Contributed By TELLES
Portugal is a civil law jurisdiction. The judicial order is organised as ascribed in Law 62/2013 of 26 August, and is composed of the following common jurisdiction courts:
The district courts can be divided into courts with specialised competences or minor crime courts. Decree Law 49/2014 of 24 March, which approves the legal regime applicable to the organisation and functioning of the courts, includes the maps that establish the geographical competence area for each of the courts that exist in each of the above categories.
Decree-Law 138/2014 of 15 September sets forth certain restrictions on foreign direct investments in strategic infrastructure and services, notably those related to energy, communications, transportation, national security and defence, whenever investments are made by entities from outside of the European Union and the European Economic Area.
The foreign direct investment legal framework establishes mechanisms to preserve strategic assets in the event of their acquisition by a third country or a person from outside the EU or EEA. However, foreign investment is only subject to control by the Portuguese government when it meets the following criteria.
If the investor/target and type of investment fall within these criteria, the Minister responsible for the sector related to the relevant strategic asset may propose to the Council of Ministers that the Portuguese government opposes a transaction whenever the acquisition of control consists of a real and substantial threat to national security or to the security of supply of basic services considered fundamental to the country.
The Minister responsible for the sector related to the relevant strategic asset has 30 calendar days from the date of execution of the relevant acquisition, or of the date the transaction comes to public knowledge, to open an investigation process to determine the risk that such acquisition may pose to national security or to the security of supply of basic services considered fundamental to the country.
When an investigation is started, the Minister responsible for the sector at stake must immediately notify the Minister of Foreign Affairs, the Minister of Defence and the Minister of Homeland Security.
In the case of an investigation, the person or legal entity that acquired the strategic assets is under the obligation to provide all information and documentation requested by the Minister. The Minister may enact a ministerial order listing the documents and information that may be required in an investigation.
When all documents and information are received by the Minister that determined the investigation, the government has 60 calendar days to oppose the transaction on the basis of a proposal of the Minister responsible for the sector related to the strategic asset. Opposition to a transaction needs to be substantiated and grounded.
If the government does not make a decision within this 60 days, the transaction is deemed approved.
Foreign investors who intend to acquire a strategic asset may request confirmation from the Minister responsible for the sector related to the strategic asset that the prospective transaction will not be opposed by the Portuguese government. This request must be accompanied by a description of the terms and conditions of the transaction.
Apart from the trigger, the process and review are relatively similar to those of an investigation initiated by the government. Any Minister responsible for a sector related to a strategic asset may enact a ministerial order listing the documents and information that may be required in the case of a voluntary prior assessment.
The government has 30 days to decide in the case of a voluntary prior assessment. If it does not make a decision within this timeframe, the prospective transaction is deemed to be non-opposed.
Transactions subject to opposition by the government are null and void.
In certain cases, the authorities may impose certain conditions or otherwise require assurance regarding the following:
Any decision of opposition to a transaction is subject to appeal and, if applicable, injunctions are available to the foreign investors or their counterparties under the law of administrative process.
Most companies in Portugal are limited liability companies, of which there are two types:
Ldas can be incorporated by a single shareholder or by two or more shareholders, and the share capital is divided into “quotas”. Even though there is no minimum share capital amount, the law establishes that the nominal amount of each quota cannot correspond to less than EUR1. All quotas are subject to registration with the Portuguese public commercial registry.
SAs can also be incorporated either by a single shareholder (which in this case is mandatorily a corporate entity) or by a minimum of five shareholders. The minimum share capital of an SA is EUR50,000, and shares are subject to internal registration with the company itself. This type of company requires the appointment of an auditor.
In both types of company, the quotas and shares will be used as a measure to determine the current or potential rights (such as voting or dividends) and obligations of the shareholders. As for shareholders’ liability, each shareholder is liable towards the company for the amount of share capital subscribed, and only the company’s assets are liable for the company’s debts.
Ldas are more suitable for start-up companies or family offices, as they have reduced functioning costs; SAs are more commonly used for mid-sized/larger companies and joint ventures.
The first step is to apply for a certificate that authorises the company’s name (Certificado de Admissibilidade de Firma), which is issued by the National Company Registrar. The company’s registered office, amount of share capital and corporate purpose should also be defined.
After obtaining the certificate, the company’s incorporation deed needs to be provided in order to register the company in the Portuguese public commercial registry, through notarial deed or private contract executed by the shareholders or legal representatives. The deed has to contain the following information:
Despite efforts to reduce the bureaucracy of this process over the past few years, it remains quite time-consuming: investors should expect it to take around ten days for the registration to be concluded.
According to the Commercial Registry Code, the following are subject to mandatory registration before the Commercial Registry Offices:
Companies are required to have at least an Annual General Meeting concerning the annual approval of the accounts of the company, to be held within three months of the accounts closing date of the previous year.
Companies are also required to file a statement to register the ultimate beneficial owner, which shall be a natural person.
Other reporting obligations may apply, depending on the shareholder structure of the company and/or its activity/corporate purpose.
The main ruling body for Ldas is the general shareholders’ meeting (Assembleia Geral), which convenes all the shareholders and is responsible for the matters regarding the pursuit of the company’s corporate interest. This body also appoints the management entity, which may be comprised of one or more directors (gerentes), who undertake to act in accordance with the company’s corporate interest and follow the resolutions of the shareholders’ meeting. In this type of company, the appointment of a supervisory board/auditor is optional.
In SAs, the board of directors (Conselho de Administração) is the main ruling body, and is made up of directors appointed in the general shareholders’ meeting. SAs are mandatorily supervised by a supervisory board or a sole supervisor. The SA may have one sole director if the share capital does not exceed EUR200,000; if the share capital is higher, the SA shall have a minimum of two directors on the board of directors.
Even though they are referred to as limited liability companies, the company’s articles of association and even the law foresee cases in which the shareholders may be held liable for damages caused whenever it seems the shareholder is not pursuing the company’s best interest; and certain resolutions that focus on getting private benefits for a certain shareholder may be considered void.
Directors or managers may also be held liable for the damages caused to the company and/or shareholders and/or the company's creditors, whenever it is shown that they failed to comply with their obligations to act with skill, care and diligence and pursue the company’s best interests.
Although the concept of piercing the corporate veil is not directly foreseen in Portuguese law, this matter has been brought up in the Portuguese courts. Nevertheless, as it is considered a mechanism with a subsidiary nature, the courts remain extremely cautious in its application within the Portuguese territory.
The employment relationship is ruled by law, collective bargaining agreements, employment agreements and labour practices that are not contrary to the principle of good faith.
The most important sources of labour legislation are the Portuguese Labour Code, the Labour Code Regulation and the Legal Framework for the promotion of Safety and Health at Work.
Case law decisions are not legally binding but do play a relevant part within judicial procedures.
General Requirements Applicable to Employment Contracts
Generically, labour contracts in Portugal have no special requirements, except for specific categories of contracts, namely term contracts, which must be in a written form.
There are two basic types of labour contracts:
As a general rule, employment contracts are required to be indefinite (or permanent). Permanent employment agreements are not required to be in writing, although parties so typically enter into written agreements.
Fixed-term Employment Contracts
Fixed-term employment contracts can only be used to satisfy a company's temporary needs, and only for as long as necessary to meet those needs.
Fixed-term contracts may also be based on other limited reasons (eg, the hiring of a person who has been unemployed for a very long time, the launch of a new business activity or new establishment, or for a company employing fewer than 250 employees).
They must be in a written form and must include the duration of the contract, the start date and the termination date.
Any non-compliance with the above will cause a fixed-term employment contract to be deemed a permanent one.
Duration of Employment Contracts
Fixed-term employment contracts cannot exceed two years. They can be renewed up to three times but the total duration of the renewals cannot exceed the initial duration of the employment contract.
Duty of Information
Regardless of the form of employment contract, the employer must inform the employee, in writing, of the material terms of the employment contract and the duties for which the employee has been hired, within 60 days of work beginning. To meet this obligation, the employer must provide at least the following information:
Maximum Working Time
Regular working hours may not exceed eight hours per day and 40 hours per week.
Maximum working hours may be determined on average within a reference period, as follows:
Exemption from Work Schedule
The following groups of employees may be exempt from the working hour requirements by written agreement:
Exempt employees are not subject to the normal working hour limits and can agree any working hour schedule with the employer. Such exemption does not affect these employees' entitlement to daily rest, weekly rest days or public holidays.
Overtime worked by non-exempt employees during normal working days entitles the employee to the following additional payments:
Overtime worked during a weekly rest day or on a public holiday entitles the employee to an additional 50% of their regular rate of pay for each overtime hour or fraction thereof. Overtime rendered on mandatory weekly rest days entitles the employee to one day of paid compensatory rest, to be taken on one of the three business days following the day on which overtime was rendered.
Employment contracts can terminate due to the following reasons:
Labour law prohibits employers from dismissing employees except for disciplinary "just cause", unsuitability, collective dismissal or, in some limited circumstances, extinction of the work position.
Employees may not be dismissed simply by giving the employee notice (or for discriminatory reasons, etc); termination may only occur through a mutual termination agreement between the parties.
Disciplinary "just cause" is defined as a wilful conduct by the employee which, owing to its gravity and the effect of such conduct, makes continuation of the employment relationship immediately and practically impossible.
Collective Redundancy – Grounds
A collective redundancy is understood as the termination of employment contracts by the employer, simultaneously or successively over a three-month period, affecting at least two or five employees, depending on whether the company has fewer or more than 50 employees, and whenever such termination is due to the closing of one or various sectors or equivalent structures or a reduction of personnel due to market, structural or technological reasons.
Collective Redundancy – Procedure
Collective redundancy is initiated with an announcement, in writing, to the Workers Committee or, in its absence, the Inter-union or Union Committees or, in the absence of any organised structure of worker representation, to each of the employees affected by the dismissal. In this latter case, within five working days of receiving such communication, the employees may appoint a representative committee of no more than three or five members, depending on whether the redundancy affects up to five or more employees.
This announcement shall include the following:
On the date of the announcement, the employer must also send a copy to the relevant service of the Labour Ministry, along with all relevant documents.
Information and negotiation phase
Following the receipt of the above-mentioned announcement, the employer and the employees must enter the information and negotiation phase, with the purpose of reaching an agreement on the scale and effects of the measures being adopted and on other measures that reduce the number of workers being made redundant, namely:
Having reached an agreement, or in the absence thereof, the employer must do the following, at least 15 days after the announcement of the dismissal:
The final decision must be issued with a notice regarding the following anticipated dates of termination:
The amount of severance pay depends on each employee's hiring date:
In fixed-term employment contracts, severance amounts to 18 days of base salary and seniority payments for each year of service and fraction thereof.
Employees are guaranteed the right to:
Employers are prohibited from:
Trade unions have the right to do the following:
Trade union representatives are covered by some protective rules concerning work hours, absences, relocation, suspension and dismissal for cause, to carry out their duties.
Employees also have the right to set up works councils, which are entitled to:
The protection provided to workers' representatives is the same as for trade union representatives.
An individual will be considered resident in Portugal if they spend more than 183 days in Portugal in any given 365-day period, or if they have their main and habitual residence in Portugal.
For Portuguese resident taxpayers, the Portuguese tax regime provides for a categorisation of the income sources, with employment income being taxed under the Category A rules at progressive rates, as follows:
Companies are required to withhold tax at source on employment income.
Portuguese-sourced employment income derived by non-residents will be taxed in Portugal at a flat rate of 25%, when this is permitted by the relevant treaties.
Employment Income under the Non-habitual Resident Regime
Portugal has introduced a special tax regime for taxpayers that have not been resident in Portugal for the previous five years and become resident in Portugal. Once granted, the non-habitual resident (NHR) regime will last for ten years, and allows taxpayers to obtain a host of different tax benefits, namely exemptions on certain types of foreign income. The following applies to employment income:
Social Security Charges
Social security is payable on employment income at the following rates:
Social security is levied on the base salary and a number of other regular payments. However, it should be noted that certain bonus payments, stock option plans and other forms of variable incentives for employees may not currently be subject to social security contributions, provided that all relevant conditions are met.
Portugal has enacted a typical corporate income tax system.
Resident companies and non-resident companies maintaining a permanent establishment (PE) in Portugal are subject to corporate income tax (IRC) and a state surcharge (derrama estadual). For resident companies, the IRC is levied on worldwide income, including capital gains. Municipalities may also levy a municipal surcharge (derrama municipal) on the annual taxable income of corporations.
A company is deemed resident in Portugal when its legal seat or place of effective management is in Portugal.
The standard IRC rate is 21%. As mentioned, a state surcharge may apply, at the following progressive tax rates:
IRC is charged on net taxable income, consisting of business/trading income, passive income and capital gains. Only realised income and capital gains and losses are relevant for the computation of taxable income, although there are certain exceptions to this rule.
A foreign tax credit for tax paid abroad is usually available.
The IRC Code also provides for a simplified tax regime for companies with taxable income of up to EUR200,000, whereby the taxable income is simply calculated using a percentage of the annual turnover.
Participation Exemption Regime
Dividends received from qualified resident and non-resident subsidiaries and capital gains realised from the transfer of a participation in qualified resident and non-resident subsidiaries are exempt from IRC. To claim the benefit, the following requirements must be met:
Withholding Tax Rates
Portugal imposes withholding tax (WHT) on payments to non-Portuguese companies or individuals. The rates thereof are reduced when the beneficiary owner of the income is resident in a country or territory with which Portugal has entered into a double tax treaty.
The non-treaty rate on income paid to non-Portuguese beneficiaries is typically 25% or 35%.
However, the following special rules relating to WHT should be noted.
Dividends paid by a Portuguese company to a non-resident holding company will not attract WHT, provided that all the following criteria are met:
Capital gains on the sale of shares and qualifying securities of Portuguese entities are exempt from tax when derived by qualifying non-resident companies that do not hold the qualifying assets through a permanent establishment in Portugal. To qualify for the capital gains exemption, the non-resident company may not:
As with the exemption for dividends:
The regime does not apply to a sale of shares if, at any given time in the year prior to the sale, the company issuing the shares derives more than 50% of its value from real estate located in Portugal, unless the immovable property is used for carrying out an agricultural, industrial or commercial activity.
Interest and royalties
Following the transposition to Portuguese legislation of the Interest and Royalties Directive (IRD), interest or royalty payments to companies resident in an EU Member State or Switzerland are exempt from tax on the receipt of interest or royalties if the requirements set forth in the IRD are fulfilled.
This exemption may be denied if the non-resident company does not have up-to-date Beneficial Ownership registration, or it reflects an arrangement or series of arrangements that have been put in place for the purposes of obtaining a tax advantage that defeats the object and purpose of the elimination of double taxation.
Income tax treaties
At the time of writing, Portugal has 79 treaties to avoid double taxation in force and effect.
Being part of the EU, Portugal has transposed the EU VAT Directive and the various regulations relating to the EU’s common VAT system.
The Portuguese VAT rates are:
Non-Portuguese resident businesses with local operations that require a local VAT registration will have to comply with Portuguese rules on accounting, the issuance of invoices, rates, record keeping, filings, etc.
For many years but with special emphasis from 2014 onwards, Portugal has been making significant attempts to introduce a very competitive system of tax credits and incentives. In this context, and whilst it is not possible to go into detail on these special tax regimes, the following should be highlighted:
A group consolidation regime is available to affiliated companies when the parent company is a Portuguese tax resident or a tax resident in another EU Member State. In order for group consolidation to apply, there must be a dominant company holding, directly or indirectly, at least 75% of the share capital of the subsidiaries, and that holding must allow the dominant company to own at least 50% of the voting rights in the subsidiaries.
Once that hurdle is met, certain additional criteria must be fulfilled, as follows:
Where group consolidation applies, the tax group is not a taxpayer. Rather, each of the companies within the group remains an autonomous taxpayer. Transactions between group companies are not disregarded for tax purposes. The taxable income of the group derives from the aggregation of the taxable income of all the group companies, allowing losses in one company to set-off the income of another company of the group.
Any tax losses incurred by a group member company prior to entering the group are ringfenced and are available to set-off the taxable income of that company only.
The group consolidation allows the interest expense limitation rules to be applied on a group-wide basis.
Portugal does not have thin capitalisation rules.
Portugal imposes an interest expense limitation rule, which was amended with the transposition of the Anti-Tax Avoidance Directive (ATAD).
Companies may only deduct net financing expenses up to the higher of:
This interest limitation rule applies to Portuguese tax resident companies and non-resident companies that maintain a PE in Portugal. Financing expenses that exceed the limit are not deductible, but may be carried forward and claimed as a deduction in the following five fiscal years if no limitation exists in any of the carry-forward years.
The law provides several exclusions from the interest deduction limitation rule, covering companies that are subject to the supervision of the Portuguese Central Bank or the Portuguese Insurance and Pension Fund Supervisory Authority, including securitisation vehicles. Portuguese branches of other EU financial companies or insurance companies that are resident in a Member State of the EU are also covered.
Transfer pricing rules apply, with OECD Guidelines and Commentary being accepted as a source of interpretation and guidance. The Portuguese transfer pricing legislation does not significantly diverge from the OECD rules.
Portugal has several longstanding anti-avoidance rules, which have been modified over the years, more recently via the transposition of the ATAD. In this respect, Portugal is a traditional European country, with all the following anti-avoidance rules in place:
Similar to the European Merger Control Regulation, the Portuguese Competition Act (Law 19/2012 of 8 May) considers the merger of previously independent undertakings and the acquisition of control of share capital or parts of the assets of other undertakings, including the creation of a joint venture that would perform on a lasting basis as an autonomous economic entity, to be concentration operations.
Such concentrations are subject to merger control review by the Portuguese Competition Authority (PCA) if any of the following conditions/thresholds are met:
Further to the notification being presented by the filing parties, the PCA has 30 business days to issue its decision, or 90 business days for cases requiring an in-depth investigation. These time limits can be suspended by the PCA in several circumstances (eg, if additional information is requested from the parties or if commitments are offered).
Parties are obliged to suspend the implementation of the concentration until the PCA has issued a clearance decision. Breach of this standstill obligation entails a fine of no more than 10% of the turnover of the undertaking in breach, with the Portuguese Competition Act also establishing that any act or transaction implementing the concentration prior to clearance from the PCA is unenforceable.
However, public takeover bids can be implemented, provided that, in general, the acquirer does not exercise the voting rights in the target entity until clearance is obtained.
Identical to the Treaty on the Function of the European Union (TFEU), the Portuguese Competition Act prohibits agreements or concerted practices that restrict competition, including cartels (ie, agreements or concerted practices between competitors to co-ordinate in the market or to affect the relevant parameters of competition by, inter alia, fixing or co-ordinating the sale or purchase prices or any other transaction conditions, including intellectual property rights, by attributing production or sale quotas, market or client sharing (including bid rigging), by import or export restrictions and through anti-competitive actions against other competitors).
The Portuguese Competition Act is applicable to competition law enforcement, specifically in terms of prohibited practices on Portuguese territory or whenever these practices have or may have an effect there.
In Portugal, cartels are administrative (not criminal) offences sanctioned with fines not exceeding 10% of the offending undertaking's turnover in Portugal in the year preceding the decision.
Individuals can also be liable in antitrust offences (ie, board members, as well as any individuals responsible for the management or supervision of the areas of activity where the breach occurred). The fine in question cannot exceed 10% of the individual's annual income deriving from the exercise of his/her functions in the undertaking concerned.
To the extent that the antitrust offence has occurred during or as a result of those processes, a ban of up to two years may be imposed on the right to take part in tendering processes for public works contracts, public service concessions, the leasing or acquisition of movable assets or the acquisition of services or procedures involving the award of licences or authorisations by public entities.
Undertakings or individuals connected to the cartel may apply for total immunity or a fine reduction if they provide valuable information about the cartel, with the Portuguese Competition Act also establishing the possibility of cases being settled prior to the final decision being issued by the PCA.
Mirroring the TFEU, the Portuguese Competition Act also prohibits undertakings in a position of dominance from abusing such position.
Abusive conduct includes:
Differing from the TFEU, the Portuguese Competition Act also specifically prohibits the abuse of a situation of economic dependence. Such specific infringement may include any of the types of conduct previously mentioned as being potentially abusive under the abuse of dominance rules, as well as the full or partial rupture of an established commercial relationship, in view of past commercial or trade practices in the relevant market and contractual conditions.
Regarding anti-competitive agreements and concerted practices, the Portuguese Competition Act is applicable to competition law enforcement, including on breaches deriving from the above-mentioned unilateral conducts that might occur on the Portuguese territory or whenever these practices have or may have an effect there.
The primary legislation governing patents in Portugal is the Industrial Property Code (IPC).
The patent is the industrial property right that protects inventions. An invention is a technical solution to solve a specific technical problem, including products, processes and new processes for obtaining already known products and substances.
Length of Protection
The patent has a duration of 20 years from the date of application, subject to the payment of annuities.
Nevertheless, it is possible to request a Supplementary Protection Certificate (SPC), which can extend the term of a medicinal or plant protection patent by up to five years, with the possibility of a further six-month extension in some circumstances.
The protection granted by the National Registered Patent is limited to the Portuguese territory.
National applications are made (in person, via postal service or online) through the Portuguese Institute of Industrial Property (Instituto Nacional da Propriedade Industrial – INPI).
Applying for a patent takes at least 21 months.
To apply for the patent the following requirements should be considered:
It is possible to submit a Definitive Patent Application or a Provisional Patent Application, which is often used to ensure the priority of a patent application for someone who does not yet have all the requisite elements to file a Definitive Application.
The steps of the application process are as follows:
If the application is in conformity, the INPI publishes a notice in the Industrial Property Bulletin containing the summary of the application, no sooner than 18 months after the filing date;
If granted, a patent provides its holder an exclusive right of exploitation of the invention in the Portuguese territory. In this way, the patent holder has the right to prevent third parties from manufacturing, offering, storing, marketing or using the patented product, or importing or possessing it, for any of the mentioned purposes, without his or her consent.
In the case of patent infringement, the patent holders benefit from several enforcement proceedings, namely:
The remedies set out in the IPC are mostly in line with Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004, on the enforcement of intellectual property rights. The legal remedies available against patent infringement are:
The primary legislation governing trade marks in Portugal is the IPC.
A trade mark is a sign capable of identifying and distinguishing the goods or services of a company from those of another company. It may consist of a sign or a combination of signs capable of being represented by words (including personal names), designs, letters, numbers, sounds or the shape of a product or its packaging.
Trade mark protection is acquired through registration.
Length of Protection
Trade mark registration lasts for ten years from the application date and is indefinitely renewable for further ten-year periods, subject to the payment of fees. This renewal may be requested within the six months preceding the expiration date, or during the grace period of six months following it, upon the payment of late renewal fees. The registration of a trade mark becomes invalid if it is not renewed. However, the holder may request the revalidation within one year from the date of the publication of the notice of expiry in the Industrial Property Bulletin, subject to the payment of a fee.
Portugal has a first-to-file system, meaning that registration is granted to whomever files the application first.
On average, the registration of a trade mark in Portugal takes four months.
The application is filed (online or through the postal service) at the INPI.
The steps of the application process are as follows:
Registration gives holders the right to use the trade mark during trade. If a third party uses an identical or similar trade mark to designate identical or similar goods or services in the marketplace without authorisation, the trade mark holders benefits from several enforcement proceedings, including the following.
The remedies set out in the IPC are mostly in line with Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004, on the enforcement of intellectual property rights. The legal remedies available against trade mark infringement are:
The main legislation governing trade marks in Portugal is the IPC.
Designs are defined as the appearance of the whole or part of a product resulting from the features of the lines, contours, colours, shape, texture or materials of the product itself or its ornamentation. Its technical or functional characteristics are not considered.
Designs are eligible for protection if they fulfil these two requirements, among others:
A registered design is also eligible for protection under copyright law as from the date on which the design was created, or defined, in any form.
Length of Protection
The protection period is five years following the application date, and can be renewed for consecutive equal periods of time up to a maximum of 25 years.
The rights granted by the INPI are only valid in Portugal.
The steps of the application process are as follows.
Design registration entitles the holders to use the design and to prevent third parties from using it without consent. This includes, in particular, the manufacture, offer, placing on the market, import, export or use of a product in which the design has been incorporated, or to which it has been applied, as well as the storage of this product for the same purposes.
In cases of infringement, the design holders benefit from several enforcement proceedings, including:
The remedies set out in the IPC are mostly in line with Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004, on the enforcement of IP rights. The legal remedies available against design infringement are:
Portuguese copyright law is governed by the Portuguese Copyright and Related Rights Code.
According to Portuguese law, for a work to be protected by copyright, it must be an original literary, artistic or scientific creation, expressed in any way or form, known at present or that may be created in the future.
Length of Protection
As a rule, copyright lasts 70 years after the author’s death, even if the original work was published or came up after its author’s death.
When the validity of the copyright expires, the work enters the public domain and can be used freely.
Protection of copyright is automatic and acquired immediately after the work's completion. The registration of copyright is merely optional, having a declarative effect, leading to the presumption that the registered right-holder is entitled to the relevant right.
The registration can be made at the Inspeção-Geral das Atividades Culturais (IGAC).
The legal protection conferred by copyright includes:
In cases of infringement, the copyright holders benefit from several enforcement proceedings, including the following.
The remedies set out in the IPC are mostly in line with Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004, on the enforcement of intellectual property rights. The legal remedies available against copyright infringement are:
The national legislation governing software is the Decree-Law 252/94 of 10 October, which transposed into national law the Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs, repealed by Directive 2009/24/EC of the European Parliament and of the Council of 23 April 2009 on the legal protection of computer programs.
Computer programs (software) are protected as literary works as long as they fall within the legal criteria of being “creative”.
In Portugal, the legal protection of computer programs lasts for 70 years.
Software registration is not mandatory but it grants the registrant a presumption of ownership of the right over the work.
The registration of software may be carried out at the Associação Portuguesa de Software (ASSOFT) or at IGAC.
Databases are protected under Law 122/2000 of 4 July, which implemented Directive 96/9/EC on the legal protection of databases.
A database is defined as a collection of independent works, data or other materials that is arranged in a systematic or methodical way and is individually accessible by electronic or other means.
On the one hand, databases that constitute intellectual creations by the selection or arrangement of their contents care protected by copyright.
The right over the database granted to the intellectual creator expires 70 years after his or her death.
Database registration is not mandatory, but it grants the registrant a presumption of ownership of the right over the work. The registration of databases may be carried out at IGAC.
On the other hand, a sui generis legal protection is available to makers of databases, provided that there has been substantial financial, material or human investment in the obtaining, verification or presentation of the contents.
If the requirements for the sui generis protection are verified, a database is granted automatic protection for 15 years, starting either from the creation date or from when the database was first made publicly available.
Trade secrets are governed by the IPC, which transposed into the national legal system Directive (EU) 2016/943 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure.
"Trade secrets" refers to information that meets the following cumulative three conditions:
The protection extends to products whose design, characteristics, functioning, production process or commercialisation significantly benefit from trade secrets unlawfully obtained, used or disclosed.
Trade secrets are protected without registration.
They can be protected for an unlimited period of time, as long as the legal elements required for trade secret protection are fulfilled.
The legal framework for personal data protection in Portugal derives from the application of the following.
Several other dispersed diplomas contain specific data protection rules, such as:
Portugal has also adopted international instruments relevant to data protection, including:
The GDPR applies to the processing of personal data in the context of the activities of an establishment of a controller or a processor in the European Union, regardless of whether the processing takes place in the EU or not.
The GDPR applies to the processing of personal data of data subjects who are in the EU by a controller or processor that is not established in the EU, where the processing activities are related to:
Portuguese Law 58/2019 of 8 August is also applicable to processing carried out outside Portugal when:
However, on 3 September 2019, the Portuguese Data Protection Authority (Comissão Nacional de Proteção de Dados – CNPD) issued a Decision (494/2019) declaring several provisions of Law 58/2019 of 8 August unenforceable, namely Article 2(2), which established the territorial scope of the Law.
The CNPD considered that the rule provided by Portuguese law (that national jurisdiction applies to data processing “carried out within the scope of an enterprise established in the national territory”) jeopardised the application of procedural rules and the distribution of powers between supervisory authorities, where cross-border processing is concerned.
In fact, the GDPR introduced the so called "one-stop shop" mechanism, which ensures the possibility of remaining in contact with a sole supervisory authority in cases of processing common personal data in several countries. The competent Data Protection Authority is the one of the EU Member State in which the main establishment is located.
However, under Law 58/2019, the CNPD would have jurisdiction over the data processing that a processor carries out in Portugal, regardless of whether or not its main establishment is in another Member State of the EU.
For similar reasons, the rule stated in subparagraph b) of article 2(2) also compromises the application of the one-stop shop mechanism provided for in Article 56 of the RGPD.
Therefore, to ensure the full effectiveness of EU law, in particular of the provisions of Articles 56 and 3(3) of the GDPR, the CNPD disregarded Article 2(2) of Law 58/2019 as it considers it to be incompatible with the provisions therein (the courts have not yet ruled on this matter).
The agency in charge of enforcing data protection rules in Portugal is the CNPD, an independent administrative body with powers of authority throughout the national territory.
Law 58/2019 appoints the CNPD as the Portuguese supervisory authority, giving it the following powers (besides the provisions established in the GDPR):
Legal reforms are expected following the COVID-19 pandemic and its impact on labour relationships – namely within the telework regime, regulating aspects such as teleworking costs, employees' privacy and right to disconnect, and enforcement of compliance with safety and health rules.
In terms of competition law, a relevant change to the Portuguese Competition Act is expected imminently, as a result of the anticipated incorporation into Portuguese law of Directive 1/2019 of the European Parliament and of the Council (known as the ECN+ Directive).
A reinforcement of the PCA’s powers is expected, not only at the level of its investigation tools (eg, enhanced access to evidence in digital format) and range of fines, but also derived from the increment of the co-operation level among all EU competition authorities (the European Commission and the competition authorities of the Member States).
The following is expected in the field of data protection: