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EDGE is proud to inform that we have strengthened our team with seven newly qualified Associate Lawyers. From multiple backgrounds, our seven new colleagues finished their internship with us and successfully completed their articles with the Portuguese Law society.
Our new colleagues are Mariana Alves de Melo, Maria Pizzuti, Catarina dos Santos Sequeira, Joana de Oliveira Alves, Vitória Pontes, André Pinho and Catarina Eça.
We are also welcoming new associates Filipa Teixeira Barbosa, Giovana Silva, Karla Morais and Raakel Lehtola, who have also joined our team
Francisco Barata Salgueiro
The Portuguese Government has published a new High Added Value Activities (HAVA) list for Non-Habitual Residents Regime.
This new list shows a strong commitment of the government with the NHR status and a will to revamp the HAVA side of the NHR. Hopefully the waiting time for approval process will also be reduced significantly.
This updated list of activities is geared towards the recent needs of human resources and the new reality of the country. When NHR was launched Portugal was in the middle of one of the biggest financial crises in living memory with unemployment peaking, together with emigration of young qualified professionals. Now unemployment is at a very low level and in many areas, entrepreneurs are struggling to find skilled workforce.
Another objective of the new list is to clarify which activities are included in this category, giving clarity and objectivity to a list that would often create interpretative doubts regarding the professions included in the concept of high added-value activity.
For this purpose, the list is now based on a new model that has direct correspondence with the Portuguese Classification of Jobs (Classificação Portuguesa de Profissões) instead of the previous CAE (Códigos de Actividade Económicas).
The new list shall enter into force in January 1st 2020 and will be applied for all new requests after that date. For those already having a HAVA code the current list still applies, even if the NHR status is suspended.
It is also worth mentioning that depending on the assessment of the country’s economic situation, the table may be revised within three years which shows that there is a long term strategic thinking regarding NHR.
4th September 2019
By Geoffrey Graham
Senior Partner at EDGE International Lawyers
The Algarve Tourism Conference will take place at the “Hilton Vilamoura As Cascatas Golf Resort & SPA” on September 27, 2019.
New tourism markets for new times and preparing the Algarve for a circular economy for the 2020‘s are the mottos for this conference that will count on national and international experts from different areas who will debate the opportunity for an Algarve circular tourism economy, based on the emerging markets: wellness, medical and sports tourism, eco-tourism and senior tourism / senior living. The supply side will also be represented by hotel operators, tourism and travel agents, developers and real estate players.
The Global Wellness Institute estimates that wellness tourism will grow at an average annual rate of 7.5% through 2022, considerably faster than the 6.4% annual growth forecasted for overall global tourism.
This represents a great opportunity for the Algarve with its natural assets and also the players investing in the health tourism by improving and diversifying the supply, both in the wellness tourism and medical tourism areas.
The Conference has been co-organised by the ILM Tourism & Hospitality Real Estate Group Portugal, Dengun Digital Agency and the Ireland Portugal Business Network and is supported by the Turismo de Portugal, AHETA, Portuguese Chamber of Commerce in UK and several private players such as Open Media Group, Vilamoura World, Grupo Enolagest, Vale do Lobo, Pine Cliffs Resort Algarve, Grupo HPA Saúde and NERA, amongst others.
After a long period of great discussion, debate and analysis of the new changes to the Employment Code, the Law 93/2019 was published on 4th September further to the approval by the President of the Republic.
This is an important review of a few of the core areas of the Code including fixed term contracts’ regime, very short term contracts, probationary period for long term contracts, working hours’ regime.
In respect of the fixed term contracts’ regime, the new rules determine that the contracts as a whole including renewals have a total limit of 2 years’ duration. This being said, the renewals are also limited to the duration of the first fixed term contract signed which limits the whole duration of the contract.
The possibility of signing a fixed term contract due to the start of activity of business, is now applicable during a period of 2 years after such fact;on the restrictive side of the regime, now this reason is limited to companies holding up to 250 employees (before it was applicable to companies holding up to 750 employees).
All contracts being of services, fixed term, temporary or other for the same job position under the same employer’s structure (even if through different companies) will be considered for the purposes of the limit of 2 years’ contract duration as a whole.
Another crucial change on the flexibility side of the measures is the possibility of employers working in the agricultural sector and hotel industry, to hire employees under the regime of the very short term contracts.
This regime makes it possible for employers to hire without a proper written contract just filling in a form to be sent to social security services. The limit is that those contracts can only be used in case of exceptional increase of activity of the employer and up to 35 days each, in a maximum of 70 days of contracts in a civil year per employee.
Also on the flexibility side of the measures approved there is the probationary period, since 180 days’ probation will continue to apply to long terms contracts in situation of employees hired for high trust and confidence jobs or due to high qualification, complexity or responsibilty reasons, but now also for employees seeking first employment and also in case of unemployment of long duration.
The changes should now enter into force 1st October 2019 and may have still to be adapted due to the revision which will be operated in due course by the Constitutional Court.
4th September 2019
Cláudia Vaz Póvoa
Employment Department : cpovoa@edge-ilcom
Portugal is becoming more and more a residency destination for foreigners. This information is confirmed by the Immigration Authorities with the Immigration and Asylum Report, published on 28th June 2019, by occasion of the Service of Foreign and Boarders’ 43rd Anniversary.
According to the Report, the number of foreigners residing in Portugal continues to increase every year, with an increase of 13.9% in 2018, in relation to the previous year, which translates to an increase of 58,589 individuals in a total of 480,300.
The Government justifies this increase with the appealing factors that Portugal has, namely due to Portugal being a safe country. In fact, according to the Global Peace Index, Portugal is currently ranked 3rd as the safest in the world.
This position is justified by the increase investment of the country in policing activities and organization between the several different police forces, including the Immigration Authorities. It is also considered that the immigration increase shows that Portugal is an appealing country due also to its growing economy.
The majority of the foreigners residing in Portugal, in a percentage of 81%, are part of the working population, between ages of 28 and 44; again showing the growing economy in Portugal, and 68.9% resides in the boroughs of Lisbon, Faro and Setúbal.
Brazilians continue to be the leading nationality of foreigners residing in Portugal but there is a significant increase of other nationalities, such as Italians and French, and also Bengali, Nepali, Indians and Venezuelans.
Portuguese Nationality Applications have also broke the record of the past five years, as more than 41,000 citizens have requested Portuguese Nationality in 2018 only. From the same, it has been issued 32,414 favorable decisions.
This increase reflects the amendments of the Nationality Law from July 2018 that opened the scope for Portuguese nationality acquisition. In fact, this amendment reduced from 6 to 5 years, the legal residency period for foreigner applicants to become Portuguese. The acquisition of nationality based on residency is on the top applications, representing 70% of the same.
The issuance of new residency cards in 2018 has also suffered a significant increase of 51.7%, referring to 93,154 new Portuguese residents. In particular regarding the Golden Visa applications, the Report refers that in 2018 it were approved more than 3,000 new applications, with a total amount invested of € 838,532,935.27.
Considering the increasing numbers and also justifying the same, the Immigration Authorities have implemented and continuously worked during 2018 in integration friendly policies and simplified procedures in order to be able to assist all foreigners in Portugal.
Lisbon, 28th June 2019
By Catarina Ruivo Rosa, Associate at EDGE International Lawyers
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The 2019 State Budget created the Regressar Program, designed for Portuguese emigrants and encouraging their return to Portugal by implementing tax benefits for the emigrants that meet the requirements set out by the Program.
In accordance with the added Article 12 – A-Tax Regime applicable to former residents - to the Personal Income Tax Code, former residents will have 50% of employment or self-employment income and business and professional income excluded from taxation if they meet the following cumulative requirements:
· Have not been considered Portuguese residents in the three years previous to 2019 or 2020;
· Were Portuguese residents before 31-12-2015;
· Become Portuguese tax residents in 2019 or 2020, in accordance with Article 16, number 1 and 3 of the Personal Income Tax Code;
· Have not applied for the Non Habitual Resident Program; and
· Have their tax situation in compliance with the Law.
This regime is applicable to the income earned in the first year in which the resident meets the requirements mentioned above and for the next four years, and ceases after the production of all the effects in respect to the residents who only meet the requirements in 2020.
This is a tax benefit with automatic effects, since its effects are immediately derived from the law by the simple verification of the respective requirements which means that it does not depend of any act of recognition by the Tax Authorities, and is made with the submission of the tax return.
Lisbon, 28th June 2019
By Geoffrey Graham, Senior Partner at EDGE International Lawyers
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In an attempt to clarify and further develop the legal regime on short-term leases, new legislation has been approved to amend and substantiate certain aspects, with one of the most important being the relationship between the Condominium of the building and the independent units being used for short-term leases, due to the tensions that normally arise from these cases between those using the units for short-term leases and the remaining owners of units in the same building.
As such, it has been clarified that the Condominium’s General Meeting cannot decide to forbid the use of a unit for short-term leases. The only exception to this rule are units being operated as hostels in buildings for habitation, where it is necessary to first seek a decision from the Condominium’s General Meeting approving that use. For all other cases, the only thing the Condominium can do is have owners who represent at least more than the majority of the percentage of the building decide that a unit should not be allowed to do short-term leases, so that this is conveyed to the President of the City Hall, who will decide whether or not the short-term leases should be prohibited. However, in order to decide this, the Condominium needs to allege specific facts that took place for a continued period of time and which disrupted the rest and well-being of the owners of units at the building and/or affected the normal use of the same.
The Condominium, based on the fact that some units for short-term leases may use the common parts of the building more than the owners ot the remaining units, may decide that the owners of the units being used for short-term leases must pay an amount towards the use of the common services of the building up to 30% more than the yearly condominium fees that those owners already have to pay. However, for short-term leasing units which were already in business at the time this new law came into force, the Condominium can only approve the above mentioned 30% starting from November 2020.
Lisbon, 4th July 2019
By Rodrigo Noronha Mourão, Associate at EDGE International Lawyers – Litigation Department
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With the purpose of a better understanding of the legal concepts, the Law now defines economical unit as well as the contractual acquired rights which now should include not only remuneration, basic salary and its complements, but also social benefits paid by the employer. As a result whenever there’s a transfer of business affecting employees, the news is that the employee shall be entitled to maintain the rights in which social benefits are included.
Another relevant change is the right of opposition of the employee which now is established in the Law. The employee which contract is supposed to be transferred is given a period of 10 days after notification of such a transfer by the employer to oppose. This period is in fact a 5 days’ period to create an ah hoc commission to represent him/her in the negotiations, as well as another 5 days’ period to formally oppose in writing if that’s the employee’s decision.
In case opposition is filed by the employee, the employer cannot transfer such a contract to the transferee and in such case if there is termination of contract by the transferor, the general rules of unfair dismissal and respective compensation rights shall apply.
Also in the package of new changes to the Law we can highlight the new period of 2 years (previously it was of 1 year only) during which both the transferor and transferee can be found jointly liable for any claims which arise from the transfer of contract.
Lisbon, 26th June 2019
By EDGE International Lawyers – Employment Department
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After the UK referendum vote to leave the EU nearly three years ago on 23 rd June 2016, the exit date had been fixed for 29 th March 2019 under Article 50 of the Treaty of the European Union. Since then the deadline has been extended with the agreement of the EU
member states to grant a flexible extension of the Article 50 until 31 st October 2019. In
addition, on 31 st December transition period is due to end.
The UK Government published 2020 is the its Brexit White Paper explaining all
proposals for the future relationship between the UK and the EU and lays out five key areas
on which to focus including the economy, communities, the union, democracy and the UK’s
place in the world.
On 21 st February 2019 the Portuguese Ministers Council published the Draft Brexit
Law Proposal, designed to address the legal vacuum which would be created if the United
Kingdom left the European Union with no deal. Just over a month later, on 28 th March 2019, the Brexit Law number 327-A/2019 was approved. This Law has focussed on residency rights and the preservation of them.
Between the publication of the draft law and the final law some changes have
manifested themselves, specifically in relation to the exemption from the requirements and
supporting documents required for residency permits, which stipulate the rules applicable to third country nationals (Law no.23/200). This exemption was specifically mentioned in the draft law and applied to all British citizens as well as their family members. However the
new law states that the exemption only applies to British citizens and their family members
who have obtained a temporary residency permit and wish to renew it or who wish to obtain a permanent residency permit within 5 years of the date they established their residency in Portugal.
The good news for British citizens is that the interpretation given by the Portuguese
Government and the Portuguese Immigration Authorities (SEF) indicates that current
residency documents remain valid until the end of 2020 after which that United Kingdom
nationals will be issued with new documents by SEF. In addition, they will be exempt from
complying with third-country requirements when they renew their residence documents,
even if they do so after 2020.
Other practical issues include health care, and Portugal will not suspend the access
to healthcare, even if the UK does not create a similar regime for the Portuguese citizens
residing in the UK. Therefore residents will continue to have uninterrupted access to the
State healthcare system (SNS) and visitors, up to the transition period due date, will also
have access by showing their valid passport (even if they do not have insurance they will
only pay normal user fees and later UK will be invoiced with treatment charges). On other
hand, UK nationals living in Portugal up to the date of leaving the EU will have until 31 st
December 2020 to exchange their UK driving licence for a Portuguese one.
Lisbon, 5th June 2019
By Geoffrey Graham, Senior Partner at EDGE International Lawyers
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