including the right to apply for universal service provider status and expand their coverage nationwide.

These rights may be amended through legislative, regulatory or administrative measures, provided such changes are objectively justified, proportioned and approved by the rights holder. Amendments are subject to a public consultation process that allows stakeholders to provide input unless the changes are minor or do not affect the fundamental nature of the rights of use.

The holders of DUF and numbering resources are granted a general guarantee of non-restriction and irrevocability of these rights until their expiration. However, the law outlines specific criteria under which these rights may be restricted or revoked in advance by the NRA, including:

• Voluntary consent by the rights holder;
• Justified reasons to ensure the effective and efficient use of numbering resources or radium spectrum; and the implementation of technical measures under Article 4 of the Radium Spectrum Decision.

Restricting or revoking rights without the holder's consent or in unjustified cases must follow a legal procedure that upholds the principles of proportionality and non-discrimination.

In cases where rights are restricted or revoked, holders are entitled to compensation for any exceptional and abnormal losses or damages suffered, as determined by ANACOM following the rules on extracontractual liability of the State and other public entities.

Summarising, the ECL does not introduce significant innovations in this area but clarifies that these rules extend to Over-The-Top (OTT) services and companies that wish to offer electronic communications services not intended for public use.

2.4. THE RADIO SPECTRUM

The radio frequency spectrum, which enables the transmission of electromagnetic waves with frequencies between 3kHz and 3000GHz, is a vital public resource with significant economic and social value for the country. This importance is evident in the amounts paid for rights to use it and in the intense public debate surrounding spectrum-related issues.

ANACOM is responsible for managing the spectrum and must promote its efficient use according to technological and service neutrality principles. The first of these principles states that any technology may be used in the frequency bands allocated to electronic communications services. In contrast, service neutrality allows any type of electronic communications services may be offered through the available frequency bands.

The ECL has not introduced significant changes to ANACOM's role. ANACOM retains most of its existing powers, including the power to assign, modify, renew rights of use, and to authorise the transfer or lease of such rights.

 However, in response to the challenges faced during the 5G DUF auction debacle, the ECL introduced two seemingly conflicting changes regarding future frequency allocation procedures. ANACOM has also been granted new powers for the protection of competitive usage of frequencies. On the other hand, the authority to decide on frequency allocation procedures has been transferred to the Government, which must now directly approve them.

The ECL reiterates ANACOM's responsibilities for granting rights of use for frequencies of electronic communications networks or services. These rights are always limited in time. For example, rights of use for the spectrum of wireless broadband electronic communications services are granted for 15 years, with the possibility of renewal.

As under the previous regime, ANACOM is also responsible for defining the conditions associated with the rights of use of the spectrum. If breached, the regulator can revoke the rights of use or impose other measures. These conditions must be proportional, transparent, and non-discriminatory, including setting maximum periods of rights of use.

The ECL introduces an innovative provision for the shared use of the radio spectrum, expanding its potential applications.
The renewal of rights of use is possible, but the renewal rules have been significantly changed under the ECL:

• Under the previous law, the renewal of rights of use for the radio frequency spectrum was solely dependent on the initiative of the holder; and
• Under the ECL, ANACOM may proactively assess the need to renew the radio frequency spectrum.

Holders of rights of use for the radio frequency spectrum may also apply for renewal. Still, applications must be submitted between 18 months and five years before the rights expire, compared to a minimum of one year's notice under the previous law. In any case, the regulator must respond to renewal requests within six consecutive months from the receipt date.

In the case of rights of use, whose number is limited, public consultations must be held to allow interested parties to provide input on renewal decisions. Since rights of use are licensed to operators, they are required to pay periodic fees, which, except in exceptional cases, are mainly intended to cover the costs of radio supervision.

Finally, it is worth mentioning that the National Frequency Allocation Framework (Quadro Nacional de Atribuição de Frequências - "QNAF", which may be accessed through this link) serves as the technical management instrument used for the radium spectrum, which defines the conditions of use according to its purpose.

2.4.1. TRANSFER AND LEASE OF RIGHTS OF USE

The ECL allows the transfer or leasing of rights of use for the radium spectrum.

As a rule, if the rights holder wishes to transfer or lease them, it can do so through a request to the regulator, which must approve or deny it within 45 business days.

However, in some cases, the transfer or leasing of rights of use is not permitted. These cases include rights allocated free of charge, the provision of radio broadcasting services and the distribution of television and radio broadcasting services as part of specific procedures to achieve public interest objectives.

2.4.2. COMPETITION

Under the ECL, ANACOM, the Portuguese NRA, is required to promote effective competition within the European Union's internal market when allocating, modifying, or renewing frequency usage rights, striving to minimise potential distortions to competition. In this regard, ANACOM, as the Portuguese NRA, can implement or recommend measures to other competent authorities addressing competition distortions. These measures may include, among others:

• Limiting the number of spectrum bands for which usage rights are granted or imposing conditions on these rights;
• Reserving portions of a spectrum band or group of bands for allocation to new market entrants; and
• Denying new rights of use or prohibiting new spectrum uses in specific bands and imposing conditions to their allocation, transfer, or lease to prevent competitive imbalances.

When adopting such measures, the regulator should base its decisions on an objective and forward-looking assessment of market competition conditions and the necessity of the proposed actions.

2.5. NUMBERING RESOURCES

The ECL designates ANACOM as the entity responsible for managing numbering resources in Portugal.

"Numbering resources", defined as the structured set of codes used by electronic communication networks to route signals, are part of the National Numbering Plan (Plano Nacional de Numeração – "PNN", accessible through this link), or an international numbering plan. ANACOM has the power to administer and allocate these numbers, which can be used to identify networks, network elements, end-users, services or applications that utilise these services and networks.

The ECL states that ANACOM is tasked with ensuring the availability of numbering resources for the operation of public electronic communication networks and the provision of publicly accessible electronic communication services.

Operators must submit a detailed and justified request to ANACOM to obtain the right to use these resources. ANACOM uses the National Numbering Plan as a technical tool for managing the allocation of these numbers, which includes specific criteria for each range of numbers.

2.6. SECURITY AND EMERGENCY

The ECL establishes general responsibilities for coordinating electronic communication networks and services during crises, wars, major accidents or disasters, and threats to internal security but also emphasises two specific regulations:

• First, providers of communication services using numbers are required to issue free public warnings in the event of imminent or ongoing emergencies, accidents, or disasters; and
• Second, all end-users of communication services are entitled to free access to the European emergency number 112, as well as any other national emergency numbers designated by ANACOM and listed in the National Numbering Plan, for making emergency calls.

3. MARKET ANALYSIS AND REGULATORY CONTROLS

3.1. GENERAL PROVISIONS

According to the ECL, market analysis and the imposition of specific obligations must comply with the principle of full justification, meaning that all decisions must be based on legal requirements and preceded by a public consultation process.

The definition of relevant products and geographic markets in the telecommunications sector and determining which companies have significant market power are ANACOM's responsibility.

3.2. MARKET ANALYSIS

The ECL entrusts ANACOM with the responsibility of defining and analysing the relevant product and service markets within the electronic communications sector, considering the level of infrastructure competition in those areas.

Following this analysis, ANACOM may impose specific obligations when:

• Market entry barriers exist;
• The market structure does not support effective competition; and
• Competition Law alone is insufficient to address specific deficiencies.

This analysis can be conducted for national and transnational telecommunication markets in collaboration with European authorities.

3.3. OBLIGATIONS ON OPERATORS WITH SIGNIFICANT MARKET POWER

The ECL retains the traditional definition of significant market power as a strong economic position that enables a company to operate independently of competitors, customers and end-users.
Like the previous legislation, the ECL allows the regulator to impose certain obligations on companies with significant market power. These obligations may include:

• Meeting reasonable requests for access to and use of infrastructure, such as civil engineering assets owned by the company;
• Implementing cost-oriented pricing and cost accounting systems for specific types of interconnections and access when there is no effective competition. However, the ECL introduces stricter conditions for imposing these obligations. ANACOM must now consider the benefits of predictable and stable wholesale prices that encourage efficient market entry and incentives for companies to invest in new and more advanced networks, particularly in areas of low population density; and
• The ECL aligns with the European Electronic Communications Code by emphasising the positive impact that the wholesale market can have on retail competition and reduce competitive risks.

As a result, wholesale companies are subject to a more favourable regulatory regime. Their obligations may be limited to non-discrimination, access to specific network elements and associated facilities, or fair, equitable, and reasonable pricing. However, this rule applies if the company meets strict cumulative criteria, which may make qualification challenging for some.

Companies with significant market power are now required to address specific obligations regarding infrastructure migration. For example, to mitigate the potential competitive risks associated with transitioning from old copper networks to next-generation networks, such companies must provide prior notification when planning to deactivate or replace their infrastructure, either fully or partially.

Access obligations are not limited to companies with significant market power. To improve economic efficiency, the regulator can impose access requirements on operators or owners of cabling and associated facilities within buildings or up to the first distribution point outside the building, regardless of market power status. This measure relies on symmetric regulation that applies uniformly to all operators.

3.4. ACCESS AND INTERCONNECTION

3.4.1. INTERCONNECTION

Companies providing electronic communication networks and services are free to negotiate and establish interconnection agreements independently.

ANACOM has the authority to impose access and interconnection obligations on companies, regardless of whether they possess significant market power, as long as they are objective, proportionate, transparent, and non-discriminatory. For instance, ANACOM may impose additional obligations on companies that control the access to end-users.

3.4.2. REGULATORY OBLIGATIONS

The ECL aligns closely with the EECC, preserving the regulatory obligations established under the previous legislation. However, the ECL introduces new and more stringent and complex regulatory obligations.

One example is the ECL's emphasis on symmetric regulatory obligations and access requirements, such as providing access to cabling up to the first distribution point, enabling access to civil engineering assets and imposing national roaming obligations. These new provisions aim to provide more regulatory oversight and promote fair competition in the market. However, the stringency of these obligations adds complexity that may hinder their implementation.

While these new rules may have been introduced to strengthen user protections, they may raise concerns regarding the challenges associated with their practical application.

3.4.3. NATIONAL ROAMING OBLIGATIONS

Following the EECC, the ECL introduces the concept of national roaming. This is viewed as a significant regulatory mechanism to overcome physical and economic barriers to the provision of services and networks requiring access through usage rights for radio spectrum frequencies, particularly for mobile network operators serving end-users.

When accessing and sharing passive infrastructure is insufficient to ensure adequate coverage, the regulator may enforce active infrastructure sharing or mandate the establishment of national roaming agreements. However, such obligations may only be imposed under specific conditions, such as unavoidable physical or economic constraints – such as limited access in protected areas due to building restrictions – leading to inadequate or non-existent service availability for end-users.

This mechanism is justified solely when passive infrastructure sharing and access prove insufficient.

3.4.4. INTERNATIONAL ROAMING

International roaming, initially introduced with early 2G mobile networks, is a service that enables customers of one provider to access mobile services through the networks of other operators in foreign countries. This essential service allows users to make and receive voice calls, send and receive text and multimedia messages, and access the internet while travelling. It is one of the most important factors in the widespread adoption of mobile services, particularly over GSM networks.

Roaming costs are traditionally higher than domestic networks, as third-party operators set fees for visiting users. Regulatory pressure in the European Economic Area (EEA) has led to a significant reduction in roaming costs. Since the introduction of the EU's "Roam Like at Home" initiative in 2017, users within the EEA pay the same rates for international roaming as they do on their home network. Costs outside the EEA remain higher than home network costs.

It is important to note that international roaming is not regulated by the ECL but by European regulations, specifically by Regulation (EU) 2022/612 of the European Parliament and the Council of 6 April 2022.

3.5. REGULATORY CONTROLS IN RETAIL MARKETS

ANACOM's imposition of specific obligations tailored to retail markets is contingent upon two conditions:

• The absence of effective competition; and
• Imposing additional obligations would not align with the overall objectives of regulation.

The ECL aims to prevent operators from engaging in excessive pricing and discriminatory practices against end-users.

4. USERS' RIGHTS, UNIVERSAL SERVICE AND ADDITIONAL MANDATORY SERVICES

4.1. END-USERS' RIGHTS

Companies, including OTT providers, that offer networks or services are now fully subject to the end-users’ rights set out in the ECL.

As an exception applies to the micro-entities offering number-independent one-to-one communications services, while exempt from these regulations, they are still required to inform end-users about this exemption.

According to the ECL, end-user rights extend to consumers, micro-entities, small enterprises, and non-profit organisations that do not waive such rights.

Under the ECL, organisations are entitled to:

• Receive written information about service terms and conditions;
• Be notified at least 15 days in advance of the operator's intention to discontinue a specific service;
• Access information on expected and actual service levels;
• Receiving itemised invoices, including itemised cost breakdown and information on the end of the minimum contractual period;
• Benefit from increased protections in cases of unauthorised contracts;
• Tools to view pricing and other contractual conditions;

• Receive immediate and proportional reductions in monthly fees for service quality failures, in addition to any other applicable compensation;

• Maintain continuous access to the contracted services and receive notice of service suspension; and

• The right to number portability.

The protection of end-users became the foundation of the ECL. Nonetheless, the legislator's attempt to empower users has led to unintended consequences, including a lack of clear guidelines, creating an unwelcome and unexpected sense of uncertainty. For example, under the ECL, operators are prohibited from unjustifiably discriminating against customers based on nationality or place of residence; however, no specific guidelines have been provided regarding what may be considered justifiable discrimination. This is a sensitive matter and may lead to disputes in the future.

The ECL seeks to empower end-users by ensuring fair treatment within the market. The protection of end-users is a fundamental aspect of the ECL. As part of this framework, the non-discrimination rules ensure that consumers have equal access to services and that companies cannot discriminate against users based on their nationality or residence.

ANACOM plans to update the portability regime through a new regulation, replacing the 2005 version. According to the public consultation, the primary goal is to maintain the core structure of the existing framework. However, the new regulation introduces several key changes, particularly aimed at protecting consumers, including:

• Prohibiting certain portability fees for end users
• Requiring recipient providers to ensure both the portability of numbers and their activation.

4.2. AGREEMENT INFORMATION REQUIREMENTS

The ECL complements the framework for the disclosure of pre-contractual information. Under the ECL, public communication providers and operators, excluding machine-to-machine service providers, are now required to provide consumers with essential information (under the Consumer Protection Act) about key aspects of the agreement before signing the contract. Among other things, operators are required to disclose information on:

• The main characteristics of the goods or services;
• The provider's identity, including the company's name, postal address and telephone number, and other contact information;
• The full price of the services, including the fixed fees, applicable taxes, additional setup charges, and other relevant costs, including maintenance fees; and
• The price calculation method in cases where, due to the nature of the service, the price cannot be determined before the agreement.

The ECL also requires operators to adopt and make available a summary of the user contract terms and conditions.

4.3. CONTROL MECHANISMS FOR CONTRACTING AND INVOICING

According to the ECL, billing for publicly available electronic communications services must be conducted monthly. Invoices for these services must be sent, free of charge, to the end user and must include the following details:

• A breakdown of the services provided along with the corresponding prices;
• The remaining term to complete the minimum contractual obligations and, when applicable,
• The details of the social tariff for broadband Internet access services and its application for consumers with low incomes or special social needs.

4.4. DURATION OF THE AGREEMENT

Due to the prevalence of bundled services (triple, quadruple and quintuple play offerings with implied discounts ), particularly in the residential fixed-line market segment, local operators tend to waive setup fees and replace them in favour of minimum contract periods, which, if breached, steep early termination fees are applied. Therefore, it is no surprise that minimum contract periods , have become one of the most debated issues in consumer law.

However, the ECL still emphasises its stance on minimum contract periods and early termination charges, opting for more targeted changes, such as clauses introducing the concepts of initial and follow-up minimum contract periods and setting caps for both.

Consequently, operators providing publicly available communication services are required to offer services without any customer lock-in periods, with the minimum contract period limited to 24 months.

Furthermore, the consumer's subscription to supplementary services or terminal equipment cannot be used to extend the initial contractual loyalty period unless the consumer explicitly agrees to it at the time of subscription.

4.5. TERMINATION OF THE AGREEMENT

Regarding contract termination, in its quest to protect consumers, the ECL introduced significant deviations to general legal principles, particularly on contract default and liability.

According to the ECL, the suspension of services for defaulting non-consumer end-users is allowed subject to prior notice. It should be noted that discontinuing access to emergency services is strictly prohibited.

A notice must be issued for defaulting consumer end-users, initiating a grace period of at least 30 days. Following this period, an additional 30-day suspension period is permitted. The contract will automatically be terminated without further notice once this second period elapses and the necessary notification requirements are fulfilled.

On the other hand, in cases where services are unavailable for longer than 24 hours, the ECL imposes a proportional reduction in the bill, regardless of any consumer's request. If the service remains unavailable for over 15 days, the end-user has the right to terminate the agreement without incurring any cost.

Also, in this case, the ECL outlines additional specific causes for breach of agreement beyond those previously mentioned.

For instance, in the event of a "significant discrepancy between the actual performance of services and the performance outlined in the agreement", the end-user may demand corrective measures, but the ECL does not set out the measures that may be required. The ECL gives the end-user the right to terminate the agreement without penalty. The use of such arguably vague concepts may lead to controversies and possibly to decisions that can set a standard for their application.

As mentioned above, the ECL introduced specific changes regarding the admissibility of minimum contract periods, along with the mentioned restrictions; the ECL limits early termination charges when customers fail to comply with the agreed-upon lock-in periods.

The ECL recognises that a customer may be able to terminate their agreement with an operator without incurring early termination charges if the consumer:

• Changes their address, and the operator cannot demand additional charges if it cannot provide the contracted or equivalent service in terms of characteristics and price at the new address. The consumer changes their primary residence permanently, and the operator is unable to provide the same or equivalent service at the new location;
• Loses disposable monthly income due to involuntary unemployment;
• Is permanently or temporarily incapacitated for work or loses monthly income due to a long-term illness;
• Moves to a third country, defined as an unforeseeable move of the contract holder's permanent residence outside of national territory; or
• Is absent from their residence due to imprisonment or reliant on third-party care.

Although the ECL adds these breach of contract causes to protect users' interests that the legislator deemed fair, the overuse of vague terms, such as "unforeseeable move (…) out of national territory" or "loss of income due to illness", may lead to challenges in the implementation of the new legislation.

Additionally, ANACOM has introduced a contract termination platform for consumers. This platform allows users to submit termination requests and digitally access contract information.

4.6. UNIVERSAL SERVICE

The ECL has established these causes of breach of agreement with practical implications to reinforce end-users’ protection and ensure a fair termination process.

According to the ECL, universal service represents a minimum set of services that must be available to all consumers at an affordable price within the national territory, considering specific national conditions. The aim is to prevent social exclusion caused by a lack of access, enabling citizens to actively participate in social and economic life.

Universal service should guarantee the availability of the following:

• Reliable broadband internet access at a fixed location;
• Voice communication services, including the necessary underlying connection, at a fixed location; and
• Specific measures to ensure equivalent access for customers with disabilities to services available to other users.

The ECL introduces significant changes to universal service, particularly by promoting social regulation, primarily through the so-called "social internet tariff".

4.7. ADDITIONAL MANDATORY SERVICES

According to the ECL, the Government can demand operators to provide additional services to the public within the national territory, beyond the universal service obligations. However, in such cases, a compensation mechanism involving specific companies should be granted.

5. TRANSPORT OBLIGATIONS AND EQUIPMENT

ANACOM may, for public interest reasons, impose signal transmission obligations on companies operating in the television and radio programming services market and provide adequate compensation.

To comply with the ECL, digital television equipment must be capable of decoding digital signals and reproducing signals broadcast without encryption. Additionally, providers are required to facilitate the interoperability of equipment to encourage reuse.

Lastly, any activities involving illegal devices, including manufacturing, importing, distributing, selling, renting, installing, maintaining, promoting, acquiring, or using such devices, are considered a serious administrative infraction.

An illegal device refers to any equipment or software specifically designed or adapted to enable unauthorised access to protected services in an intelligible form without the service provider's consent.

6. FEES SUPERVISION AND CONTROL

6.1. RATES

Operators providing communication networks and services under the general authorisation framework are subject to an annual fee. This fee is determined based on the administrative costs associated with managing, overseeing, and enforcing the general authorisation framework, the related rights of use and specific conditions.

Additionally, operators are responsible for additional fees related to the following:

• The allocation and renewal of frequency rights;
• The allocation, reservation, and renewal of numbering resource rights; and
• The allocation of rights of way.

6.2. SUPERVISION AND CONTROL

6.2.1. DISCLOSURE OF INFORMATION

To effectively carry out its responsibilities, ANACOM is authorised to access and request information from operators when necessary, provided the request is objectively justified, non-discriminatory and reasonable.

Specifically, companies must provide financial data and any additional information requested by ANACOM or other competent authorities, as long as the need is established, to ensure compliance with administrative charges, licensing conditions, and other regulatory requirements. In general, operators must provide financial and technical information to guarantee compliance with obligations related to the services they are authorised to provide.

6.2.2. CONTROL

As a regulatory body, ANACOM is responsible for overseeing the enforcement of the ECL, in addition to the Portuguese Food and Economic Security Authority (Autoridade de Segurança Alimentar e Económica – "ASAE") and the Portuguese Tax Authorities (Autoridade Tributária e Aduaneira). ANACOM is also in charge of supervising the electronic communications sector as a whole.

However, under the ECL and other relevant legislation, judicial courts and central Government agencies, such as the national cybersecurity agency (Centro Nacional de Cibersegurança – "CNCS"), hold a level of jurisdiction over the sector. These include the previously mentioned ANEPC (the emergency and civil protection agency), the Food and Economic Security Authority (Autoridade de Segurança Alimentar e Económica – "ASAE"), the Competition Authority (Autoridade da Concorrência – "AdC"), the Tax and Customs Authority (Autoridade Tributária e Aduaneira – "AT") and the district council's authorities.

6.2.3. NEW SANCTIONING FRAMEWORK

The ECL has significantly expanded its sanctioning framework. It now includes more than 120 administrative infractions, of which nearly 97% are considered severe or very serious, potentially resulting in fines of up to one million or five million euros.

Regarding compliance with the end-consumer rules, more than 40 applicable sanctions account for over a third of the total ECL's administrative infractions under the ECL. 

Under the ECL, issuing guidelines, recommendations, or instructions to employees, agents, or business partners that may lead to a violation of rules or ANACOM's instructions is considered a severe administrative infraction.

As opposed to the initial version of the bill presented by the Government in May 2022 , the ECL does not include provisions for individual liability of members of management bodies and company directors.

Alongside a comprehensive list of violations for which operators are liable, under the ECL, a severe or very serious administrative offence occurs whenever an operator issues its employees, agents, or business partners with guidelines, recommendations, or instructions likely to result in a breach of rules on ANACOM's instructions.

It should be noted that this type of provision is rare within Portuguese law and seems to be a compromise when compared to the bill submitted to Parliament that would have made company directors and senior staff operators personally liable. Considering the broad and ambiguous nature of these sanctioning provisions, we expect to see a rise in disputes and the consolidation of case law concerning how sanctions should be applied.

OPEN INTERNET PRINCIPLE

The open internet principle ensures that citizens of the European Union have unrestricted access to online content and services, regardless of their location or time, without discrimination or interference from internet service providers.

In Portugal, this principle is reflected in national law through the ECL, which states that any actions taken to maintain the quality of internet access must comply with Regulation (EU) 2015/2120 of the European Parliament and of the Council of 25 November 2015.
The open internet principle is crucial today, where information is widely accessible online. It ensures that individuals and businesses have unrestricted and equal access to online content and services. For instance:

• Internet service providers are prohibited from blocking or slowing down their competitors' content, applications, or services, except in limited circumstances, such as maintaining network security and integrity. Under this principle, e.g., internet providers must prevent unjustifiable blocking or slowing down content, applications, or services, except in limited cases, such as to maintain network security and integrity;
• Similarly, service providers must provide equal access to online content and services, free from undue interference driven by their interests and cannot prioritise traffic on their networks based on payments from a specific source.

In conclusion, it's important to note in cases of violation of the open Internet provisions, EU Member States are obligated to enforce sanctions that are effective, proportional, and dissuasive. Service providers found in breach may face both administrative and financial penalties.

In 2024, investment in Portugal's tourism, real estate, renewable energy, and other long-term projects continued to be robust. Despite facing challenges, both local and international investors maintained confidence in the future prospects of these sectors.

After growing 2% in 2024, the Portuguese economy is projected to grow 2.3% in 2025 and 2026. Exports of goods and services reached 56,293 million euros by the end of June 2024, a decline of 0,9% compared to the same period in 2023.

In 2024, investment in tourism, real estate, renewable energy, and other longer-term projects remained strong in Portugal. Despite the difficulties, local and international investors remain confident in the longer-term prospects in tourism, energy, and real estate.

It is expected that the «Recovery and Resilience Plan» (Plano de Resiliência e Recuperação, PRR), supported by the European Union, will improve the performance of Portugal’s economy in the near future. The government plans to invest in 85 infrastructure projects, with €22.200 million in the transportation sector, mainly in upgrading or building new railroads and subway infrastructure, €13,060 million in renewable energy, and €7,418 million in environment-related investments. In 2023, new public funds totalling 400 million euros were established, mostly to invest in start-ups.

Portugal’s commitment to energy transition and technological developments is attracting international and local investors in solar and wind power projects. Investors are waiting for the government to open up public tenders to develop offshore wind power projects on the coast of Portugal.

In a world of many uncertainties, with wars raging in Ukraine and the Middle East, Portugal remains a safe harbour for international investors. According to the Institute for Economics & Peace’s “Global Peace Index 2023”, Portugal is one of the safest countries in the world, ranking 7th in the most peaceful countries in the World and 4th in Europe.

This guide reviews the main aspects foreign investors consider when looking at Portugal as a place to invest, such as how to set up a business, government incentives, employment rules, taxation, intellectual property protection, real estate, and the judicial system.
For more information, go to www.macedovitorino.com/en/Why-Portugal

This paper provides an overview of the current state of the Portuguese Capital Markets and addresses the main capital market rules, dealing specifically with the regime of qualified holdings, admission to trading, public offerings and, finally, the sanctioning regime.

The number of domestic listed companies in Portugal has been decreasing. The number of listed companies in Portugal reached its peak in 1990, with 152 listed companies at the Lisbon and Oporto Stock Exchange. Presently, only 53 companies are listed in Euronext Lisbon.

The main reasons for the decrease in the number of listed companies are the change in the shareholding structure of listed companies through a merger or acquisition, which may be followed by a "squeeze-out" of minority shareholders and consequent withdrawal from the stock exchange (as were the cases of Companhia de Seguros Tranquilidade, S.A. and with Vodafone Telecel – Comunicações Pessoais, S.A.) or by decision of the shareholders.

Since 2000, there were more than 50 IPOs in Portugal. Although the number of IPOs decreased after the financial crisis of 2008. SMEs, unlike state-owned companies, have requested to be listed on either the Portuguese regulated market (Euronext Lisbon) or another platform (in particular, multilateral trading facilities such as Euronext Access and Euronext Growth).

The last IPO in Portugal took place in 2021 with the listing of Greenvolt – Energias Renováveis, which meanwhile has been acquired by KKR.

The prices of the twenty listings with the largest market capitalisation form the Portuguese Stock Index 20 ("PSI-20"). PSI-20 is the main benchmark stock exchange index in Portugal, which includes, among others:

• EDP, a power company, which has the largest market capitalisation in the PSI 20 and its subsidiary EDP Renováveis;
• Galp, an oil and gas company with investments in the electricity market as well;
• Millennium BCP, the largest private bank in Portugal;
• SONAE, a conglomerate of industrial and distribution companies;
• Jerónimo Martins a leading Portuguese distribution group with a presence in Poland and Colombia; and
• NOS, the second largest telecom operator in Portugal.

Access to the pdf version above.