Alternative Funds 2025 Comparisons

Portugal’s alternative investment fund (AIF) framework is primarily set out in the Asset Management Regime (RGA), approved by Decree-Law No. 27/2023 and further detailed in the Portuguese Securities Market Commission (CMVM) Regulation No. 7/2023 (RRGA). These instruments consolidate the rulebook for AIFs and alternative investment fund managers (AIFMs), align domestic law with Directive 2011/61/EU (the Alternative Investment Fund Managers Directive, AIFMD) and provide a clear supervisory architecture (manager, depositary, auditor), with detailed provisions on governance, valuation, disclosures, fees/costs and reporting under CMVM oversight. The regime accommodates both contractual funds and corporate investment companies, providing flexibility in AIF structuring while ensuring investor protection and regulatory oversight.

Portugal remains an attractive destination for sponsors of real estate and private equity/venture capital strategies, supported by predictable supervision and workable structuring options. CMVM data indicates that the Portuguese venture capital funds market had grown to approximately EUR10.2 billion in assets under management as of 31 December 2024 (343 funds, 103 SCRs). In real estate funds, net asset value (NAV) had grown to approximately EUR18.5 billion as of 30 June 2025.

The Portuguese alternative funds industry has recently experienced significant regulatory consolidation, with key trends reflecting alignment with EU standards and modernisation of the market, particularly the following:

• Regulatory Consolidation and Proportionality: The RGA/RRGA has unified the rulebook for AIFs and AIFMs, incorporating risk-based supervision and clearer filing processes for authorisation, prior notification and subsequent communication.
• Corporate Actions With Investor Safeguards: Mergers, demergers and transformations of privately placed closed-ended AIFs now proceed through prior notification rather than prior authorisation. Dissenting investors are granted a cost-free redemption right, calculated based on the unit value immediately before the effective date.
• Distribution Toolkit Aligned With AIFMD: Pre-marketing and marketing activities are officially recognised. AIFMs in the European Economic Area (EEA) can utilise the passport for distribution, while non-EEA entities must follow local distribution routes.
• Governance, Outsourcing and Valuation: There is increased scrutiny of governance structures, delegation and outsourcing arrangements, and valuation controls, all under the oversight of depositaries and auditors.
• Fees, Costs and Reporting: Enhanced governance in relation to costs, disclosures and periodic reporting emphasises the importance of policy frameworks and consistency across investor communications.
• EU-Level Disclosure Requirements: The AIFMD and sustainability frameworks (Sustainable Finance Disclosure Regulation (SFDR)/Taxonomy) influence offering documentation and investor reporting.
• Process and Execution: The CMVM’s digital filing channel is increasingly utilised, facilitating a steady cross-border dimension and predictable timelines for well-prepared transactions.

Under the Portuguese regime, AIFs are categorised into four types: real estate AIFs, private equity/venture capital AIFs, credit AIFs and a residual category referred to as “other AIFs”.

AIFs can be established as either contractual funds (without legal personality) or corporate investment companies (commonly referred to as “SICs”). They may be open-ended or closed-ended, as specified in their constitutive documents. In practice, private equity, venture capital and credit AIFs are typically closed-ended, while real estate AIFs can be found in both formats. Open-ended real estate funds are less common but generally represent a significantly larger share of the segment’s NAV.

• Real Estate AIFs: These invest in eligible real estate assets, either directly or through qualifying real estate companies. They can be structured as either funds or SICs, with specific portfolio and governance rules outlined in the regime.
• Private Equity/Venture Capital AIFs: These focus on equity, hybrid and certain debt investments in portfolio companies that exhibit high growth potential.
• Credit AIFs: Also known as loan funds, these AIFs are authorised to originate and acquire loans to eligible corporate borrowers. They are subject to specific prohibitions (eg, on lending to individuals or certain related parties), diversification and leverage limits, as well as enhanced risk management and disclosure obligations that align with banking-style credit standards.
• Other AIFs: This flexible residual category is designed for strategies that do not meet the “predominant elements” test of the other types. Specifically, to be in this category, no single asset type may account for more than two-thirds of the fund’s total assets (subject to ramp-up rules in the regulation). This category accommodates mixed or innovative portfolios that may include both financial and certain non-financial assets, provided that the investment policy aligns with the regime.

Under Portuguese law, there are no unregulated funds; accordingly, every AIF must be established as a regulated entity. The applicable regulatory framework in Portugal varies by AIF category, particularly concerning investment limitations.

Regulatory Approval

Portuguese law outlines two procedural tracks for AIF constitution: prior authorisation and prior notification. The appropriate track depends on whether the fund is open-ended or closed-ended and the nature of its offering. Generally, privately placed closed-ended AIFs proceed via prior notification, while open-ended and publicly offered AIFs require prior authorisation.

Under the prior-notification track, the CMVM does not conduct a substantive review of the constitutive documents; it simply assigns a fund registration number upon verifying the completeness of the filing.

In contrast, under the prior-authorisation track, the CMVM must decide within 15 days from the submission of the relevant legal documentation whether to approve or refuse the AIF’s incorporation. If no decision is made within this timeframe, the incorporation is automatically deemed approved. Required constitutive documentation includes management rules and regulations and a prospectus (not mandatory for closed-ended AIFs or those targeting only professional investors), along with a Key Investor Information Document (KIID) where applicable or relevant professional-investor information for professional-only offerings.

Investment Limitations (High Level)

• Real Estate AIFs: At least two-thirds of total assets in all real estate AIFs must consist of real estate assets (the properties themselves, units in real estate funds, or shares in qualifying real estate companies). For privately placed closed-ended real estate AIFs, this two-thirds requirement is the only regulatory portfolio-composition limit, alongside ramp-up and timing rules. Open-ended and publicly offered closed-ended real estate AIFs face additional constraints, such as indebtedness caps, single-tenant exposure limits and minimum liquidity requirements. Derivatives are typically restricted to those used for hedging and risk management purposes.
• Private Equity/Venture Capital AIFs: Core investments focus on equity, hybrid and certain debt instruments of portfolio companies, subject to diversification, concentration and related-party restrictions (including prohibitions on financing acquisitions of securities issued by the fund, the manager or their group). Notably, the 33% limits on single company/group investments or investments in another private equity/venture capital AIF do not apply if all investors are professional or if the fund imposes a minimum subscription of at least EUR100,000 per investor. Other prohibitions remain in effect.
• Credit AIFs: These funds may originate or acquire loans to eligible corporate borrowers, but lending to individuals and certain related or connected entities is prohibited. They must adhere to borrower and sector concentration limits and leverage limits, and maintain enhanced credit-risk governance, including policies, monitoring and impairment assessments. The use of derivatives is restricted to hedging purposes.
• Other AIFs (Residual): This flexible category is for portfolios that do not meet the “predominant elements” test of the other types – specifically, no single asset type may account for roughly two-thirds of total assets – while still adhering to general rules on governance, concentration, related parties and leverage.

Marketing

The AIFMD passporting mechanism facilitates cross-border marketing to professional investors. However, retail routes and third-country AIFs require CMVM authorisation and must meet additional conditions.

Under Portuguese law, AIFs are subject to comprehensive disclosure duties designed to ensure transparency and investor protection. Before any subscription takes place, investors must receive the AIF’s constitutive documents – namely, the Prospectus, the Management Rules or Regulations, the KIID and, in the case of corporate AIFs, the Bylaws – as well as any subsequent amendments.

The mandatory content of the offering documents is specified in Annex IV of the RGA and includes, among other items:

• the fund’s investment objectives and policy;
• its risk profile and remuneration policy;
• subscription, redemption and distribution procedures;
• fees and expenses incurred by the AIF; and
• information about the management company and key service providers (depositary, auditor, valuer, etc).

The KIID may alternatively follow the EU PRIIPs KID format as outlined in Regulation (EU) 1286/2014 and Delegated Regulation (EU) 2017/653. If this option is chosen, the AIFM is exempt from preparing a separate KIID under the RGA.

From a public disclosure standpoint, the CMVM operates an official disclosure system (Sistema de Difusão da Informação), which makes offering documents and periodic reports for most AIFs publicly accessible. However, private equity and venture capital AIFs are specifically excluded from this public disclosure regime, although they are still required to provide investor-level reporting and submit supervisory filings to the CMVM.

The Portuguese tax framework for AIFs follows a distribution-based taxation model, under which taxation arises primarily at the level of investors upon income distribution or redemption, rather than at the fund level (see 4.8 Tax Regime for Investors). The fund’s own tax treatment depends on its legal category, as follows:

• Private Equity and Credit AIFs: These AIFs are fully exempt from corporate income tax (CIT) on income of any nature, including interest, dividends, capital gains and other investment returns. As a result, they operate as tax-neutral vehicles, with taxation deferred to investors at distribution or redemption.
• Real Estate and Other AIFs: Real estate AIFs and “other AIFs” are formally subject to CIT but enjoy a broad exclusion from taxable income covering (i) capital income, (ii) rental income and (iii) capital gains, together with related expenses. These entities are also exempt from municipal and state surtaxes.

In practice, this framework ensures that most income earned by real estate or mixed-asset AIFs remains outside the scope of taxation at fund level, maintaining near tax neutrality. Only income not qualifying for exclusion – such as non-core or ancillary income – remains taxable at the general CIT rate of 20% (in force since 2025).

Under Portuguese law, an AIF’s ability to grant loans is contingent upon its statutory type. The regime differentiates between (i) the origination of loans in the strict sense and (ii) shareholder loans or quasi-equity financing provided to portfolio companies.

Real Estate AIFs

Real estate AIFs are restricted to investing in real estate assets, shares in qualifying real estate companies, and units in other real estate AIFs. Loan origination is not included in their statutory investment scope, and they are not permitted to extend credit or shareholder loans as a regular activity.

Private Equity/Venture Capital AIFs

Private equity AIFs may invest in equity, hybrid or debt instruments of portfolio companies with high growth potential. The law explicitly permits them to provide shareholder loans or similar financing to companies in which they hold, or intend to acquire, an equity stake. Such lending must be ancillary to and consistent with the fund’s equity investment strategy.

Credit AIFs

Credit AIFs are the only category expressly authorised to originate loans. They may lend exclusively to corporate borrowers and are prohibited from granting credit to (i) natural persons, (ii) credit institutions, (iii) unitholders of the AIF, (iv) the AIFM or any entity within its group, (v) the depositary or its group, and (vi) other collective investment undertakings. These funds must adhere to borrower and sector concentration limits (no more than 20% of total assets per borrower or group after 12 months) and an overall leverage cap of 60% of total assets.

AIFMs managing loan-originating funds must comply with disclosure obligations similar to those imposed on financial intermediaries, providing borrowers with clear information regarding risks, costs and conditions. They are also entitled to access the Central Credit Register maintained by the Bank of Portugal to monitor exposures.

Other AIFs

The “other AIF” category offers broad flexibility, allowing exposure to both financial and non-financial assets. In principle, these funds may extend financing or acquire loans, provided that such activities align with their stated investment policy and risk management framework, and do not violate prudential restrictions applicable to their management company.

Under Portuguese law, AIFs may in principle invest across a wide range of financial and non-financial assets, provided that the selected assets meet the eligibility and prudential requirements applicable to their category and align with the fund’s investment policy. The only significant exception is real estate AIFs, which are restricted to investing solely in real estate assets or shares of qualifying real estate companies.

Digital Assets

Portugal has no specific regime governing AIF investment in crypto-assets or other digital assets. However, “other AIFs” may invest directly in such assets, provided that:

• their constitutive documents explicitly authorise such investments;
• the assets qualify as eligible under Portuguese law; and
• the AIF complies with applicable risk management, custody and valuation rules.

Investments in tokenised or virtual assets may also fall under the EU Markets in Crypto-Assets Regulation (MiCA – Regulation (EU) 2023/1114), which gradually came into effect from 2024 to 2025.

In contrast, private equity AIFs cannot hold digital assets directly but may invest in companies engaged in the blockchain or digital asset sector, provided that such investments meet the “predominant elements” test (at least two-thirds of total assets in capital-risk exposures) and align with the AIF’s venture capital objectives.

Cannabis-Related Businesses

Investments in cannabis or cannabis-related companies are permitted only if the activities are duly licensed for medical or industrial purposes, as recreational cannabis remains illegal under Portuguese law. Consequently, private equity AIFs may invest in licensed entities operating in this sector, subject to the standard diversification and governance limits applicable to their portfolio investments.

Consumer Credit and Loan Portfolios

Credit AIFs are authorised to originate or acquire corporate loan portfolios, adhering to borrower-level concentration (20%) and leverage (60%) limits as outlined in Articles 25 and 26 of the RRGA. However, they are expressly prohibited from granting consumer credit or investing in portfolios of loans to natural persons.

Residual AIFs may engage in credit-related strategies only if such activities are clearly defined in their constitutive documents and remain consistent with their category and prudential framework.

Litigation Funding

Portugal does not currently have a specific regime governing third-party litigation funding or its treatment under the RGA. While litigation funding is not listed among the eligible investment categories in the RGA or RRGA, it is also not expressly prohibited.

In theory, an “other AIF” could pursue a litigation funding strategy if its management regulations explicitly permit such investments and if the CMVM accepts that the underlying exposures qualify as permissible assets under the applicable prudential and risk management standards. Any such fund would need to justify its valuation methodology, liquidity management and investor protection safeguards to the CMVM, given the inherently high-risk and illiquid nature of litigation claims.

At present, there are no CMVM-authorised AIFs publicly known to operate as litigation funding vehicles in Portugal. Therefore, while litigation funding remains a legally plausible but untested investment strategy under the Portuguese regime, any sponsor considering such a structure should engage with the CMVM in advance to confirm regulatory feasibility and supervisory expectations.

The use of subsidiaries or special purpose vehicles by AIFs is legally permitted under Portuguese law, although it remains relatively uncommon in practice. The prevailing market model favours direct investment by the AIF in the eligible assets that constitute its portfolio.

However, subsidiaries may be employed in specific circumstances where indirect holding structures are warranted – typically for purposes such as risk management, tax efficiency, joint ventures or co-investment. These structures are most frequently observed in real estate AIFs, which may hold assets through property companies (PropCos), or in private equity AIFs, which may utilise holding vehicles (HoldCos) to consolidate equity interests in portfolio companies.

The RGA does not impose restrictions on the use of subsidiaries, provided that:

• the subsidiary’s activities align with the AIF’s investment policy and fall within its eligible asset scope;
• the AIFM maintains effective control and oversight over the subsidiary; and
• the subsidiary is fully consolidated for accounting, valuation and reporting purposes.

Any interposition of vehicles must not compromise investor protection or the CMVM’s ability to supervise the fund’s operations. In practice, the CMVM expects a “look-through” approach, ensuring transparency of the underlying assets and exposures when AIFs invest through subsidiaries or joint ventures.

The investment management of an AIF can be conducted by a Portuguese-authorised AIFM with a registered office in Portugal, by EU AIFMs operating under the passport regime of the AIFMD, or by non-EU AIFMs, provided that they obtain prior authorisation from the CMVM.

If a corporate AIF is structured as a self-managed investment company, it must adhere to the same structural requirements as AIFMs, necessitating the establishment of a local management structure, including local premises and employees.

The Portuguese regime does not allow for the incorporation of partnership funds; instead, AIFs must be established as either contractual funds or SICs. When an AIF is incorporated as an investment fund or as an externally managed investment company, the local substance requirements applicable to AIFMs will also apply.

Portuguese law establishes detailed rules regarding the appointment and location of service providers supporting AIFs. The key functions and requirements are as follows.

Depositary

Every Portuguese AIF must appoint a depositary established in Portugal. This role can only be fulfilled by (i) credit institutions or their branches authorised in Portugal, or (ii) investment firms expressly authorised by the CMVM to conduct depositary activities. The depositary is responsible for the safekeeping of assets, cash flow monitoring, and oversight of legal and operational compliance. It must operate independently of the AIFM to avoid conflicts of interest (Articles 191–199 of the RGA).

Investment Management

The investment management function may only be performed by an authorised AIFM. The AIFM can delegate specific functions (eg, portfolio or risk management) to entities authorised to provide discretionary management of collective investment undertakings or third-party portfolios. Such delegation requires prior notification to the CMVM and must not result in the AIFM being classified as a “letter-box entity”.

Compliance and Internal Control Functions

AIFMs must maintain an internal compliance function led by a designated compliance officer, responsible for ensuring adherence to regulatory and anti-money laundering (AML) obligations. While AIFMs may outsource certain support activities, overall responsibility remains with the AIFM. There are no statutory location requirements for external compliance or AML service providers; however, the CMVM expects them to possess sufficient knowledge of the Portuguese legal and regulatory environment.

Fund Administration and Ancillary Services

The law does not impose specific location requirements for fund administration, accounting or IT service providers. AIFMs may appoint non-Portuguese providers, including those located elsewhere in the EU, provided that:

• the service agreement ensures effective oversight and access by the AIFM and CMVM; and
• the provider has the necessary resources, systems and expertise to perform the delegated tasks to professional standards.

Auditor

All AIFs must appoint a statutory auditor (Revisor Oficial de Contas) registered with the CMVM, responsible for auditing annual financial statements and verifying compliance with applicable valuation and reporting requirements.

In practice, while some administrative and support functions may be outsourced cross-border, core fiduciary functions (management and depositary) must be located in Portugal or within the EU under CMVM supervision, ensuring full transparency and investor protection.

The main forthcoming legislative changes anticipated to impact the Portuguese AIF regime are as follows:

• AIFMD II (Directive (EU) 2024/927): This directive entered into force in April 2024 and must be transposed into national law by 16 April 2026, with certain reporting rules taking effect from April 2027. AIFMD II will introduce new provisions for loan-originating AIFs, including risk retention, leverage and diversification limits. It will also establish a harmonised liquidity management framework for open-ended AIFs and enhance rules regarding delegation, reporting and cross-border depositaries. The transposition of AIFMD II will necessitate amendments to the RGA and RRGA, marking the most significant upcoming change to the Portuguese AIF framework.
• SFDR Review and ESMA ESG-Naming Guidelines: The ongoing review of the SFDR and the new ESG-naming rules, effective for new funds from November 2024 and for existing funds from May 2025, are expected to refine disclosure standards and restrict the use of ESG-related terminology in fund names. This may require updates to offering documents and periodic reports.

The Portuguese AIF market remains predominantly domestic, with most promoters and sponsors being Portuguese asset managers, financial institutions and real estate development groups. These entities continue to lead the structuring and launch of new AIFs, particularly in real estate, private equity and credit strategies, often utilising long-established management platforms.

In recent years, there has been a steady increase in international sponsors using Portuguese AIFs as structuring vehicles or feeder platforms for cross-border investments, particularly from Brazil, the United States and the EMEA region (notably Spain, Turkey and the Middle East). These inflows are typically channelled through locally authorised AIFMs or dedicated Portuguese investment companies, capitalising on the predictability of the RGA regime and Portugal’s EU passporting framework.

Despite this growing international interest, the AIF ecosystem in Portugal remains largely shaped by domestic promoters, whose market proximity and regulatory familiarity continue to define the country’s fund landscape.

The management of AIFs in Portugal is a regulated activity reserved for licensed management companies operating under one of two legal forms:

• Sociedades Gestoras de Organismos de Investimento Coletivo (SGOICs): These management companies are authorised to manage both UCITS and AIFs, provided that their activities are not exclusively limited to private equity or venture capital funds; or
• Sociedades de Capital de Risco (SCRs): These are specialised private equity management companies that may manage only AIFs, with at least one qualifying as a private equity AIF. Additionally, the majority of the AIFs managed must not be real estate AIFs.

Management companies are classified as either large-scale or small-scale AIFMs based on the total value of assets under management. They are classified :

• over EUR100 million when leverage is used; or
• over EUR500 million when portfolios are unleveraged and investors have no redemption rights exercisable within five years of the initial investment.

AIFMs exceeding these thresholds must fully comply with the RGA and AIFMD requirements and are subject to CMVM authorisation as full-scope managers.

All AIFMs must be incorporated as Portuguese public limited liability companies (sociedades anónimas), with their registered office and effective management located in Portugal. They must also adhere to minimum share capital, governance and internal control requirements set forth in the RGA and RRGA.

Additionally, AIFMs are required to maintain a remuneration policy that encompasses all forms of fixed and variable pay, aligning with sound risk management and investor interests. At least 50% of variable remuneration linked to individual performance must be awarded in the form of units or shares of the managed AIFs, equity-linked instruments or equivalent vehicles, ensuring long-term alignment between staff interests and fund performance.

The regulatory regime for AIFMs in Portugal is primarily governed by the RGA and RRGA, which transpose and align domestic law with the AIFMD.

As outlined in 3.2 Legal Structures Used by Managers, AIFMs operate under two licensed forms (SGOICs and SCRs) and must be incorporated as Portuguese public limited companies (sociedades anónimas). They are classified as large-scale or small-scale managers based on the assets under management thresholds defined in the AIFMD.

AIFMs are subject to CMVM authorisation and ongoing supervision, which encompasses prudential, organisational and conduct-of-business requirements. They must:

• act honestly, fairly and with due skill, care and diligence in the exclusive interest of investors;
• maintain sound governance, risk management and compliance frameworks, including independent control functions;
• ensure adequate remuneration, conflict-of-interest, liquidity and valuation policies; and
• comply with extensive reporting and disclosure obligations to the CMVM and investors.

Core information on each AIFM and its managed funds is disclosed through the CMVM’s official disclosure system.

Overall, the Portuguese regime closely mirrors the AIFMD model, combining risk-based supervision with detailed conduct rules and transparency obligations.

Portuguese AIFMs – whether SGOICs or SCRs – are established as public limited companies and are subject to the general CIT regime, which includes a standard rate of 20%, along with applicable municipal and state surtaxes. Their taxable income, primarily derived from management and advisory fees, is calculated according to the ordinary accounting and tax rules applicable to Portuguese companies, with no special exemptions or preferential treatment afforded to AIFMs.

For VAT purposes, the management of investment funds (including both UCITS and AIFs) is exempt, in accordance with EU law and established case law from the Court of Justice of the European Union. This exemption applies to the management fees charged by AIFMs to the funds and may also extend to outsourced services that are specific and essential to fund management.

In practice, AIFMs are treated as standard corporate taxpayers for income tax purposes, while their core fund management services benefit from VAT exemption, thereby ensuring tax neutrality at the fund level.

Portugal has no statutory investment manager exemption. A non-resident fund managed by an authorised Portuguese AIFM will not, in itself, create a permanent establishment, provided that the AIFM acts as an independent manager, on arm’s-length terms, and the fund has no fixed place of business or effective management in Portugal.

A permanent establishment may arise if the fund has staff, premises or dependent agents in Portugal, or if key management and control functions are effectively exercised within the country.

Portugal does not have a specific tax regime for carried interest. The tax treatment varies depending on the form in which it is granted:

• Carried Interest as Units or Shares: When carried interest is paid in the form of units or shares in the AIF, the income received by managers or key personnel is taxed as investment income or capital gains, following the same rules that apply to other investors in the fund (see 4.8 Tax Regime for Investors).
• Carried Interest as Variable Remuneration: When carried interest is paid as variable remuneration (such as a performance bonus under an employment or service agreement with the AIFM), it is taxed as employment or self-employment income, subject to personal income tax at the ordinary progressive rates.

In both scenarios, there is no preferential or reduced tax rate for carried interest in Portugal. The treatment aligns with the general income taxation rules applicable to the chosen form of payment.

Portuguese law allows AIFMs to delegate or outsource investment and operational functions, provided that such delegation does not compromise the AIFM’s effectiveness, governance or regulatory oversight.

The delegation of portfolio management or risk management may only be made to entities duly authorised to manage collective investment undertakings or discretionary portfolios and must be notified in advance to the CMVM. The AIFM retains full responsibility for the outsourced activities and may not operate as a mere “letter-box entity”.

Other administrative or operational tasks (such as accounting, IT, transfer agency, valuation support or compliance monitoring) may also be outsourced, provided that the service provider possesses adequate resources, experience and internal controls.

All outsourcing arrangements must ensure:

• clear allocation of responsibilities;
• continuous oversight by the AIFM;
• access by the CMVM to relevant information and premises; and
• data protection and confidentiality safeguards.

In line with EU standards, critical ICT outsourcing is also governed by the Digital Operational Resilience Act (DORA), which has been in effect since January 2025. This act imposes specific requirements on contractual oversight and risk management for ICT third-party providers.

Portuguese AIFMs must demonstrate effective presence and management in Portugal, covering both financial and organisational substance as required by the RGA and CMVM supervision.

From a financial perspective, AIFMs must maintain minimum initial capital of EUR125,000, plus additional own funds equal to 0.02% of the value of assets under management exceeding EUR250 million, capped at EUR10 million in total. Self-managed investment companies are subject to the same capital thresholds.

From an organisational standpoint, AIFMs must have:

• their registered office and effective management located in Portugal;
• a governance structure with at least two directors of good repute and proven experience;
• qualified staff capable of performing portfolio management, risk management, valuation, compliance and internal control functions; and
• comprehensive internal policies covering risk, remuneration, conflicts of interest, anti-money laundering (AML)/counter-terrorism financing (CTF), business continuity and outsourcing.

The CMVM assesses substance both at authorisation and on an ongoing basis, verifying that strategic and control functions are genuinely exercised in Portugal and not merely delegated or nominally based in the jurisdiction.

In practice, the regulator expects effective and independent decision-making, adequate staffing and financial resources proportionate to the AIFM’s size and complexity.

Changes affecting the ownership or corporate structure of an AIFM are subject to CMVM oversight, with the level of regulatory intervention varying based on the nature of the transaction.

Mergers, demergers or other corporate reorganisations of an AIFM require prior authorisation from the CMVM.

Transformations between management company types (eg, from an SGOIC to an SCR) generally require prior notification when the intended activities overlap; otherwise, authorisation is necessary.

Changes in qualifying shareholdings – specifically, direct or indirect holdings representing 10%, 20%, 33% or 50% of voting rights or capital, or resulting in control – must be immediately reported to the CMVM. The regulator may object if the new shareholders are deemed not “fit and proper” or if their involvement could impair sound and prudent management.

In practice, the CMVM conducts “fit and proper” assessments of new controllers and may suspend the voting rights of shareholders who fail to obtain prior non-opposition when required. The regulator also expects timely communication regarding any restructuring or acquisition that may impact the governance, financial soundness or independence of the AIFM.

Portugal does not have a standalone regime specifically regulating the use of artificial intelligence (AI), predictive analytics or big data by AIFMs. However, several EU and national frameworks impose relevant obligations regarding governance, risk management and data protection.

• AI Act: The EU Artificial Intelligence Act, adopted in 2024 and set to be implemented gradually through 2026, classifies certain AI applications used in financial services (such as credit scoring, automated decision-making and algorithmic trading) as “high-risk” systems. AIFMs utilising such tools will be required to ensure human oversight, traceability, robust documentation and effective risk management controls.
• DORA: The Digital Operational Resilience Act, which has been in effect since January 2025, applies to AIFMs and encompasses ICT governance, incident reporting, resilience testing, and oversight of third-party providers, including those employing AI-based technologies integrated into ICT systems.
• Data Protection: All processing of personal data by AIFMs must comply with Regulation (EU) 2016/679 (the General Data Protection Regulation, GDPR) and Law No. 58/2019, which mandate a lawful basis for processing, data minimisation, transparency, and respect for data subject rights.

In practice, the CMVM expects AIFMs to adopt AI governance policies, ensure human validation of model-driven decisions, and integrate AI and data analytics tools within their existing risk management and compliance frameworks.

Several forthcoming EU regulatory developments are anticipated to impact Portuguese AIFMs over the next two years:

• AIFMD II (transposition by April 2026; certain reporting from April 2027): This directive will tighten delegation and governance requirements, introduce harmonised liquidity management rules for open-ended funds, and expand reporting and depositary oversight. These changes will necessitate amendments to the RGA/RRGA and corresponding updates to internal policies and procedures.
• EU Artificial Intelligence Act (main obligations for high-risk AI effective from August 2026): AIFMs utilising AI-based systems – such as automated decision-making, scoring or risk modelling tools – will be required to establish AI governance frameworks, ensure human oversight, and maintain documentation and traceability of model-driven processes.
• EU Anti-Money Laundering Package (AMLR, AMLD6 and AMLA): Effective from July 2027, this package will create a single EU rulebook on AML and CTF, harmonising governance standards, group-wide policies and reporting obligations, while increasing scrutiny of critical third-party providers.

Investor participation in Portuguese AIFs has steadily broadened in recent years, with a notable increase in private and high net worth investors alongside traditional institutional capital.

In particular, real estate AIFs – representing the largest segment of the Portuguese alternative fund market – are increasingly attracting private investors, especially in closed-ended structures utilised for wealth and succession planning. While institutional investors continue to dominate open-ended real estate funds due to liquidity and diversification needs, the private segment is now capturing a growing share of new launches and capital inflows.

A similar trend is evident in private equity and venture capital AIFs, where local entrepreneurs, family offices and private investors are becoming more active as limited partners, often co-investing alongside institutional sponsors.

Although the CMVM does not publish a detailed breakdown of investor types for AIFs, the consistent increase in the number of AIFs and total assets under management in recent years indicates a sustained appetite from both private and professional investors, particularly in real asset and private market strategies.

Side letters are permitted under Portuguese law but must adhere to the principles of fair treatment and transparency. They are commonly utilised in closed-ended, privately placed AIFs, particularly in private equity and real asset funds, to address issues such as reporting obligations, information rights, governance participation, most-favoured-nation clauses or specific fee arrangements.

Side letters do not require prior approval from the CMVM. However, any preferential terms granted to one or more investors must be disclosed to all investors, at least in general terms that describe the nature of the preference and the types of investors eligible for it. If the side letter effectively modifies the fund’s constitutive documents (for example, by altering economic terms, liquidity or voting rights), it must adhere to the change-control procedures outlined in the RGA, which may involve prior notification or subsequent filing depending on the materiality of the changes.

In open-ended or retail-facing AIFs, preferential terms related to liquidity or redemption are generally not permitted due to the equal-treatment obligation applicable to all investors. In such cases, side letters are typically limited to administrative or informational provisions.

Best practices in the Portuguese market include implementing any differentiated terms through separate unit or share classes reflected in the offering documents, maintaining a register of side-letter terms, and ensuring both internal and external compliance reviews to demonstrate adherence to fair treatment and disclosure obligations.

The marketing of AIFs in Portugal is regulated by the RGA, the RRGA and the AIFMD passporting framework. The applicable regime depends on whether the AIF and its manager are established in Portugal, elsewhere in the EU, or in a third country.

• Domestic AIFs: AIFs authorised or registered in Portugal may be marketed once their incorporation is approved or notified to the CMVM, provided that their offering documents are made available to investors. The scope of eligible investors (professional, semi-professional or retail) determines whether the offer requires prior authorisation (for public offerings) or prior notification (for private placements).
• EU AIFs Managed by EU AIFMs: EU AIFs may be marketed in Portugal under the AIFMD passport, following prior notification to the competent authority of the home EU member state and subsequent transmission to the CMVM. The CMVM cannot impose additional requirements beyond those specified in the directive.
• Non-EU AIFs or AIFMs: Marketing in Portugal by non-EU AIFMs or of non-EU AIFs requires prior authorisation from the CMVM, subject to equivalence and co-operation agreements between the CMVM and the third-country regulator. In practice, this route is seldom utilised.

All marketing activities must comply with the general principles of fair, clear and non-misleading communication, ensuring that investors receive adequate disclosure regarding the fund’s nature, risks and fees. The CMVM actively supervises marketing activities, particularly those directed at retail or semi-professional investors, and may suspend offerings that violate information or suitability standards.

Firms marketing or advertising AIFs from or into Portugal are subject to the RGA, the RRGA and, where applicable, the AIFMD passporting regime.

Marketing and distribution activities in Portugal may only be conducted by:

• the AIFM itself, acting directly;
• credit institutions and investment firms authorised to provide investment services in Portugal; or
• other financial intermediaries registered with the CMVM for the distribution of financial instruments.

All such entities must comply with MiFID II conduct-of-business, suitability and investor classification rules.

Regulatory Filings and Timing

For Portuguese AIFs, marketing may commence after prior notification to the CMVM for private offerings, or after prior authorisation for public offerings. This notification or authorisation process must occur before any marketing activity, during which the CMVM verifies the completeness of the documentation (management rules and regulations, prospectus and other information documents).

EU AIFs managed by EU AIFMs may be marketed in Portugal under the AIFMD passport, following notification to the home authority, which then transmits the file to the CMVM.

Non-EU AIFs or AIFMs require prior authorisation from the CMVM, subject to co-operation agreements with the third-country regulator and equivalence of investor disclosures.

Advertising Rules

All promotional communications relating to AIFs must be fair, clear and not misleading, and must align with the fund’s offering documents. The CMVM has broad supervisory powers over marketing materials and may require prior review or amendments, particularly when targeting retail investors.

Ongoing Obligations

After marketing begins, AIFMs must keep the CMVM informed of any changes to the fund’s documentation, maintain records of marketing communications and intermediaries used, and comply with continuous disclosure and reporting obligations (NAV, financial statements and investor information updates). The CMVM may suspend or prohibit marketing if it identifies non-compliance with these requirements.

Only AIFs authorised for public offering may be marketed to retail investors, typically consisting of open-ended or closed-ended funds that meet specific liquidity, diversification and governance safeguards. Distribution must be conducted by authorised entities – such as the AIFM itself, credit institutions or licensed investment firms – and is primarily carried out through banking distribution networks.

Some closed-ended AIFs, particularly those structured for foreign semi-professional investors (eg, Golden Visa applicants), have expanded participation to qualified individual investors. These funds remain subject to the same marketing and supervisory regime as all other AIFs. In certain instances, managers may engage referral agents who solely introduce potential investors to authorised distributors; however, these agents are not permitted to market, promote or place fund units.

Overall, retail participation in AIFs remains limited, and the CMVM exercises strict oversight over marketing practices, investor qualification and disclosure.

In Portugal, sponsors must exercise caution when relying on private placement or reverse solicitation, as the marketing regime for AIFs is significantly more restrictive than in other jurisdictions.

Under the RGA and RRGA, any communication or marketing activity related to AIFs requires prior notification or authorisation from the CMVM. There is no general private-placement exemption comparable to US Rule 506(c).

Private placement of AIFs is limited to professional and semi-professional investors and must be conducted without any public solicitation or advertising. Any general promotion – through websites, media or events – would requalify the offer as a public offering, necessitating the CMVM’s approval process.

Reverse solicitation – ie, where an investor approaches the AIFM entirely on their own initiative – is recognised in principle but interpreted very narrowly. The AIFM must demonstrate that no prior marketing or solicitation occurred in Portugal and that the investor’s initiative was fully spontaneous and documented.

Any contact through third-party introducers or online promotions accessible in Portugal would undermine this reliance.

Sponsors should therefore ensure that all communications remain strictly targeted and private, and maintain comprehensive records to demonstrate compliance with the CMVM’s conservative approach to private placement and reverse solicitation.

The use of placement agents in Portugal is relatively common, particularly for cross-border offerings of AIFs. Such intermediaries must be authorised financial institutions – typically credit institutions, investment firms or other CMVM-registered intermediaries – and must operate under written distribution or placement agreements with the AIFM. The AIFM remains fully responsible for all marketing and investor communications conducted on its behalf.

AIFMs may also utilise internal distribution teams or tied agents, provided that these individuals are properly registered and comply with MiFID II conduct-of-business rules.

Personnel involved in sales or distribution may receive remuneration for placement activities, as long as such compensation aligns with the AIFM’s remuneration policy under the RGA and ESMA Guidelines. These policies must ensure that incentives are aligned with sound risk management, avoid conflicts of interest and guarantee fair treatment of investors. The CMVM expects these arrangements to be documented, proportionate and subject to internal compliance oversight.

The taxation of investors in Portuguese AIFs depends on the nature (individual or corporate) and residence of the investor, as well as on the type of AIF.

• Real Estate AIFs: Income distributed by real estate AIFs to resident individuals is subject to a 28% final withholding tax; capital gains realised on redemption or sale are taxed at the same rate when earned outside a business activity. For resident legal entities, income is subject to 25% withholding tax (WHT) (as a payment on account) and included in taxable profit, subject to 20% CIT. For non-residents, distributions and capital gains are generally subject to a final 10% WHT, except where the investor is domiciled in a blacklisted jurisdiction (35% on dividends, 25% on capital gains) or is held more than 25% by Portuguese residents. These rules reflect the “income from immovable property” principle under the OECD Model Tax Convention, preserving Portugal’s taxing rights.
• Private Equity and Credit AIFs: Income distributed to resident individual investors is subject to a 10% final WHT, and to 20% CIT for resident corporates. Non-resident investors without a permanent establishment in Portugal are exempt from Portuguese taxation, provided that they are not resident in a tax-haven jurisdiction. Tax-exempt entities (eg, pension funds) are also exempt on income and gains derived from these funds.

Overall, the Portuguese regime offers a competitive tax framework for non-resident and institutional investors in private-equity and credit AIFs, while maintaining ordinary taxation for domestic investors in real estate funds.

Portuguese AIFs may access double tax treaty benefits depending on their legal form and tax status.

AIFs structured as SICs are subject to Portuguese corporate income tax and generally qualify as resident taxpayers, enabling them to claim treaty relief, subject to the relevant anti-abuse provisions.

Conversely, contractual AIFs are not regarded as residents for treaty purposes and therefore cannot claim treaty benefits directly. In such cases, investors – not the fund – may benefit from treaty or domestic relief in their own jurisdictions.

Eligibility for treaty protection is ultimately determined case by case, based on the fund’s structure and the wording of each applicable treaty.

Portugal implemented both the Foreign Account Tax Compliance Act (FATCA) and the OECD Common Reporting Standard (CRS) through domestic legislation and operates under a reciprocal Model 1 intergovernmental agreement with the United States, effective since 2016.

Under both regimes, Portuguese financial institutions – including AIFs and AIFMs qualifying as “investment entities” – must identify, document and report information on reportable accounts to the Portuguese Tax Authority (AT), which exchanges the data with the IRS (for FATCA) and other participating jurisdictions (for CRS).

Compliance obligations include investor due diligence, collection of self-certifications, and annual electronic reporting to the AT. Failure to comply may lead to administrative fines, penalties and reputational exposure, as the AT actively supervises adherence to automatic-exchange regimes.

Portugal maintains a robust AML and CTF framework aligned with the EU AML Directives. This regime is primarily outlined in Law No. 83/2017, as amended, and is complemented by CMVM Regulation No. 2/2020 and relevant provisions of the RGA.

AIFMs are expressly designated as obliged entities and must implement comprehensive KYC and monitoring procedures. Key requirements include:

• Customer Due Diligence: Verification of the identity of investors and beneficial owners, along with a risk assessment, before establishing business relationships or executing transactions above legal thresholds.
• Ongoing Monitoring: Continuous review of transactions and updating of investor information to ensure consistency with the risk profile.
• Suspicious Transaction Reporting: Immediate notification to the Financial Intelligence Unit (UIF) and the CMVM of any suspicious activities.
• Record Keeping: Retention of identification and transaction records for a minimum of seven years.
• Internal Governance: Appointment of an AML compliance officer responsible for internal controls and for filing the annual AML report with the CMVM.

The CMVM actively supervises AML compliance and may impose administrative sanctions on AIFMs that fail to meet legal or reporting obligations.

Data protection in Portugal is governed by the GDPR and its national implementation under Law No. 58/2019. AIFMs are considered data controllers when processing investor information and must ensure full compliance with these regulations.

• Lawful Processing and Transparency: Investor data must be collected and processed on a lawful basis, typically to fulfil legal or contractual obligations. This process must be accompanied by clear privacy notices that outline data categories, processing purposes, retention periods and data subject rights.
• Data Security: AIFMs must implement technical and organisational measures to ensure the confidentiality, integrity and availability of investor information, in accordance with the RGA’s internal control requirements relating to information security and risk management.
• Investor Rights: Investors have GDPR rights, including access, rectification, erasure, restriction, portability and objection. AIFMs must address these rights within statutory deadlines.
• Supervision: The Portuguese Data Protection Authority (CNPD) oversees enforcement and may impose administrative fines for breaches of data protection regulations.

The Retail Investment Strategy, which includes forthcoming amendments to the MiFID II and PRIIPs frameworks, is expected to influence several aspects of investor-related regulation in Portugal. Once implemented, these reforms will likely affect the following:

• Marketing and Distribution Rules: This may include potential restrictions on inducements and enhanced suitability requirements.
• Disclosure and Transparency Obligations: There will be a particular focus on improving disclosure for retail and semi-professional investors.
• Investor Protection Standards: The reforms aim to align product governance and cost disclosure rules across the EU.

These changes are still under discussion at the EU level and are anticipated to take effect around 2026. At the time of writing, no other legislative initiatives with a significant impact on investor-related matters have been announced in Portugal.