Brief executive summary of the main legal issues for 2023. The purpose is to provide an overview of these changes to make it easier for companies to anticipate and implement them.
Key points:
Startups
Draft Law 56/XV on startups was presented at the end of 2022. This proposal establishes the legal definition of startup and scaleup, as well as a regulatory framework of incentives for developing the startup and scaleup ecosystem in Portugal. It is expected to be approved in the first quarter of 2023.
Listed companies
On December 7, 2022, the European Directive on boosting gender equality in the management positions of listed companies and related measures was published. This directive must be transposed by December 28, 2024, and amendments to Law 62/2017 of August 1 are foreseen. The implementation of this law is to be assessed in 2023 (five years after it entered into force on January 1, 2018).
Capital markets, banking and finance
The proposals for regulations and directives aimed at reforming the rules for admitting securities to trading on a regulated market in the European Union (“EU”) are under consultation until February 2023. Regarding Environmental, Social, and Governance (“ESG”), we highlight the rules established in the Taxonomy Regulation and the Delegated Regulation on Sustainable Financial Reporting (“SFDR”), which will both come into force in 2023. The non-performing loans directive must be transposed by the end of 2023. We also highlight the public consultation on the Portuguese Securities Market Commission’s (“CMVM”) proposal for a single regulation on issuer transparency and the regime applicable to takeover bids. Finally, we look at Law 4/2023, which aims to approve the Legal Regime for Asset Management.
Insolvency
On December 7, 2022, the European Commission published a proposal for a directive to harmonize aspects of insolvency law that essentially regulates the (i) recovery of assets of the insolvent estate, (ii) efficiency of procedures, and (iii) fair distribution of value among creditors. This proposal is expected to be processed in 2023.
Competition and EU law
We begin by summarizing the priorities of the Portuguese Competition Authority (“AdC”) for 2023. Between the first and second quarter of 2023, the European Commission is expected to review the merger control procedure. Between the second and third quarter, the Commission will review its notice on the definition of relevant market, which is essential for defining the limits of competition between companies. In mid-2023, the Foreign Subsidy Regulation (FSR) will enter into force. The transition period for companies to adapt to and comply with the new block exemption regulation for vertical agreements ends in May 2023.
Labor
In 2023, we expect to see many legislative changes under the Decent Work Agenda (Agenda do Trabalho Digno), which will raise doubts among companies. We will also see how the “four-day week” pilot program is implemented and evaluate whether implementing it definitively in the public and private sectors is feasible
Real Estate
The law approving the State Budget for 2023 makes changes to (i) the IMT exemption regime for the purchase of buildings for resale, (ii) the special IMT regime for real estate swaps, and (iii) the limits on the advance payment of rent and security deposits. We also emphasize the 2% limit on rent increases in 2023 introduced by Law 19/2022 of October 21. This legislation establishes extraordinary personal income tax (“PIT”) and corporate income tax (“CIT”) relief for rental income earned in 2023. We also highlight the continued lease protection—until December 31, 2027—for historical stores that have transitioned to the New Urban Lease Regime (“NRAU”). The municipalities and associations of municipalities have to comply, by December 31, 2023, with the obligation to include the land classification and qualification rules in the municipal and intermunicipal plans. Showing the trend towards bringing the construction sector in line with sustainability objectives, we highlight Decree-Law 84/2022 of December 9, which establishes a regime for promoting the use of renewable energy in municipal construction.
Public law and environment
The Portuguese Government presented a proposal for a decree-law that aims to simplify administrative activity by eliminating unnecessary licenses, authorizations, and administrative acts. The legal regime for the prevention of soil contamination to safeguard human health and the environment (“PRoSolos”) is also expected to be published in 2023.
Energy
We highlight some of the exceptional measures for implementing renewable energy production and storage projects and initiatives: (i) urban planning operations for projects with a capacity of up to and including 1 MW are exempt from prior urban planning control; (ii) the installation of renewable energy production plants, storage facilities, production units for self-consumption (“ UPACs”), and facilities for the production of hydrogen by water electrolysis are now subject to prior control through a prior notice, not depending on the existence of a prior information request.
Tax
We begin by highlighting the amendments that the law approving the State Budget for 2023 makes to PIT, CIT, value-added tax (“VAT”), stamp duty, property transfer tax (“IMT”), and tax benefits. We also highlight how the tax calendar is made more flexible to make it easier for companies to manage their invoices and inventories. We also look at the regulations for applying the temporary solidarity contribution to the energy and food distribution sectors. Finally, we summarize several changes to the forms for reporting certain tax obligations.
Intellectual property
In November 2022, the European Commission presented proposals to amend the regulation and directive on designs. This new legal framework aims to make the EU design protection system more appropriate for the digital age. The Unitary Patent Regulation and the international agreement that forms the basis for setting up the Unified Patent Court will enter into force in 2023. This court will have sole jurisdiction over EU patent disputes, regardless of whether unitary effect patents or “classic” EU patents are involved. The Portuguese Government approved Draft Law 52/XV to transpose the long-awaited directives on copyright protection in the digital environment. The directive is expected to be discussed and approved in early 2023.
Personal data and privacy
The European Data Protection Board (“EDPB”) is currently examining the adequacy decision for legitimizing personal data transfers to the United States (“US”). Once the EDPB’s opinion has been published, the proposal will still have to be approved by a committee consisting of EU Member State representatives.
Digital and artificial intelligence
Under the Digital Markets Act (“DMA”), digital platforms that meet the criteria established in the DMA will have to notify the European Commission of their designation. As of May 2, 2023, these platforms will have six months to adapt their practices to the obligations imposed by the DMA. The Digital Services Act (“DSA”) will apply in full to all online intermediary services as of February 17, 2024. Digital platforms have to publish their average number of active users by February 17, 2023. We also highlight the proposal for a regulation of the European Parliament and of the Council aimed at establishing harmonized rules on artificial intelligence.
Cybersecurity
We highlight Directive (EU) 2022/2555, which entered into force on January 16, 2023. This new directive aims to harmonize cybersecurity requirements across the EU.