Data is everywhere. Information assets are highly valued by companies. Nowadays, businesses depend more frequently on information technologies and data than a few years ago, mainly before the entry into force and application of the European General Data Protection Regulation (GDPR).

In M&A transactions, data is the key for the evaluation of the target company and the risks associated with the deal. Transactions rely on cybersecurity to protect sensitive and confidential information. However, as insurance coverage over information assets is still not widely sought for, risks are greater for companies that may be more vulnerable during M&A transactions.

But if not the risk of an information breach, or the risk of mispricing the transaction, then the risk of being held legally liable for such breach, including personal data violation, must be of alarming to businesses during M&A transactions.

Within the context of a transaction, there are two key points regarding data protection compliance to be considered: whether personal data can be transferred from the target to the acquiror; and whether the parties comply with privacy laws.
In general, asset deals may be more exposed to data protection compliance risks than share deals or corporate reorganizations, since, in these latest two cases, there is no change in the position of the parties to contracts with employees, customers, and suppliers; that is, there is no transfer of the data controller position, which, even though a shareholders’ change, will remain the same entity. However, there are still significant compliance risks associated with share deals. The differences stages of a M&A transaction require different measures to ensure proper data protection compliance.

With this paper, we intend to provide you with the main points of interest that should concern the parties to a transaction, and to outline potential solutions to minimize or eliminate compliance risks.


The typical M&A transaction kicks off with a due diligence on the acquiror, the target, or both. The due diligence is essentially an analytical review of data disclosed by the relevant party to a transaction. And the disclosure of data poses a significant compliance risk for those attributed the duty off keeping it safe.
Usually, access to data in a due diligence is assured via a data room, from which the reviewing party will obtain the contents that are object of the due diligence, including personal data, e.g., information on employees, customers. For this purpose, it may be advisable that data rooms disable save and print options, which is already common practice in many transactions.

Even before the transaction agreement is done, the parties are already obliged to comply with applicable data protection rules, as the pieces of information reviewed during a due diligence will most likely include personal data. And because data rooms usually host personal data, the parties to a transaction must execute data processing agreements with data room providers.
Personal data includes any information relating to an identified or identifiable natural person, as defined by the GDPR.
Deal structure and industry-specific due diligence is of great relevance, too. On one hand, personal data cannot always be transferred in asset deals, and, on the other, for businesses which are data-intensive, handling great amounts of personal data, it is advisable to conduct further compliance due diligence focusing on data protection.

When extra care is advisable, because e.g., the target company handles sensitive data, there are at least three main areas of play:

  • The transferability of data and, when applicable, the consent of data subjects on data transfer;
  • Whether the original purposes of the data processing (and for which, for example, data subjects gave their consent) are compatible with the acquiror’s business and data processing purposes in connection with the M&A transaction; and
  • The security standards in place at both target and acquiror to keep data safe.

Either for valuation or risk assessment, the acquiror should hence understand what the target’s liabilities on privacy matters are, as the acquiror may take on the target’s liabilities at completion.

What you should watch for:

  • Access to the data room should be restricted and information disclosed in the data room should be the necessary (data minimization principle). The employees or customers should not be identified or identifiable. For this purpose, and so that the information keeps meaningful value to the due diligence, the disclosing party can anonymize/pseudonymize information;
  • Alternatively, employees or customers should be informed that their information will be processed for the purpose of a due diligence and the disclosing party should obtain their consent. Not only this is impractical in large transactions, but also the parties should consider the fact that consent is only an appropriate lawful basis for data processing if it is genuine, which is not likely in an employment context, and thus the parties should rely on a different lawful basis for transferring data of employees;
  • The information disclosed should be limited to that that is strictly necessary to perform the due diligence. For this purpose, e.g., employment agreements can be sampled, or the information can be aggregated, or only key information can be disclosed, or the disclosure of sensitive data should be avoided;
  • The valuation of the target company should take into consideration that there may be restrictions to the use of personal data by the acquiror post-closing;
  • Whenever the target is processing data on behalf of a third party, data sharing agreements will likely include change of control or change of ownership clauses, which should be accounted for by the acquiror;
  • Both deal structure and the industry of the target are relevant for the purpose of assessing price, exposure to risk and steps required for a compliant M&A transaction.

If it were not for the comprehensive set of privacy rules, the assumption would be that the target company owned (and could freely exploit) the personal data it acquired over the years. But that is not the case.
Once the due diligence is complete, the transaction documents should safeguard the party’s position in view of any potential data breaches or infringement of data protection rules.

There are plentiful ways to ensure one’s position during negotiations and at signing: contract negotiations should entail an adequate level of protection against the findings resulting from the due diligence, whether this is reflected on the price or in contractual provisions; the share and purchase agreement should include representations and warranties that are tailored for data protection compliance and/or transferring the risk of violation; the counterparty should be able to warrant that it is compliant with privacy laws and has put in place adequate security standards, etc.
The target should warrant the acquiror, e.g., that there are not any pending proceedings related with data security breaches, that it has adequate security standards in place, or that it is compliant with the applicable privacy laws. Indemnification clauses and limitations of liability are also relevant in view of any potential breaches and/or liability resulting from the target’s business up until the completion date.
Insomuch as some transactions may be of greater complexity as regards data, data sharing and data integration, it may be cost-effective and legally advisable to include ancillary services agreements for the specific purpose of ensuring data protection compliance in the transaction documents.
There should be extra care in international M&A transactions due to potential international data transfers.
If data is transferred to a country outside of the EU-EEA, an assessment of the level of adequacy of the jurisdiction, to which the data will be transferred, has to be carried out. Alternatively, mechanisms such as standard contractual clauses, binding corporate rules, approved codes of conduct, approved certifications or a combination thereof have to be included in the transaction documents.
At signing, if the target processes or controls data, the acquiror should have obtained a comprehensive catalogue of data and respective consents, Records of Processing Activities (RoPAs), Data Protection Impact Assessments (DPIAs), if applicable, and Legitimate Interests Assessments (LIAs).

What you should watch for:

  • Data breaches and infringements of privacy laws are costly. Whenever appropriate, privacy-related risks should be accounted for with remediation and indemnification clauses;
  • If deemed adequate, it may be advisable that the parties agree to conditions precedent and covenants in respect to data processing;
  • Non-disclosure agreements (NDAs) should include data protection clauses and contractual penalties in case of failure to keep information confidential. We should note that NDAs executed by the parties for the purpose of ensuring confidentiality during the transaction process will most likely expire at signing of the asset purchase agreement (APA) or share purchase agreement (SPA), so it may be relevant to execute a new NDA at signing or include a non-disclosure provision in the purchase agreement;
  • If the target does not warrant that it is legally authorised to share the data with the acquiror, the acquiror risks exposure to liability for unauthorised processing of data;
  • Insurance on cyber risks is valuable and may even be a solution to a deadlock where the target is reluctant to be exposed to such a relevant liability.
Pre and post-closing

The day the share and purchase agreement are executed by the parties does not always match the closing of the transaction. The period between signing and the closing date could, in fact, take months. During this period, the transaction parties may also exchange information.
The parties should take into consideration that while the transaction is not closed, the acquiror is a third party and sharing information can result in responsibility before the competition authorities.

Some deals require a level of confidentiality that is sometimes conflicting with the interests of privacy laws. The timing for transfer of liability is key, then. When possible, and to avoid unnecessary exposure to compliance risks, the acquiror can be provided with statistical information instead of actual data, even if it is pseudonymized.

After the deal is closed, it is likely that the acquiror might have to face limitations on the use of data.

The acquiror should mind that the consent provided to the target by data subjects sometime in the past may both enable and limit the data processing by the acquiror. And even in a share deal, where the controller of data does not change, privacy policies will need to be updated, should the purpose or use of personal data change after completion.

What you should watch for:

  • Data sharing before the closing date should be limited to that strictly necessary for data integration purposes, and those handling data should be limited to the minimum;
  • Should the transaction not occur, the parties must be able to adequately eliminate and dispose of any data obtained during negotiations and before closing date;
  • Consent is not transferable in the context of an M&A transaction unless the data subject was informed of such a possibility when providing his consent, so this should be considered by the acquiror;
  • Data sharing before the closing date should be limited to that strictly necessary for data integration purposes, and those handling data should be limited to the minimum;
  • Where the purpose or use of data does change after completion, the acquiror will need to obtain the consent of the data subjects for their data to be processed under the revised privacy policies.
How does the GDPR impact M&A?

In the context of an M&A transaction, personal data of many sorts is handled and/or transferred from target to acquiror. This will include employees’ information, applicants’ CVs, IP addresses, suppliers’ information, etc..
The right to data privacy is not an absolute right. It is relative to its function in society. Throughout the transaction process, it is crucial that the parties weigh their legitimate interests against the fundamental rights and freedoms of data subjects.
The assessment of an adequate balance between the right to protection of individual data and freedom of enterprise adds a layer of complexity to M&A that is novel to the market.

During negotiations, the acquiror is a third party as it is neither the data subject, nor the controller, processor, or an entity who, under the direct authority of the controller or processor, are authorized to process personal data. This puts the parties in a very delicate position as to what information can be shared at a stage where trust and disclosure is key to the success of the transaction:

  • On one side, the logistics are seriously impacted as parties must go on tiptoe through each stage of negotiations and even after executing the agreement, bearing in mind that sharing information means exposure to a compliance risk.
  • On the other, data privacy influences both valuation and deal structure. As we explored, the price may be adjusted by exposure to compliance risks, and the structure of the deal must be compatible with the transfer of data from the target to the acquiror.
  • On the third, where transactions are negotiated behind closed doors, the current data protection framework, compliance obligations, and recent history of sanctions motivated by infringements during negotiations, suggest that even though the door is closed, it is not locked, and personal data protection concerns may not be neglected.

If you wish to find out more, please download our PDF down bellow.


As part of the Recovery and Resilience Plan ("Plano de Recuperação e Resiliência - PRR"), which supports sustainable economic recovery in the context of the post-Covid-19 pandemic, the Portuguese Government announced that the forestry sector now has a total of 615 million euros available for its reform.

Three key reforms were outlined for this sector. First, the transformation of the Landscape of Vulnerable Forest Territories, based on integrated approaches and territorialities foreseen by the Landscape Transformation Program, approved through the Resolution of the Council of Ministers no. 49/2020, of June 24. It is intended to transform the landscape of vulnerable forest territories in order to define a new land use matrix.

The goal is to create a new landscape, which discontinues the areas of pine and eucalyptus, and fosters the introduction of crops that are more profitable for landlords and the territory and, at the same time, make the territory safer, according to the possibilities that territories have for crops.

Secondly, the plan is to Reorganize the Rural Property Registry System and the Land Use and Occupancy Monitoring System.
This reform’s goal is to provide the country with up-to-date and detailed knowledge of the territory, by expanding the simplified cadastral information system and universalizing the Single Office for Buildings (BUPi) platform, and by developing a Land Occupation Monitoring System and reference cartography with high-resolution image coverage.
With this reform, knowing each property, also knowing what is inside each plot, this information is available for owners, investors, and for those who protect the territory.

Finally, it also has de purpose of preventing and fighting rural fires, which includes the implementation of a primary network of fuel management strips and equipping the responsible entities with means and resources that include machinery, equipment, and aerial means for fighting fires (MAIs Forest Program).
In this last phase, thousands of linear kilometers must be opened to interrupt forest masses, to allow firefighters to circulate and stop when necessary.

With all these measures, the Government intends to adopt a non-conformist vision of the fires that ravage the Portuguese territory every year, while at the same time developing and promoting a more sustainable forest.

In a more general tone, the following study is intended to provide readers with an overview of the forestry sector in Portugal. It aims to demonstrate the risks, obligations, organization and capacities of the Portuguese forestry sector.
Forestry activity and its products are of significant economic importance to Portugal due to their contribution to GDP and employment

The sector is mainly supported by national raw materials. More than 60% of Portuguese continental territory is made up of forest areas, 84.2% being private property, 13.8% community lands and only 2% public areas.

Nowadays, the forestry sector is facing important challenges, such as: (i) globalization of the market and economy; (ii) sustainability of resources and the quality of products with consequences in forest management certification and forest products chain-of-custody certification; (iii) greater susceptibility to pests, diseases and fires; and (iv) competition in the use of national forest raw materials.

Despite several potential uses for each forest species, eucalyptus row is used on the pulp and paper industry, pinus pinaster row is used on the wood and furniture industry and cork oak row is typical on the cork industry, for corks, acoustic and thermal insulation material or as fashion accessories.

Portugal imports lumber, veneer, plywood, and firewood into the industry, as well as more than two million cubic meters of logs annually.

If you wish to learn more, please download our PDF down below.


In the current context of the coronavirus (Covid-19) pandemic, it is likely that in the coming months several businesses will be unable to pay their debts due to severe cash-flow shortages. As stated by International Monetary Fund, this crisis is not simply about liquidity, but primarily about solvency at a time when large segments of the global economy are or have recently been in a complete stop.
According to official data, the sectors of tourism, non-food retail, automotive and components, textile/clothing, consumer durables, leisure and cultural activities will be the most affected by the crisis caused by Covid-19 in Portugal.
Other sectors that were developing positively in 2020 will likely suffer a reversal in the upward trend of their activity. Particularly, due to their high weight in GDP, the sectors of construction and materials and real estate activities. In some industries, the consequences will be positive in the very short term, although the sharp deterioration of the economy will probably affect negatively their activity in the upcoming months.

Seeking to reduce the economic impact of Covid-19, the Portuguese Government approved various crisis containment measures – legal, financial, and regulatory – to protect businesses and individuals negatively affected by the Covid-19 pandemic.
Many of these measures directly or indirectly relate to corporate restructuring. Such measures were essentially designed to support financially distressed companies and prevent unnecessary insolvency of companies that in the ordinary course of events would be viable.

During and in the short-medium term after Covid-19, it may be even more relevant to use out-of-court solutions. The special recovery proceeding (Processo Especial de Revitalização or PER) and the extrajudicial recovery scheme (Regime Extrajudicial de Recuperação de Empresas or RERE) allow debtors to start negotiations with their creditors and avoid increasing their distressful financial situation and ultimately their insolvency.

Economic relief measures package

To mitigate the economic effects of the Covid-19 outbreak, the Portuguese Government approved a EUR 9.2 billion incentive package of economic relief measures designed to address actual and future challenges.
The relief package includes:

  1. EUR 5.2 billion euros in fiscal incentives;
  2. EUR 1 billion for Social Security payments and a deferral of some Tax payments, corporate income tax (CIT) and VAT; and
  3. EUR 3 billion in state-backed credit guarantees.

This package includes a procedure called “simplified lay-off”, specifically aimed at keeping employment contracts.
The simplified lay-off may involve temporary suspensions of employment contracts or the reduction of the normal working period.
Companies that choose the simplified lay-off are entitled to a financial support granted by the Social Security corresponding to 70% of 2/3 of the employees’ gross salary up to EUR 1,905, for the duration of 1 month, which may be extended monthly for as long as the obligation to close the company remains (the remaining 30% being borne by the employer). An exceptional and temporary regime of exemption from the payment of Social Security contributions is also available during the simplified lay-off period for employers (and self-employed individuals who are employers).
In a phase of normalization of the business activity (after the outbreak), companies that used the simplified lay-off mechanism may also benefit from an extraordinary financial support corresponding to a maximum of EUR 635 per employee, to support salary payments.

Other measures already in place include financial incentive measures under QREN or Portugal 2020 incentive programs, including, among others:

  1. Acceleration of incentives advance payments or reimbursements;
  2. Extension of the maturity of the loans, provided with no interest;
  3. Eligibility of the expenses incurred with, cancelled or postponed initiatives or events.

The Program “Capitalizar” Financial Facility – Covid-19 was created and gave EUR 400 million to support companies affected by the economic effects of the outbreak.

Until September 30, 2021, a moratorium on loans is also in force, allowing:

  1. A restriction on lenders’ acceleration or termination rights;
  2. An extension of financings with bullet repayments; and
  3. The deferral of all payment obligations.

The insolvency declaration of the landlord, the submission to a special revitalization proceeding or to the extrajudicial company recovery scheme shall not affect the lenders’ rights.

To sum up, the measures taken can be divided into four categories:

  1. Simplified lay-off and extraordinary training plan;
  2. Tax and contributory measures;
  3. Economic incentive measures; and
  4. Moratorium on loans. 

Restructuring procedures

If a company has a sustainable business still, but current debts and additional losses caused by the Covid-19 crisis are preventing it from working normally, there are several extrajudicial and judicial options available before filing for an insolvency proceeding.


PEVE is a proceeding that seeks the judicial homologation of an extrajudicial agreement to ensure the viability of a company, established (out of court) between the company and its creditors.
It was specifically created by Law No. 75/2020 of November 27, 2020, to secure the viability of companies affected by the COVID-19 containment measures, and that out of the pandemic scenario would be financially stable.
It will be in force at least until December 31, 2021, and its lifetime may be further extended by Decree-Law.
PEVE is applicable:

  1. To companies in a difficult economic situation or in imminent or current insolvency, provided that: (i) they are still viable; (ii) their assets exceed their liabilities as of December 31, 2019, and (iii) they are not under PER or insolvency proceedings;
  2. To micro or small companies, even if on December 31, 2019, their assets were not in greater number than their liabilities, provided that: (i) they have received State aid funds that have not yet been repaid, or they are in a restructuring plan under the State aid measures; (ii) they are not in a pending PER or insolvency proceeding;
  3. To companies that have managed to regularize their financial situation through RERE and filed the restructuring agreement in due time, while not having more assets than liabilities on December 31, 2019.


Broadly, insolvency is deemed to exist when the company becomes unable to fulfil the generality of its obligations as they fall due, does not pay one of its major creditors or defaults on an important contract putting at risk the continuation of its business.
If directors are aware that the company became unable to comply with its outstanding obligations, they must file for the insolvency of the company within thirty days from the date they acknowledged this situation.
Due to COVID-19, the directors’ duty to file for insolvency was suspended with effects from March 9, 2020 (the “suspension period”).
The temporary exemption of the duty to file for an insolvency proceeding may well protect managing directors with genuine short-term issues but long-term viable businesses, but it may also have the effect of artificially supporting companies that would otherwise have been unable to sustain their business regardless of the economic circumstances. The removal of liability can be a shield for those who may be careless as to their directors’ duties, adversely impacting the rights of their creditors and employees.
The said exemption does not mean that directors were released from a “business judgment rule” during the COVID-19 pandemic.
They remain obliged to act according with statutory and fiduciary duties such as the duty of care and the duty to act in good faith and in the way most likely to promote the success of the company.

Directors must prevent any actions that might:

  1. Damage or endanger the company’s assets;
  2. Artificially create or worsen liabilities and losses, in particular, by means of damaging transactions; or
  3. Manage the company in a way that would foreseeably lead it to insolvency.

Final remarks
Due to the COVID-19 medium and long-term effects over the economy and companies, a considerable increase of restructuring and insolvency proceedings is expectable along the second semester of 2020, 2021 and 2022, mainly after the end of the economic incentive measures and in case out-of-court arrangements are not fruitful.

In fact, there are three stages:

  1. A first stage, during which companies can take advantage of government support measures to continue operating during the COVID-19 outbreak;
  2. A second stage, immediately after lockdown measures are mitigated and economic activity gradually begins to return to normal, where it is likely that companies seek for negotiating with their creditors to prevent immediate defaults by getting waivers and/or other restructurings of liabilities;
  3. A third stage, where government support measures have not been sufficient to remedy businesses’ cash-flow difficulties and the entities are unable to reach immediate agreements with creditors. In this stage, there will be first an increase on the use of out-of-court recovering mechanisms (RERE and PER) and, if not possible, of insolvency proceedings with investigations into steps taken and transactions entered, and potentially the use of the insolvency administrator’s powers to challenge decisions/transactions and seek to recover value for the benefit of creditors.

Apart from the insolvency-related measures already taken by the Portuguese Government, it could be required to consider additional measures to allow businesses the chance to negotiate with their creditors and reach arrangements without the risk of litigation. 
Moreover, it is needed to redefine the voidable transactions regime in times of COVID-19 and include specific rules to be applied in this context in order to avoid the cashback of transactions carried out by businesses whose financial situation has been deteriorated due to COVID-19, and distinguish this situation from those in which businesses are already insolvent before the pandemic. As this does not reveal to be an easy task, these measures should be subject to temporal limitations (e.g. three or six months) that can be adjusted according to the progress of the pandemic.
Although current and future measures may provide companies with a valuable breathing space, they do not answer the structural economic challenges faced by companies affected by COVID-19: the existence of losses (due to fixed costs and lack of revenues) and the lack of cash-flows.
Changes to out-of-courts remedies (possibly together with a more comprehensive package of legal, financial, and economic measures) may reveal crucial to avoid distressed companies’ situations (previously viable) to be extended over time, ultimately leading to insolvency proceedings.

If you wish to learn more, please download of PDF down bellow. 



Until the first half of the 1990’s, the promotion of electricity and the development of the system’s main infrastructures was handled by state-owned Eletricidade de Portugal, E.P. (“EDP”). From 2006 onwards, a centralized planning of generating centers was replaced by a liberalized marketplace, in which the State acts as a complement to private initiative.
As a result of these changes, the electricity sector was unbundled, and is currently divided into several activities, each one with different operators.

The sector is structured in:

  1. Production;
  2. Transportation;
  3. Distribution;
  4. Transmission; and
  5. Supply.

According to the most recent data of 2020 published by REN – Rede Elétrica Nacional, S.A. (“REN”) the electricity market has been witnessing a decrease in consumption of 2,2% since 2019.

Renewable production was responsible for 56% of consumption, divided between:

  1. Hydroelectric with 24%;
  2. Wind with 23%;
  3. Biomass with 7%; and
  4. Photovoltaic with about 3%.

Non-renewable production supplied 39% of consumption, mainly natural gas, with coal accounting for about 3% of consumption.

Electricity Production

  1. Ordinary production regime: this electricity production regime applies to the production of electricity based on traditional non-renewable sources and large water-producing centers. The production activity of electricity is fully liberalized and subject to a competitive market, since 2007, following the implementation of MIBEL (Iberian Electricity Market). Thus, power plants have started to offer their energy on a common energy platform, integrated at the Iberian level, only requiring the granting of a production license to be issued by DGEG (“Portuguese National Energy Agency”), in accordance with the Electricity System Law. There are only 4 producers included in this regime, which are: Grupo EDP (Produção); ElecGas, S.A.; Tejo Energia - Produção e Distribuição de Energia Eléctrica, S.A.; and Turbogás - Produtora Energética, S.A.
  2. Special production regime: this production regime refers to the activity of production subject to special legal regimes, as is the case with electricity production through cogeneration and endogenous, renewable and non-renewable resources, micro-production, mini-production and production without injection of power into the grid. It is expected that as renewable energy technologies mature and become more competitive, special regime producers will also offer energy produced on the market on similar terms to ordinary producers.

Electricity transmission network

The activity of electricity transmission is carried out through the operation of the national transmission network (RNT) to which corresponds a single concession exercised exclusively and as a public service.
The concession is granted for a period of fifty years, and cannot be transferred, sold or otherwise charged by the concessionaire, without prior authorization from the Government.
The concession includes the planning, construction, operation and maintenance of the RNT, as well as the overall planning and technical management of the National Electric System to ensure the harmonized functioning of its infrastructures, as well as the continuity of service and the security of electricity supply.
The electricity produced in places far from the areas of consumption is delivered to the transmission grid and conducted at very high voltage (EHV), in order to bring large amounts of energy to the various points of the territory without significant losses, thus guaranteeing the supply regardless of the distance to the power plants.
This task is called Global System Management and is carried out by the transmission system operator (TSO), which is REN.
Investment in the transmission network has kept pace with the growth in national consumption. Currently, the transmission network operated by REN has an extension of 8,733 km of lines throughout the country.
REN´s stakeholder structure is diverse. Major stakeholders include:

  1. State Grid Corporation of China (25%);
  2. Oman Oil Company SAOC (12%);
  3. Lazard Asset Management (7%); and
  4. Fidelidade – Companhia de Seguros, S.A. (5,3%), which is owned by Chinese multinational Fosun.

Energy distribution network

The distribution activity is carried out by the exploitation of the infrastructures that, as a whole, make up the National Network of Distribution of Electricity.
Electricity distribution is carried out under public service concessions granted by the Portuguese State. The entities responsible for the distribution must be legally unbundled, not being able to carry out other activities within the sector.
The electricity distribution activity is carried out in the following forms:

  1. Concession of national distribution networks exercised exclusively and under public service in high and medium low voltage (HV and MV);
  2. Concessions of regional distribution networks under public service in low voltage (LV).

The public service concession for national distribution of electricity has been granted to EDP Distribuição – Energia, S.A.

Electricity supply

The supply activity of electricity is fully liberalized and subject to a competitive market, only requiring the granting of a license to be issued by the Portuguese State, in accordance with the Electricity System Law.
Licensed suppliers, in the exercise of their activity, can freely buy and sell electricity and have the right to access the transmission and distribution networks upon payment of access tariffs set by ERSE.

The energy regulator

The Regulatory Entity for Energy Services (ERSE) is the entity responsible for regulating the electricity and natural gas at national level.
ERSE has the responsibility to ensure that operators in the electricity and natural gas sectors comply with public service obligations and other obligations laid down in laws and regulations, as well as in the concession contracts.
Specifically, regarding the electricity sector, ERSE has the following attributions:

  1. Ensure the existence of conditions to meet the demand for electricity efficiently; and
  2. To guarantee concessionaires and licensed entities the existence of conditions that allow them, within an adequate and efficient management, to obtain the economic and financial balance necessary to fulfill the obligations set forth in the concession agreement and in the respective licenses.

This briefing intends to give an overview on the functioning and organization of the different activities of the Portuguese Electricity Sector, as well as on the main players that operate on the market. if you want to find out more, please download our PDF down bellow. 


Energy production. Consumers have been, until recently, seen as mere recipients of energy policies, that do not take an active role in managing their energy consumption.

However, as of 2014, Portugal began to focus on decentralized energy production solutions which, combined with technological innovation on PV, began to enhance the role of the producer-consumer of electricity.
The energy transition has accelerated since 2019, with the integration of European policies for self-consumption of energy and decarbonization, making it possible for consumers to invest more simply and quickly in the production of electricity through renewable energy.
This transition is part of the goal of achieving a 47% share of energy from renewable sources by 2030, which will only be possible with the development of electricity production by consumers.

Producers-consumers are being placed at the center of energy production, assuming themselves as the main figure in the energy transition process.

Currently, there are two models of decentralized energy production in Portugal, in which the consumer has an active role in energy production.

  1. Small Production Units (Unidades de Pequena Produção - "UPP"), which are installations with a maximum connection power of 1 MW, based on a single renewable production technology, with all the electricity produced being sold to the Public Service Electricity Grid (Rede Elétrica de Serviço Público - “RESP").
  2. And the Production Units for Self-Consumption ( Unidade de Produção para Auto-Consumo - "UPAC"), which are electricity production installations, based or not on renewable technologies, whose energy is intended predominantly for self-consumption, with the possibility of selling the surplus to the RESP.

The UPP regime may be found in articles 27º-B, 27º-C and 27º-D of Decree-Law No. 172/2006, of 23 August, and it is only accessible to natural or legal persons.

The electricity produced by the UPP and delivered to the RESP is remunerated, at the producer's option by one of the following mechanisms:

  1. General: where producers sell the electricity produced: (i) on the market, (ii) through bilateral contracting, or (iii) through the market facilitator at a price previously agreed between the parties.
  2. Guaranteed: through a tariff assigned based on a bidding model, in which producers offer discounts to the reference tariff set at €45,00.

The second modality cannot be cumulative with another type of incentive to the production of electricity and is in force for 15 years, after which the producer transits to the general remuneration regime. Access to the guaranteed remuneration scheme is carried out through monthly injection power allocation sessions promoted by DGEG, with an annual quota limit of 20 MW. Producers that have failed to obtain injection capacity in a relevant allocation session are carried over to the next one, and so forth.

The UPAC regime results from Decree-Law No. 162/2019 of 25 October, and it is accessible to:

  1. Individual self-consumers;
  2. Collective, organized in condominiums/apartments/houses located in the same geographical area; industrial, commercial or agricultural units, and other infrastructures; and
  3. Renewable energy communities (RECs).

Excess energy from production for self-consumption may be sold and remunerated in the following ways:

  1. In an organized market or through bilateral contracting, at a price previously agreed between the parties;
  2. Through the market participant against payment of a price freely agreed upon between the parties;
  3. Through the market facilitator, who is subject to the obligation to purchase the energy produced by the producers; and
  4. Through the LRS until the market facilitator license is granted against payment of a market-based fee.

The LRS is only bound to acquire the electricity produced by producers whose authorized injection capacity does not exceed 1 MW.

What does the future hold for small production?

Pursuant to the Paris Agreement, Portugal intends to promote solar energy produced until in the country reaches 1 GW by the end of 2030.
To achieve this goal, it will be important for Portugal to reinforce its measures to promote energy transition and to reinforce its grid infrastructure, so that over the next few years a greater capacity for injecting electricity into the grid can be achieved.

These measures are part of the Government's strategic plans, which include meeting 80% of the country's energy demand from renewable energies by 2030 and electrifying 65% of the economy by 2050.
Regarding decentralized solar photovoltaic energy, the objectives outlined in the National Energy and Climate Plan are for Portugal to have 0.8 GW of installed capacity by 2025 and 2 GW by 2030.
Currently the market presents installation solutions for UPACs in which the receiver of this technology does not assume any financial burden, committing only to self-consume the energy produced and sharing the costs reduction and all or part of the surplus energy being handed over to the installer as compensation for the installation, operation and maintenance of the UPAC.

The Portuguese Government has announced a new law to reinforce renewable energy communities, opening the possibility of managing communities on dynamic management digital platforms and giving differentiated treatment for self-consumption to industrial communities involving electro-intensive consumers. The so-called heavy industry will be allowed to produce offsite energy for self-consumption.

To learn more, please download our PDF down below. 


Corporate social responsibility (CSR) and labor compliance pursue going beyond legal compliance issues. The purpose of both is not simply to fulfil legal expectations, but making the environment and relations with stakeholders beyond mere compliance with the Law.
Although CSR is not a plain concept, CSR is whereby business entities voluntarily incorporate social, environmental and ethical standards into their operations.

CSR is built on three pillars: (i) PROFIT (economic), (ii) PEOPLE (social) and (iii) PLANET (environmental area) – the triple “P”. Labor compliance is included in the PEOPLE, social pillar of CSR.

Labor compliance’s purpose is keeping a safe and healthy work environment and giving all employees a fair treatment by labor control mechanisms:

  1. For employees, by providing for additional control over the employer’s actions, fair compensation, equal opportunities for recruitment and protection against abuse of office and discrimination; and
  2. For employers, by enabling them to hire qualified employees and to require employees to carry out their duties with due diligence.

Successful organizations have in common a commitment to conduct businesses according to high international standards and principles and to build a corporate culture in line with these standards.

Anglo-Saxon systems often distinguish hard law from soft law. ‘Hard law’ generally refers to legal obligations that are binding to the parties involved and which can be legally enforced before a court. The term ‘soft law’ is used to denote agreements, principles and declarations, which are quasi-legal instruments, but do not have any legally binding force, or whose binding force is somewhat weaker than the binding force of traditional law, also referred to as hard law. Labor compliance preferably results from the interaction between hard and soft law instruments.

In Portugal, mandatory obligations and instruments of labor compliance may vary according to the entity type. For instance, State-owned companies or stock exchange listed companies are subject to stricter requirements. This does not, however, mean that other entities may not follow the same compliance standards or even different standards voluntarily applied according to their ethical culture practices.

Some of the mandatory rules are:

  1. Record-keeping of employees' working hours;
  2. Record-keeping of overtime work;
  3. Record-keeping of disciplinary sanctions; and
  4. Preparation and display of employees' holiday schedule.

Detailed attention to labor compliance matters on non-discrimination, equal pay, anti-harassment, close the gap for women and minorities, fight against corruption and related offences, have been growing with major changes brought by local laws.
To follow these changes, employers are compelled to apply a set of policies, procedures, and actions, of which:

  1. Code of Ethics and Conduct;
  2. Anti-Harassment Policy;
  3. Gender Equality Plan;
  4. Gender Pay Gap Report;
  5. Employees’ Training Plan; and
  6. Corruption Risk Management Plan.

Some labor compliace tips that your company may follow are:

  1. Create a code of ethics and conduct with plain and clear language;
  2.  Implement strong policies and plans, e.g., on gender equality, non-harassement, pay gap;
  3. Promote awareness amonsgt employees about the importance of complying with the standards;
  4. Create internal reporting channels;
  5. Regularly monitor compliance programs to review labor-related risks;
  6. Remind your employees that the example comes from the top management; and
  7. Make it clear that the company is not involved in ehtically doubtful practices.

If you want to read more, please click on the link to our PDF down bellow. 


"Enforcement proceeding" is a sequence of acts and formalities designed to promote the forced recovery of a claim.

There are three different types of enforcement proceedings, depending on the purpose: 

  1. Payment of an amount (this is the case for most enforcement proceedings);
  2. Delivery of a certain thing; or
  3. Provision of a fact;

To impose an enforcement procedure against the debtor, the creditor must have an enforcement title, in which the essential elements of the debt are defined:

  1. Amount;
  2. Due date;
  3. Identity of the creditor and debtor;
  4. Others.

The law provides various types of enforcement titles, including:

  1. Cout decisions ordering the debtor to pay a certain sum;
  2. Authenticated documents acknowledging a debt;
  3. Bills of exchange.
The enforcement proceeding starts with the filing of an “initial request” on “Citius” - an online platform accessible only to lawyers, courts and enforcement agents. After receiving the request, the court appoints the enforcement agent. 
  1. In the common enforcement procedure, the debtor is summoned to oppose to the claim before the seizing of assets;
  2. In the summary enforcement procedure, the enforcement agent seizes the debtor’s assets immediately after the filing of the initial request. The debtor is only summoned after the seizure of the assets, to simultaneously oppose the claim and the seizure.

After the attachment of the debtor’s assets, the enforcement agent summons:

  1. The debtor’s spouse;
  2. The debtor’s creditors holding a guarantee in rem;
  3. The Tax Authority and the Social Security.

Within 15 days from the summon date, creditors holding a guarantee in rem on the seized assets, the Tax Authority and the Social Security may lodge their claims to the court.
All the parties in the enforcement proceeding – initial and subsequent creditors and the debtor – may challenge all the claims presented in this phase.
The court will then verify, admit or reject and rank the claims.
The sale of the seized assets can happen in one of the following ways:

  1. Presentation of proposals in closed letters;
  2. Direct sale to persons or entities with a right to acquire the assets;
  3. Sale by auction;
  4. Sale by private negotiation;
  5. Sale in a public depository or similar; or
  6. Sale in regulated markets.

This paper intends to briefly explain the various stages of the enforcement proceedings in Portugal, with special emphasis on the enforcement proceedings for payment of an amount.


The General Data Protection Regulation is directly applicable in all EU Member States since May 25, 2018 and it has certainly been the most significant global development in data protection laws across all EU Member States since the "Data Protection Directive".
The GDPR has a global scope, as businesses based outside the EU that offer goods or services to individuals in the EU may be required to comply with the GDPR.
The risk of fines up to 4% of annual worldwide turnover or €20 million is surely a strong incentive for companies to comply with the GDPR.
For entities to better comply with the GDPR, we present and analize a seven step plan detailing the main aspects of the GDPR that companies need to take.
Some of these steps include: (i) maping all your data by organizing data audits within your company's departments in order to understand the personal data held by your company and how your company can manage and protect data; (ii) reviewing your privacy policies, individuals’ consents, contracts throught the procedures to confirm whether individuals make use of their privacy rights; (iii) appointing a single DPO or making individual appointments for each legal entity and/or jurisdiction; (iv) training your employees and staring by reviewing and updating your internal policies and technical measures with your company's IT team to fulfil the privacy “by design” and the privacy “by default”. And, of course, reviewing your security measures, as well as (v) reviewing your current international data transfers and understanding if they will be justified under the GDPR. Consider adopting a data transfer key-solution with your legal team.
These are just some of the measures we propose and carefully explain in this study to better help your company fulfill the GDPR's requirements. 


In the current context of the coronavirus disease 2019 (Covid-19), several businesses face the possibility of not being able to pay their debts in the short or medium term, because of cash-flow problems generated by the worldwide implementation of restrictive pandemic response measures.

As stated by the International Monetary Fund, this crisis is not simply about liquidity, but primarily about solvency, at a time when large segments of the global economy have come to a complete stop.

Tourism, non-food retail, automotive and components, textile/clothing, consumer durables and leisure and cultural activities are the most affected sectors. Other sectors, such as construction and real estate, which were developing positively in 2019 and in the beginning of 2020, have also suffer a reversal in the previously upward trend of their activity, namely from the second trimester of 2020 onwards.

To mitigate the economic impact of Covid-19, the Portuguese Government approved a set of legal, financial, and regulatory measures to protect businesses and individuals negatively affected by the Covid-19 pandemic.
The measures implemented can be generally divided into four categories:

(i) Financial measures – moratorium on credits and financial incentives;

(ii) Tax and contributory measures;

(iii) Employment measures – simplified lay-off regime and extraordinary training plan;

(iv) Real estate measures – moratorium on rents.

A summary of these measures is detailed below.


1.1. Moratorium on loans
  • Prohibition to cancel, in whole or in part, the credit facilities and loans granted on or before March 27, 2020. Banks and other financing entities cannot refuse financing already approved before that date;
  • Extension of bullet loans in force on or before March 27, 2020, including interest, guarantees or any other associated costs;
  • For other loans in force on or before March 27, 2020 it is suspended the payment of capital, rents, guarantees. The contractual payment plan for the instalments of capital, rent, interest, commissions, and other charges is automatically extended for a period identical to that of the suspension. There are no charges other than those that may arise from the variability of the contracted reference interest rate.
Who can benefit?

SMEs with headquarters and economic activity in Portugal, if they are not in one of the following situations:

  • In default to financial institutions for more than 90 days on January 1, 2021 and not meeting the materiality threshold established in the Bank of Portugal’s Notice 2/2019 and Regulation (EU) 2018/1845 of the European Central Bank of 21 November 2018;
  • Suspension or termination of other payments;
  • Insolvency;
  • Subject to enforcement proceedings;
  • Debt to Tax Authority or to Social Security over EUR 5,000.00, in the absence of a negotiation process for debt regularization.

The sole owners of businesses, charities and non-profit organizations may also be eligible for loan moratorium measures, if they have their home office in Portugal.

Credit operations granted by credit institutions, financing, leasing, factoring and mutual guarantee companies, as well as credit institution branches operating in Portugal are covered by the financial measures described.


The deadline for joining the moratorium was 31 March 2021. The duration of the moratoriums has been extended but each moratorium cannot last more than nine months following the date of the adhesion communication.

Where can you read more about these measures?

Covid-19: Moratorium on credits

1.2. Financial incentive programs
  • According to IAPMEI, the instalments of refundable incentives due until September 30, 2020 can be deferred for 12 months, without interest charges or any other penalty. This deferment is also applicable to future instalments regarding settlement plans, within the scope of QREN and QCAIII incentive system projects and to the reimbursement plans established until the closing of these programs projects;
  • Eligibility of the expenses incurred with cancelled or postponed initiatives or events presented in projects approved by Portugal 2020 Program and other funding programs;
  • Evaluation of the negative impacts of Covid-19 in case of insufficient enforcement of actions or objectives established in the Portugal 2020 Program benefit agreements;
  • Creation of “Capitalizar – Covid-19” credit line, worth EUR 400 million, to support companies that have seen their activity affected by the pandemic. Capitalizar – Covid-19 is aimed at companies with a decreasing of sales by at least 20% in the 60 days preceding the submission of the application to the line of credit (compared to the same period last year).
  • The “Programa Apoiar”, which consists of cash assistance in the form of a non-refundable subsidy, was also amended to: (i) Reinforce the support to entities with a turnover breakdown higher than 50% (''Apoiar + Simples''); (ii) Raise the maximum support limits to EUR 7,500 for individual entrepreneurs, EUR 18,750 for micro enterprises, EUR 103,125 for small enterprises and EUR 253,125 for medium and large enterprises; (iii) Include, as beneficiaries, businesses directly affected by the mandatory suspension and closure of their facilities and establishments, such as the case of tourism, events organization and catering sectors; (iv) Include as eligible entities to apply to the incentive programs "Apoiar + Simples" and “Apoiar Rendas", the individual entrepreneurs without organized accounts and regardless of hiring employees, and extent the scope of the eligible contracts to contracts whose purpose include the use/exploitation of real estate other than lease contracts.
  • Creation of the COVID-19 liquidity support line for micro and small tourism businesses, worth EUR 140 million, to include, namely, land transport activities that prove to be mainly intended for tourism.
Who can benefit?
  • Companies that have their headquarters and carry out their economic activity in Portugal. Companies with debts to the Tax Authority or the Social Security are not eligible;

  • The credit lines are also available for sectors strongly affected by the Covid-19 pandemic, such as tourism, restauration, and the industrial sector, for instance, textiles and footwear.

Depends on the incentive program.

2. TAX

2.1. Reimbursement of special payments on account

Full refund of special payments on account regarding the tax periods between 2014 and 2019, not deduced until the tax return for 2019.

Who can benefit?

Micro, small, and medium companies and cooperatives.


Until the end of January 2021 or until the end of the sixth month following the deadline for submitting the periodic tax return (in which case the 2019 tax period will be different from the calendar year).

2.2. Obligation to submit tax return statement form number 22 (Corporate Income Tax – “CIT”)

The obligations to submit the tax return statement form number 22 for the 2020 tax period and respective payment may be fulfilled until 30 June 2021.

Who can benefit?

Taxpayers subject to Corporate Income Tax.

2.3. Compliance with IES/Annual tax declaration filing

From January 1, 2021, the IES/annual tax declaration can be submitted through the Taxpayers Website.

Who can benefit?

All taxpayers who have an obligation to submit IES/Annual tax declaration.

2.4. Payment in instalments of PIT and CIT debts

PIT debts equal to or less than EUR 5,000.00 and CIT debts equal to or less than EUR 10,000.00 can be paid in installments, without any additional guarantee from the taxpayer.

  • In the voluntary payment phase;
  • If there are no other debts to the Tax Authority; and
  • If the debt is due until December 31, 2020.
Who can benefit?

Taxpayers with PIT debts equal to or less than EUR 5,000.00, and taxpayers with CIT debts equal or less than EUR 10,000.00.

2.5. Deferral of submission and payment of periodic VAT returns

Monthly VAT declarations to be submitted in May, June and July 2021, and quarterly VAT declarations to be submitted in May 2021, can be filed until the 20th of each month, and the corresponding payment can be made until the 25th of each month.

Who can benefit?

All taxable persons with obligation to submit periodic VAT declarations.

2.6. Deferral of VAT delivery in the first semester of 2021

In the first semester of 2021, the VAT payment in the monthly regime can take place until the end of the period for voluntary payment or in three- or six-monthly instalments equal to or greater than EUR 25,00, without interest or collateral.

Who can benefit?


  • With a turnover of up to 2 million euros, computed in 2019;

  • Who started or restarted their activity on or after January 1, 2020;

  • With a turnover decrease of at least 25% in the monthly average of the full 2020 calendar, compared to the same period of the previous year


In the first half of 2021, the quarterly VAT payment can be made until the end of the period for voluntary payment or in three- or six-monthly instalments equal to or greater than EUR 25,00, without interest or collaterals.

Who can benefit?

Taxpayers covered by the quarterly regime.

2.7. Cessation of the Suspension of Deadlines in Tax Justice

Cessation of the regime of suspension of procedural deadlines, namely in the diligences to be carried out in the scope of processes and procedures which are underway in the judicial courts, administrative and tax courts, Constitutional Court, Court of Auditors and other jurisdictional bodies, arbitration courts, Public Prosecutor's Office, justice of the peace courts, alternative dispute resolution entities and tax enforcement bodies.

Who can benefit?

All taxable.

2.8. VAT Refunds

Entitlement to a refund of 50% of the VAT incurred and not deductible for expenses regarding the organization of congresses, fairs, exhibitions, seminars, conferences, and similar activities.

Who can benefit?

Until December 31, 2021.

Where can you read more about these measures?

Covid-19: Fiscal support measures

Covid-19: Moratorium on bank credits


3.1. Simplified lay-off (extraordinary support for keeping employment contracts)
Who can benefit?

Employers (private employers), which have no debts before the Tax Authority or the Social Security and meet one of the following conditions: suspension of activities and the total or partial closure of the company or the establishment resulting from a legal or administrative measure; total or partial stop page of the activity of the company or establishment exceeding 40% in the month prior to the application, resulting in the interruption of global supply chains, or suspension or cancellation and orders, in situations where more than half of the previous year's invoicing has been made to activities or sectors currently suspended/terminated by legislative or administrative determination of a government source.

For situations where employers access the simplified lay-off, members and statutory bodies should use support to maintain the employment contract, provided that they comply with the following requirements:

  • Exercise of management functions;
  • Existence of remuneration statements and records of social security contributions; and
  • Have employees in charge.
  • Financial support equivalent to 70% of 2/3 of the normal gross remuneration, up to EUR 1,905; the remaining 30% are taken by the employer;
  • This financial support can be added by a training scholarship, with a maximum amount of EUR 131,64 (half of which to be granted to the employee and the remaining to the employer);
  • Allocation of retributive compensation to the employee corresponding to 100% of his/her ordinary gross remuneration, with a limit of 3 times the statutory minimum monthly salary (3 x EUR 635);
  • During the application of the simplified lay off, the employer is exempt from payment of social security contributions on the part of the employer for all remuneration (remuneration for work and retaxing compensation) paid to employees covered by the support, maintaining the contribution of 11% for the employee.
Employer's duties

During the lay-off period and in the following 60 days, the employer may not terminate employment contracts under the arrangements of collective dismissal or dismissal for termination of the job in relation to any employees.

The employer keeps the duty of punctual performance of the retributive obligations due to employees and may not distribute dividends during the term of the obligations arising from the granting of the incentive, in any form, in particular as a withdrawal on account.


Up to one month. It may be extended monthly while remaining the mandatory closure of the activity.

3.2. Extraordinary professional training measures
Who can benefit?

Companies facing a business crisis and not benefiting from the simplified lay-off.


The financial support is granted depending on the training hours for each employee and is limited to 50% of the employee’s gross salary with a maximum limit of EUR 635.

Employers who have used support for the training of employees, and whose plan has been approved by the IEFP, but not initiated due to the suspension of face-to-face training activities, may initiate them no more than 5 working days after the end of the suspension.



3.3. Extraordinary incentive to normalize the activity
Who can benefit?

Companies restarting their activity, if they have benefited from the simplified lay-off scheme or the extraordinary training plan.

  • Support in the amount of a statutory minimum monthly salary (EUR 635), paid at once, per employee covered by the simplified lay-off or the extraordinary training plan;
  • Support in the amount of two statutory minimum monthly salaries (EUR 1,270), paid in two instalments over six months, per employee covered by the simplified lay-off or extraordinary training plan;
  • Partial exemption of 50% of the payment of social security contributions borne by the employer in addition to the inventive of EUR 1,270;
  • Full exemption from contributions by companies for two months provided that fixed-term employment contracts are signed within three months after the incentive grant, and from which result a net increase of the employment level;


No deadline. Companies may request the incentive before or after the end of the simplified lay-off or the extraordinary training plan.

3.4. Extraordinary support for the progressive resumption of activity in companies in business crisis situations
Who can access it?

Employers (private companies) with an invoicing breakdown equal to or higher than 25% in a situation of business crisis and that have no debts before the Social Security and the Tax Authority; self-employed persons who are employers; and members of statutory bodies.

  • T-Temporary reduction of the normal working period of employees, and members of the statutory bodies with management functions and included in the company’s payroll statements;
  • According to the invoicing breakdown, the normal working period may be reduced up to the following limits: (i) Invoicing breakdown => 25%, the normal working period may be reduced up to 33%; (ii) Invoicing breakdown => 40%, the normal working period may be reduced up to 40%; (iii) Invoicing breakdown => 60%, the normal working period may be reduced up to 60%; (iv) In the case of an employer with an invoicing breakdown => 75%, the reduction of the PNT, per employee, can be a maximum of: (100% in the middle of July and August 2021, up to a limit of 75% of employees, or, alternatively, up to 75%, and in this case may apply the reduction to all employees at their service;

    During the month of July and August, if the company's activity falls within the sectors of bars, discos, recreational parks and the supply or assembly of events, with companies covered by ordinance of the members of the Government responsible for the areas of the economy, finance and social security, namely through the respective Portuguese Classification of Economic Activities, reduce the PNT up to a maximum of 100%, in this case it may apply the reduction to all employees at its service. (v) Invoicing breakdown =>70%, the normal working period may be reduced from 75% to 100%.

  • Financial support to employers for exclusively paying compensation to employees covered by a reduction of their normal working period. This financial support corresponds to the missing hours in the amount of 4/5 of the gross salary;
  • Payment of 70% of compensation by the Social Security. The remaining 30% is to be borne by the employer;
  • Payment of 100% of compensation by the Social Security, in situations where the reduction of the normal working period exceeds 60% and the invoicing breakdown is higher than 75%;
  • Additional support for companies with an invoicing breakdown equal to or higher than 75%. The Social Security bears 35% of the normal gross salary in consideration for the hours worked by and due to each employee covered by the reduction of the normal working period;
  • Increase in compensation to ensure the employee's normal gross salary up to EUR 1,995.
  • Partial exemption from payment of Social Security contributions by the employer as to employees covered by the incentive scheme.
  • Employers in the tourism and culture sector apply to specific rules according to the billing breach: (i) For situations of Employer a with a break in the invoicing of less than 75%, and which, as a result, bears part of the retaxing compensation corresponding to the costs of unworked hours, the right is granted the exemption of the payment of contributions to its charge (as an employer); (ii) For situations of Employer with break age and billing equal to or greater than 75% is granted the right to partial exemption of 50% of the payment of contributions to your charge (as employer).

In both situations (i and ii), the exemption concerns only the employees concerned and is calculated on the value of the retaxing compensation.

Employer's duties

During the period of reduction of the normal working period, the employer must make the payment of the retaxing compensation on time.

The employer may not increase the remuneration or other equity benefit attributed to members of corporate bodies, while social security participates in the retributive compensation to be attributed to employees.

During the reduction period, as well as within the following 60 days, the employer may not:

  • To terminate employment contracts under collective dismissal, dismissal for termination of the job or dismissal for inadaptation;
  • Distribute dividends in any form, in particular as a withdrawal on account.

Micro-enterprises benefiting from simplified support for the maintenance of jobs may not terminate, during the period of granting support, as well as within the following 90 days, collective redundancy employment contracts, dismissal for termination of the job and dismissal for inadaptation, or initiate their procedures.


One calendar month. Month-to-month extension until September 30, 2021.

3.5. New incentive to normalize business activity
Who can benefit

Employers who meet the following assumptions:

  • They have requested simplified lay-off or support for the gradual resumption of activity;
  • They requested one of the support in the first quarter of 2021.
  • Extraordinary incentive to standardize the activity allocated by an employee covered by one of the support measures (simplified lay-off or support for the progressive resumption of activity);
  • Number of employees of the company measured by reference to the month prior to the submission of the application;
  • Limit on the number of employees: employees covered by the simplified lay-off or support for progressive recovery.
  • Benefit for companies can be one of two: (i) Employer, who requires support by 31 May 2021, benefits a value of 2 minimum monthly salaries guaranteed, in a phased manner over six months, with reference to the number of employees covered. This support is added to the exemption from payment of Social Security contributions borne by the employer during the first two months of incentive; Payment of the second installment is conditional on the fulfillment of the legal obligations to which the Employer is obliged for the purposes of the new incentive; (ii) Employer, who requires support by 31 May 2021, benefits a value of 2 minimum monthly salaries guaranteed, in a phased manner over six months, with reference to the number of employees covered. This support is added to the exemption from payment of Social Security contributions borne by the employer during the first two months of incentive;
Employer's duties

Employers receiving support are obliged to:

  • Maintenance, proven, of the regularization of contributory and tax situations;
  • Prohibition of assignment, during the period of granting support and within 90 days of employment contracts by: (i) collective dismissal; (ii) dismissal for termination of the job; and (iii) dismissal for inadaptation;
  • Prohibition of initiating procedures and any of the dismissals (collective, redundancy and inadaptation);
  • Maintenance of the level of employment in the month preceding the application for standardization support, during the period of granting the support and within 90 days.

The new support cannot be cumulated at the same time with:

  • Simplified lay-off;
  • Extraordinary support for the gradual resumption of activity; and
  • Traditional lay-off.
Form of calculation
  • The new incentive provides a set of cumulative rules to be applied for the purposes of calculating the number of employees to be paid the incentive: (i) the number of employees of the employer in the calendar month preceding the submission of the application for the new incentive ; (ii) the maximum limit of employees covered by the new support: employees who have benefited from support for the maintenance of employment contracts or extraordinary support for recovery in the last 30 consecutive days of its application, taking into account the number of employees in the last month in which the Employer received one of these support; and (iii) employees must have been covered by one of those supports in 2021 at least 30 days until 15 May.
How to apply for the new incentive
  • Employer must request the new incentive through its own form available on the IEFP website;
  • Employer must add to the form a set of necessary documents: (i) Declaration of non-existence of debt or authorization for online consultation of the contributory and tax situation before social security and the Tax and Customs Authority (AT); and (ii) Acceptance term, with indication of IBAN, according to a model made available by the IEFP, I. P.
  • The application must be submitted after the last day of application of support for the maintenance of the employment contract or extraordinary support, in accordance with the situation applicable to the Employer.
Employer's additional rights

The Employer who accesses the support has the possibility to give up support, after three months, and to request after that support for the gradual resumption of activity.


The Employer who gives up the support does not need to return the amounts already received but is only entitled to the incentive in the amount of a minimum monthly remuneration guaranteed by work and exemption and 50% of social security contributions in the first two months of the incentive.

For the purposes of verifying the duty to maintain the level of employment, they do not take into account situations in which the variation in the level of employment results from the transfer of establishment, part of the establishment or equivalent, where at the same time there is a guarantee, legal or conventional, of the maintenance by the purchaser of the contract of employment transmitted

3.6. Support for the reduction of economic activity of self-employed
Who can benefit

Self-employed workers whose activities are framed within the tourism, culture, and events and shows sectors can benefit from the economic activity reduction support until August 31st.

In order to access the support, they must be in a situation of total cessation of activity or have a drop in invoicing of more than 40%.
The drop in invoicing in the period of 30 days prior to the request, with reference to the monthly average of the two months prior to this period, or in relation to the same period of the previous year or even, for those who have started activity less than 12 months ago, the average of this period. The employee must hold a certificate from a certified accountant attesting to this.

Where can you read more about these measures?

Covid-19: New benefits for employees and businesses

Covid-19: the return of mandatory remote work

Covid-19: “AERP” Flexibility

Covid 19: New "Simplified Lay-Off"

Covid-19: Absence from work

Covid-19: New extraordinary measures

Covid-19: Fast track lay-off

Covid-19: Privacy in time of pandemic – taking employees’ temperatures?

Covid-19: New social protection policies

Covid-19: New measures to support resuming work

Covid-19: Simplified Lay-off and incentives to normalize the activity

Covid-19: Extraordinary financial incentive to normalize business activity


4.1. Termination of lease contracts
  • Suspension of early termination of leases by landlords;
  • Suspension of the expiry of leases at the end of the relevant period (unless accepted by the tenants);
  • Suspension of cancellations and oppositions to the renewal of leases made by the landlord;
  • Suspension of foreclosures of mortgages on the personal and permanent residence of taxable individuals.
Who can benefit?

Tenants of commercial lease agreements and housing lease agreements.


Until June 30, 2021, at most.

4.2. Payment of rents

Deferral of the rent payment schedule.

Who can benefit?

Tenants of housing leases who meet the following conditions:

  • A decrease of more than 20% in the tenant's household income compared to February 2020, the previous month, or the same period of the previous year; and/or
  • A household effort rate of 35% or more for the tenant, based on the percentage of the income of all members in the household.

Tenants of non-residential rental contracts under the following conditions:

  • Closure or restriction of activity due to Covid-19 mitigation and containment measures; and
  • The debt settlement period will begin on January 1, 2022 and will last until December 31, 2023. The regularization will be made in 24 successive instalments, paid simultaneously with the rent of the current month.

Until July 1, 2021, at most.

4.3. Financial Aid
  • Outright grants;
  • Credit lines.
Who can benefit?

Tenants of housing leases:

Interest-free loan to cover the payment of rent due up to a maximum effort rate of 35%, granted by the Portuguese Institute for Housing and Urban Rehabilitation (IHRU – Instituto da Habitação e da Reabilitação Urbana).

Landlords of housing leases:

Interest-free loan to compensate the monthly rent, due and unpaid, whenever there is a drop of more than 20% in the landlord's household income compared to the previous month or the same period of the previous year, paid by IHRU.

Tenants of commercial lease contracts:

  • Outright grants of 30% of the rent up to EUR1,200 per month, for tenants with a turnover decrease between 25% and 40% in 2020;
  • Outright grants of 50% of the rent up to EUR 2,000 per month, for tenants with a turnover decrease higher than 40% in 2020.

Micro, small and medium-sized enterprises in sectors particularly affected by Covid-19 mitigation measures:

  • Cash support through an outright grant of 30% of the rent up to EUR1,200 per month, and by establishment, for 6 months, for tenants with a turnover decrease between 25% and 40%;
  • Outright grants of 50% of the rent up to EUR 2,000 per month, and by establishment, for 6 months, for tenants with a turnover decrease higher than 40%.

Tenants of shopping centers lease contracts:

  • Proportional reduction of the fixed or minimum monthly remuneration due, up to a limit of 50% of the monthly remuneration, when such establishments have a decrease in their monthly turnover compared to the turnover of the same month of 2019 or, if not possible, the average turnover of the last six months preceding the first declaration of the state of emergency, or for a shorter period, if applicable.

Variable depending on the financial support.

Where can you read more about these measures?

Covid-19: payment of rents may be postponed
Covid-19: lease agreements regulatory update

Portugal has been one of the most enthusiastic countries regarding renewable energies.
Investment in solar projects in Portugal is expected to ramp up in the next decade and the country will most likely reach its target of 31% of renewable energy consumption in 2030.
Considering the expected development of photovoltaic projects in Portugal, this guide provides an overview of the relevant project licensing proceedings for the construction and operation of the power plants.
To learn more about the Portuguese investment on solar projects read the pdf.