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Portugal

Paul Hastings in collaboration withGarrigues
Liquidity Measures
Reliefs
Other

Liquidity Measures

Credit lines for treasury support

Government Measure

Credit line of up to €400m for treasury support under the Capitalizar COVID-19 Programme preferentially for SMEs1 not covered by the specific credit lines below.

Credit lines for treasury support of companies in the following specific economic sectors:

  • €60m (tourism sector—microenterprises);
  • €600m (restaurant business);
  • €200m (travel agencies, tourist entertainment, and event organization companies);
  • €900m (touristic developments and accommodation);
  • €4.5b (credit line applicable to all companies, irrespective of the economic sector in which they are engaged, and covers, inter alia, textile industry, clothing and footwear, trade and services, transport, real estate, construction, extractive and manufacturing industries, mining and wood industry)2.

These credit lines have a grace period of one year and the amounts borrowed can be repaid in three to four years.

1This credit line is also available to microenterprises. The category of micro, small and medium-sized enterprises (SMEs) is made up of companies which employ fewer than 250 persons and which have an annual turnover not exceeding €50m, and/or a total annual balance sheet not exceeding €43m.

2Following the decision of the European Commission of 4 April 2020 authorising the extension of the amount of credit lines with a State guarantee up to €13b, the Portuguese Government has decided to extend access to the credit line to all economic sectors.

 
Eligibility

Companies registered and operating in Portugal that have no debts towards financial institutions, the Tax Authority and the Social Security as at the date of application.

The credit line for microenterprises in the tourism sector requires evidencing the negative impact of the COVID-19 outbreak on the companies’ activities by means of a declaration with the application.

These credit lines generally require maintaining the number of employees existing as at 1 February 2020 until at least 31 December 2020.

 
Supervising Authority

Ministry of State, Economy and Digital Transition (Ministério de Estado, da Economia e da Transição Digital)

With the exception of the applications for the credit line for microenterprises in the tourism sector, applications should to be made by the companies directly to adhering banks, which include, inter alia, Abanca, Bankinter, BBVA, BCP, BIC, BPI, Caixa Central de Crédito Agrícola Mútuo, CGD, Montepio, Novo Banco, and Santander Totta.

Applications for the credit line for microenterprises in the tourism sector shall be submitted on the website of Turismo de Portugal, I.P., through the form available in the Investment Project Management System - SGPI

In respect of the credit line Capitalizar COVID-19, applications shall be submitted until 31 May 2020.

Further details on these credit lines are available at "Portal do Financiamento”

 
Availability

From 13 March 2020

Specific financial support measures for Portuguese start-ups

Government Measure
  • Creation of the Startup RH COVID-19, a €8 million relief fund for start-ups that can help up to a maximum of 10 employees per start-up);
  • Extension of the Start-up Voucher (i.e. a 3-month extension of the benefit already awarded (€2,075 per employee));
  • Creation of the Vale Incubação – COVID-19, a financial support for start-ups with less than 5 years of existence, through the hiring of incubation services based on a non-refundable incentive in the amount of €1,500;
  • Creation of “mezzanine” funding for start-ups through a loan convertible into share capital (shareholder loans), after 12 months, applying a discount rate to avoid dilution of promoters (average investment tickets between €50k and €100k per start-up);
  • Launch of the COVID-19 - Portugal Ventures for investments in start-ups, with tickets from €50k;
  • Modification of the already existing fund Fundo 200M, which is a co-investment with private investors in Portuguese start-ups and scale-ups, with the minimum public investment of €500k and the maximum of €5m;
  • Modification of the already existing fund Fundo Coinvestimento para a Inovação Social, which is a co-investment with private investors in companies with innovative and social impact projects, with the minimum public investment of €50,000 and the maximum of €2,5 million.
 
Eligibility

The financial support Startup RH COVID-19 is available for innovative companies incorporated and operating in Portugal for less than 5 years, with no tax or social security debts, that are currently not benefiting from the layoff regime and undertake not to dismiss any employee until 31 December 2020 and that are:

  • Registered in the Startup Hub mapping; or
  • Incubated in one of the incubators Network of Incubators (Rede Nacional de Incubadoras); or
  • Invested by business angels or venture capitalists accredited by the Portuguese Agency for Competitiveness and Innovation (IAPMEI – Agência para a Competitividade e Inovação, I.P.) (“IAPMET”) or the Development Finance Institution (Instituição Financeira de Desenvolvimento); or
  • Recognized by the Portuguese National Innovation Agency (Agência Nacional de Inovação).

The financial support Start-up Voucher is available for Portuguese start-ups with start-up voucher already granted.

The financial support Vale Incubação – COVID-19 is available for companies incorporated and operating in Portugal that undertake not to dismiss any employee until 31 December 2020 and are registered in the Portuguese National Network of Incubators (Rede Nacional de Incubadoras).

The “mezzanine” funding for start-ups is available for innovative companies incorporated and operating in Portugal and that have been in existence for over 1 year and less than 8 years, with no tax or social security debts, that are registered in the portal Startup Hub, undertake not to dismiss any employee until 31 December 2020, provide evidence of the negative impacts of the COVID-19 outbreak on their economic activity and are:

  • Registered in the Startup Hub mapping; or
  • Incubated in one of the incubators belonging to the Portuguese National Network of Incubators (Rede Nacional de Incubadoras); or
  • Invested by business angels or venture capitalists accredited by the IAPMEI or the Development Finance Institution (Instituição Financeira de Desenvolvimento); or
  • Recognized by the Portuguese National Innovation Agency (Agência Nacional de Inovação).

This “mezzanine” funding is preferably available for businesses engaged in circular economy or energy efficiency and shall be operationalized through Portugal Ventures. It is also required (i) previous funding from business angels, strategic partners, founders or incentive systems; (ii) past involvement in technology transfer processes; and (iii) assigning a mentor to monitor the company’s activity for a maximum period of 12 months (cost included in the investment).

The credit line COVID-19 - Portugal Ventures is available for SMEs that fulfil the requirements of the venture capital credit line Linha de Financiamento a Fundos de Capital de Risco.

The investment from Fundo 200M is available for technological companies incorporated and operating in Portugal that have qualified and experienced private investors willing to invest at least €500k in the companies. Further information is available at “200M”.

The investment from Fundo Coinvestimento para a Inovação Social is available for companies validated by the Portuguese Social Innovation Entity (Estrutura de Missão Portugal Inovação Social) as having impact projects based in Portugal that have qualified and experienced private investors willing to invest at least €50k in the companies. Further information is available at “FIS”.

 
Supervising Authority

Ministry of State, Economy and Digital Transition (Ministério de Estado, da Economia e da Transição Digital)

Applications relating to investment operations under the Fundo 200M shall be submitted by co-investors, through an electronic form available at “200M”.

Applications relating to investment operations under the Fundo coinvestimento para a inovação social shall be submitted by co-investors, through an electronic form available at “FIS”.

 
Availability

From 21 April 2020

New tenders under the incentive scheme of Portugal 2020

Government Measure
  • “Inovação Produtiva COVID-19” (€46m) for companies (SMEs and large enterprises); and
  • I&D Empresas - COVID-19” (€23m) for companies and entities part of the National Investigation and Innovation System (Sistema Nacional de I&I).

Both tenders were created to support, on a non-refundable basis, companies and entities that are willing to invest in the national production of medical equipment and devices, tests and personal protection equipment required for the fight against the COVID-19 outbreak.

Projects must be completed within 6 months not exceeding 31 December 2020.

 
Eligibility

The eligibility criteria for each applicant for the “Inovação Produtiva COVID-19 tender is:

  • expenditure between €25k and €4m;
  • project start date from 1 February 2020; and
  • not being in a difficult situation as at 31 December 2019.

The eligibility criteria for each applicant for the I&D Empresas - COVID-19 tender is:

  • project start date from 1 February 2020;
  • maximum eligible investment of €500k;
  • granting of non-exclusive licences by the beneficiary on non-discriminatory market terms to third parties in the European Economic Area; and
  • not being in a difficult situation as at 31 December 2019.
 
Supervising Authority

Ministry of Planning (Ministério do Planeamento)

Eligible companies shall submit their application by 29 May 2020, through a simplified electronic form available at “Balcão 2020”.

Deadline for decision is up to 10 working days following submission of the relevant application.

 
Availability

From 17 April 2020

Incentive package

Government Measure

Deferral of 12 months for repayment instalments due up to 30 September 2020 in respect of reimbursable subsidies granted under the incentive schemes of the National Strategic Reference Framework (Quadro de Referência Estratégico Nacional) or Portugal 2020 without interest charges or any other penalty.

Expenses incurred by beneficiaries of such incentive schemes with events or actions cancelled or postponed as a result of the COVID-19 outbreak, eligible for reimbursement.

Negative impact of the COVID-19 outbreak causing failure to execute contractual obligations under the Portugal 2020 incentive scheme, may be deemed as force majeure.

 
Eligibility

Companies registered and operating in Portugal whose activity has been negatively affected by the COVID-19 outbreak.

The level of negative impact is defined by the general guidelines for each specific program within the incentive schemes mentioned herein.

No specific action required by eligible companies.

 
Supervising Authority

Ministry of State, Economy and Digital Transition (Ministério de Estado, da Economia e da Transição Digital).

Eligible companies shall request the deferral by accessing their reserved area at “Balcão 2020".

 
Availability

From 13 March 2020

Exceptional and temporary regime applicable to insurance agreements

Government Measure
  • Under this regime, which makes more flexible the payment of insurance premiums, despite the non-payment of the premium or fraction thereof on the respective due date, the compulsory insurance cover is maintained in its entirety for a limited period of time (60 days).
 
Eligibility

In situations where there is a significant reduction or even elimination of the risk covered as a direct or indirect result of the legal measures adopted in response to the COVID-19 outbreak, policyholders may request that these circumstances be reflected in the premium and the application of an exceptional regime of fractionated payment.

In the absence of an agreement between the policyholder and the insurance company, in the event of lack of payment of the premium or fraction on the due date, the insurance contract shall be automatically extended for a period of 60 days from the due date of the premium or fraction due.

 
Supervising Authority

The Portuguese Insurance and Pension Funds Supervisory Authority (Autoridade de Supervisão de Seguros e Fundos de Pensões)

Eligible policyholders shall request the relevant insurance company to reflect the significant reduction or elimination of the risk covered in the premium and, if necessary, to apply an exceptional regime of fractionated payment.

 
Availability

From 13 May 2020 until 30 September 2020

Exceptional and temporary regime for commercial practices with price reduction

Government Measure
  • Under this regime, sales discount that take place during the months of May and June 2020 are not subject to the maximum limit of 124 days per year. The main purpose of this measure is to enable businesses to dispose of their products and boost economic activity.
 
Eligibility

Commercial establishments, which were closed down or whose activity was suspended as a result of the COVID-19 outbreak.

 
Supervising Authority

No action is required by eligible commercial establishments.

 
Availability

From 13 May 2020 until 31 December 2020

“Programa ADAPTAR”

Government Measure
  • A safety incentive scheme for micro, small and medium-sized enterprises aimed at reducing the increased costs with the rapid reestablishment of operating conditions for this type of enterprises. Under this incentive scheme, the Portuguese Statebears part of the costs with the purchase of personal protective equipment for workers and users, hygiene equipment, disinfection products and of the costs of reorganising workplaces and changing the layout of establishments (for microenterprises investing between €500 and €5k, the Portuguese State will bear 80% of the costs on a non-refundable basis; for small and medium-sized enterprises investing between €5k and €40k, the Portuguese State will bear 50% of the costs on a non-refundable basis).
 
Eligibility

All microenterprises3 that fulfil the following cumulative requirements:

  • Being incorporated in Portugal as at 01 March 2020;
  • Having accounts organised in accordance with the applicable legislation;
  • Fulfilling the necessary conditions for qualifying as microenterprise; and
  • Having no tax or social security debts at the date of application.

The eligibility criteria for projects of microenterprises are the following:

  • Investment between €500 and €5,000;
  • Maximum execution period of 6 months from the date of notification of the favourable decision, with the deadline of 31 December 2020; and
  • Compliance with the applicable laws and regulations.

All SMEs4 that fulfil the following cumulative requirements:

  • Being legally incorporated in Portugal as at 01 March 2020;
  • Having accounts organised in accordance with the applicable legislation;
  • Fulfilling the necessary conditions for qualifying as SME and having the electronic certification of SME issued by the IAPMEI;
  • Having no tax or social security debts as at the date of application;
  • Having the situation regularised with regard to replenishments, within the framework of European Structural and Investment Funds (Fundos Europeus Estruturais e de Investimento);
  • Not being in a difficult situation (as legally defined); and
  • Not being a company subject to a pending recovery order following a previous European Commission decision declaring an aid illegal and incompatible with the internal market.

The eligibility criteria for projects of SMEs are the following:

  • Investment between €5k and €40k;
  • Not started before the date of submission of the application;
  • Maximum execution period of 6 months from the date of notification of the favourable decision, with the deadline of 31 December 2020; and
  • Compliance with the applicable laws and regulations.

The following shall be regarded as eligible expenses (for both microenterprises and SMEs) if incurred from 18 March 2020 onwards:

  • Purchase of necessary personal protection equipment (masks, gloves, visors and others);
  • Purchase and installation of automatic payment devices (including those using contactless technology);
  • Reorganisation and adaptation of workplaces and space layout to current guidelines and good practices;
  • Hiring of disinfection services for premises, for a maximum period of 6 months; and
  • Expenses with the intervention of certified accountants or statutory auditors, in the validation of the expenses of payment requests.

The following shall not be regarded as eligible expenses:

  • Works of the company for itself;
  • Acquisition of second hand goods; and
  • Recoverable VAT, even if it has not been or will not be effectively recovered by the beneficiary.

4Companies with less than 250 employees and an annual turnover not exceeding €50 million or a total annual balance sheet not exceeding €43m, holding the respective electronic certification

 
Supervising Authority

The Portuguese Tourism Institute (Turismo de Portugal, I.P.) for projects of companies in the tourism sector and the IAPMEI for other projects.

Applications are submitted upon notice published by the Portuguese Managing Authority of the Competitiveness and Internationalization perational Program (Autoridade de Gestão do Programa Operacional Competitividade e Internacionalização) and are submitted, through a simplified electronic form available at “Balcão 2020”.

 
Availability

From 15 May 2020

Export support measures

Government Measure

Increase of credit insurance lines guaranteed (i) for the metallurgical, metal-mechanical and mould sectors (increase from €100m to €200m); (ii) for work abroad and other supplies (from €100m to €200m); and (iii) for short-term export credit insurance line (from €250m to €300m).

 
Eligibility

Companies registered and operating in Portugal whose export activity has been negatively affected by the COVID-19 outbreak.

 
Supervising Authority

Ministry of State and Finance (Ministério de Estado e das Finanças)

Eligible companies shall submit the relevant application form using cosec.

 
Availability

From 13 March 2020

Moratorium on debts

Government Measure

Moratorium on debts until 30 September 2020 (prohibition of revocation of contracted credit lines, extension or suspension of credits until 30 September 2020)

 
Eligibility

All companies that fulfil the following cumulative requirements:

  1. Having their registered offices and carrying out their economic activity in Portugal;
  2. Being classified as micro, small or medium enterprises;
  3. As at 18 March 2020, not being in default or in breach of any cash repayments for more than 90 days with any financial institutions, or, if so, they do not meet the materiality threshold set out in Notice of Banco de Portugal no. 2/2019 and Regulation (EU) 2018/1845 of the European Central Bank of 21 November 2018;
  4. Not being in a position of bankruptcy, or suspension or assignment of payments, or, as at 18 March 2020, being subject to enforcement by any financial institutions; and
  5. Being in a cleared position before Tax, Customs and Social Security authorities, with no debts (not being relevant, for these purposes and until 30 April 2020, debts incurred in March).

Regardless of size, any company (except those in the financial sector) which on 26 March 2020 fulfils the requirements referred to in paragraphs (i), (iii), (iv), and (v) above may also benefit from the moratorium on debts.

The moratorium does not apply to: (i) credit or financing to purchase securities or positions in other financial instruments, whether or not secured by such instruments; (ii) credit granted to beneficiaries of schemes, subsidies or benefits (in particular tax-related benefits) to establish head offices or residence in Portugal, and for investment activity; and (iii) credit granted to companies for individual use of credit cards by members of management, supervisory bodies, employees or other collaborators.

 
Supervising Authority

Portuguese Central Bank (Banco de Portugal)

Eligible companies shall request the moratorium by means of a statement of adherence addressed to the lender, accompanied with evidence of no debts to the Tax Authority and the Social Security.

As soon as the statement of adherence is received, the lender has 5 working days to apply the moratorium.

 
Availability

From 26 March 2020 until 30 September 2020

Postponement of CIT/PIT and Stamp Tax payments and obligations

Government Measure

Extension of the following deadlines:

  • Extension of the first CIT special payment on account from 31 March 2020 to 30 June 2020.
  • Deadline to submit the Corporate Income Tax return (Modelo 22) extended from 31 May 2020 to 31 July 2020.
  • Extension of the first CIT payment on account and additional payment on account from 31 July 2020 to 31 August 2020.
  • Extension of the deadline to submit the IES statement from 15 July 2020 to 07 August 2020.
  • Extension of the deadline to deliver to the tax authorities the tax file (when mandatory) from 15 July 2020 to 31 August 2020 (with no penalties).
  • Extension of the deadlines to deliver CIT and PIT withholding taxes and Stamp Tax from April and May from 20 May 2020 to 25 May 2020 and from 20 June 2020 to 25 June 2020, respectively.
 
Eligibility

Any Portuguese CIT taxpayer.

 
Supervising Authority

Tax Authority (Autoridade Tributária e Aduaneira)

No action is required by eligible CIT taxpayers.

 
Availability

From 24 April 2020

Tax deferrals

Government Measure

Extension of the following deadlines:

  • Payment of VAT and CIT/PIT withholding taxes due in the second trimester of 2020 may be deferred and paid in three or six monthly instalments, free of interest and without the need of providing guarantees.
  • The first one-third or one-sixth has to be paid on the corresponding legal deadline.
 
Eligibility

Companies with a turnover lower than €10m in FY18, whose activities have been shut down, or those whose activity was initiated during FY19.

Companies not fulfilling the said requirements may also request the deferral rule in cases where there is at least a 20% decrease on the average invoicing (communicated via the electronic invoicing system) of the preceding three months of the tax obligation as compared to the same period of 2019. To apply for this, the company will need a certificate confirming the activity decrease issued by a statutory auditor (ROC) or a certified accountant.

 
Supervising Authority

Tax Authority (Autoridade Tributária e Aduaneira)

The request is made electronically at the website of the Tax Authority, until the end of the voluntary payment period, by using the following path: “Serviços > Flexibilização de Pagamentos > Aderir”.

 
Availability

From 26 March 2020

Social Security deferrals

Government Measure
  • Possibility of reducing to 1/3 any Social Security contributions due between March and May 2020 for companies. For companies which already paid Social Security contributions on 20 March 2020, these may still defer payment of Social Security contributions due between April and June 2020.
  • The remaining 2/3 should be payable under the same instalment deferral rules set out above, i.e. payable between July and September 2020 or between July and December 2020, depending whether payable in three or six monthly instalments (free of interest).
 
Eligibility

The deferral measures apply to companies with:

  • fewer than 50 employees;
  • 50-249 employees, in cases where there is at least a 20% decrease on the average invoicing of the preceding three months (as from the payment obligation) as compared to the same period of 2019; and
  • more than 250 employees that are Private Institutions of Social Solidarity (IPSS) or companies from the tourism sector, civil aviation sector and any other sector that has been shut down or suspended and which has at least a 20% decrease on the average invoicing (communicated via the electronic invoicing system).

Proof of decrease of activity is issued by a statutory auditor (ROC) or a certified accountant.

 
Supervising Authority

Social Security (Segurança Social)

The option for the payment in three or six instalments is made electronically at the website of the Social Security until the end of the voluntary payment period.

Presentation of the required evidence of decrease of activity is made in July 2020.

 
Availability

From 26 March 2020

VAT measures

Government Measure
  • Extension of the deadlines to submit the VAT periodic return (with no penalties) of February (from 10 April to 17 April), of March (from 10 May to 18 May), and of April (from 10 June to 18 June) – the corresponding VAT can be payed until 20 April, 25 May and 25 June, respectively. Extension of the deadline for filling the 1st quarterly VAT return from 15 May to 25 May - the corresponding VAT can be paid until 25 May. This measure does not preclude the request to pay in instalments of the VAT due between April and June.
  • Simplification procedures for filing of VAT periodic returns of February, March and referring to the 1st trimester of 2020 with no support documentation as long as substitutive returns are afterwards presented in July and August, respectively. This measure is only applicable to taxpayers with a turnover lower than €10M in 2019 or whose activity was opened in 2020.
  • Application of reduced VAT rate (6% in Mainland Portugal, 5% in Azores and 4% in Madeira) to protective masks and disinfectant gel and VAT exemption on health equipment furnished to hospitals and non-profit health organizations.
  • Exceptional recognition of PDF invoices as “electronic invoices” in April, May and June for every legal effect.
 
Eligibility

Eligible VAT taxpayers.

 
Supervising Authority

No action is required by eligible VAT taxpayers.

 
Availability

From 7 May 2020

Reliefs

Deferral on payment of rents

Government Measure

Eligible tenants may defer rental payment falling due in the period from 1 April 2020 up to the end of the month following the termination of the state of emergency and will be bound to pay the deferred rental payments in monthly instalments (that shall accrue to the monthly rents due and payable in the same period), with no interest or penalties, within 12 months after the deferral period lapses.

Landlords shall not be entitled to terminate leases or evict tenants for default on the payment of rents during the deferral period.

 
Eligibility
  • Retailers and services open to the public which have been forced to shut down or to suspend activity as a result of the state of emergency declared by the Portuguese Government due to the COVID-19 outbreak, or by any other legal or administrative order (including if they keep trading online or through distance sales).
  • Restaurants and similar enterprises (even if they keep operating for take-away services or delivery to domicile).
 
Supervising Authority

Portuguese Government

No specific notice or application to the landlord is required in order to defer the payment of the rents during the applicable period, although it is recommended.

 
Availability

From 1 April 2020 up to the end of the month following the termination of the state of emergency.

Other

Closure of facilities or business establishments—impact on leases

Government Measure

The closure of facilities or business establishments cannot be invoked as grounds for the termination, early break or other forms of terminating lease contracts for non-residential purposes or other atypical forms of occupational agreements regarding real property, nor as grounds for the eviction from the properties where such facilities or establishments are installed.

 
Eligibility

Business establishments, facilities, and services open to the public which closure and suspension has been imposed by the Portuguese Government.

 
Supervising Authority

Portuguese Government

 
Availability

The Portuguese Government has approved a time schedule for lockdown release. Under such schedule, business establishments, facilities and services are being progressively reopen to the public.

Termination of lease agreements and evictions

Government Measure

The duration of leases (residential or commercial) is extended until 30 September 2020 (except if the tenant agrees to the expiry of the lease at an earlier date).

The effects of all notices for termination, revocation or opposition to renewal/extension served by the landlord are suspended until 30 September 2020

The obligation of the tenant to return the premises to the landlord following the termination of the lease is suspended until 30 September 2020.

Evictions are also suspended until the termination of the exceptional measures, in cases where, as a consequence of a potential final eviction decision, the tenant could be put in a “vulnerable situation due to the lack of a place for permanent residence or to another overriding social reason”.

 
Eligibility

All residential and commercial leases.

 
Supervising Authority

Portuguese Government

 
Availability

From 3 April 2020 up to 30 September 2020.

Suspension of all procedural terms and authorized judicial proceedings

Government Measure

All procedural terms for all kinds of courts have been suspended and will resume when the state of calamity ends (this suspension covers, for example, the term for a debtor to file for insolvency). This suspension does not prevent the courts from ordering the performance of any judicial steps that are necessary to prevent irreparable damage to the legitimate rights and interests of debtors.

 
Eligibility

Generally applicable to proceedings which are not urgent (notably those where fundamental rights are involved).

 
Supervising Authority

Ministry of Justice (Ministério da Justiça)

 
Availability

From 20 March 2020