New Investment Contracts

Summary:

Decree-Law 203/2003 of 10 September 2003 sets a common legal framework for foreign investment contracts ending with differences given to foreign and national investment

Aiming to adapt the Portuguese legal system to the recent EU and OCDE guidelines, that point at non discrimination of investment for its nationality, Decree-Law 203/2003 of 10 September 2003 sets a common legal framework for foreign investments contracts in Portugal, ending with the distinction between foreign and national investment.

The provisions of this new decree establish a special support and incentives contracting framework. It will be exclusively applied to major business investments of special interest to the Portuguese economy and

(i) exceeding 25 millions euros, or

(ii) when such volume is not reached, such investments are initiative of companies generating an annual turnover higher than 75 millions euros or of a non-commercial entity with an annual budget higher than 40 millions euros.

The Portuguese Investment Agency - "AgÍncia Portuguesa para o Investimento" (API), incorporated by Decree-Law 225/2002 of 30 October 2002 is the entity responsible for, on the behalf of the State, receiving, analyzing, negotiating, contracting and follow up major investment projects, being exclusively responsible for the all required assessment.

While entering upon the investment contracts incentives may be awarded by the State, mainly financial incentives, tax benefits and part- financing of the project through venture capital investments.

Exceptionally, specific...