Summary:
Decree-Law 203/2003 of 10 September 2003 sets a common legal framework for foreign investment contracts ending with differences given to foreign and national investment
Aiming to adapt the Portuguese legal system to the recent EU and OCDE guidelines, that point at non discrimination of investment for its nationality, Decree-Law 203/2003 of 10 September 2003 sets a common legal framework for foreign investments contracts in Portugal, ending with the distinction between foreign and national investment.
The provisions of this new decree establish a special support and incentives contracting framework. It will be exclusively applied to major business investments of special interest to the Portuguese economy and
(i) exceeding 25 millions euros, or
(ii) when such volume is not reached, such investments are initiative of companies generating an annual turnover higher than 75 millions euros or of a non-commercial entity with an annual budget higher than 40 millions euros.
The Portuguese Investment Agency – "Agência Portuguesa para o Investimento" (API), incorporated by Decree-Law 225/2002 of 30 October 2002 is the entity responsible for, on the behalf of the State, receiving, analyzing, negotiating, contracting and follow up major investment projects, being exclusively responsible for the all required assessment.
While entering upon the investment contracts incentives may be awarded by the State, mainly financial incentives, tax benefits and part- financing of the project through venture capital investments.
Exceptionally, specific counterpart may include share of vocational training costs; a compensation for cost caused by shortage of specialized professionals; a compensation for costs due to distance from knowledge and innovation sources; and the more appealing undertaking of public investment in infrastructures.
This new framework makes possible direct negotiation between investors and a sole Government representative, even if investment contracts are subject to approval by joint order of the Minister of Economy and the ministers whose sector is involved, or by Council of Ministers resolution should any tax benefit be awarded.
© Macedo Vitorino e Associados – August 2003
This information is provided for general purposes only and does not constitute professional advice. If you have any question on a matter of Portuguese law you should contact a lawyer registered to practice law in Portugal. If you are a client of Macedo Vitorino e Associados, you may contact us directly at mva@macedovitorino.com or your usual contact partner.
