Plan and Deliver

In these unprecedented times, a tried and tested formula for investment success is an attractive commodity.vJoana Neto Mestre, managing partner at MATLAW, gives James Matthews a few pointers on navigating one’s way through the Portuguese legal process.

If the purchase price of a property is agreed and there is a Covid19 lockdown that adversely affects the price, what is the legal position?

Unforeseen circumstances following parties’ agreement - such as a global pandemic-may negatively impact the agreed terms and are not deemed to be treated as contract default. In this case, Portuguese law states that the injured party may request the terminationor the amendment of the contract.

For transactions closed or completed before the worldwide spread of Covid-19 the application of those provisions was highly debated both at a national and international levels at were likely to be applicableto many cases. Yet the impact of the pandemic are no longer unpredicted circumstances, thus it’s highly questionable that a real estate transaction negotiated at the present time may be treated in the same way.

Does UK legal representation have any jurisdiction over Portugal?

Although we live in a global economy there is no “universal law”. In fact, the UK legal system is significantly different than the Portuguese one. Additionally, despite parties’ autonomy to choose the laws applicable to a certain contract, in real estate transactions one cannot ignore the legal framework of the country where the concerned property is located.

How stable is the Portuguese economy?

The Portuguese economy has become more stable over the last 5 years, mainly driven by tourism and inward investment. Businesses have felt the impact that the pandemic has had on travel. The Government is trying to prevent further outbreaks by actioning an on-going testing programme to minimise the risk of contamination.

Is it possible to expedite citizenship and if so at what cost?

You can apply for Portuguese citizenship followingat least sixconsecutive years of residency. The Golden Visa program allows nationals from non-EU countries to obtain Portuguese residence permits for investment purposes, which require shorter staying period. Individuals that have held a Golden Visa for at least six years can apply for Portuguese citizenship without needing to reside in the country permanently. The administrative charges for an initial application are approximately EUR 5,860.

How efficient is the Portuguese legal system?

The transaction process is fast and runs smoothly, including bank financing for foreign investors. However, it’s of utmost importance to carry out legal due diligence to prevent any issues at an early stage and before completion. It’s also recommended to set alternative dispute resolution (ADR) mechanism ssuch asarbitration, which is growing significantlyin the country.