Doing Business 2019 Portugal Economy Profile Portugal Page 1 Doing Business 2019 Portugal Economy Profile of Portugal Doing Business 2019 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, and the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time, total tax and contribution rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality Page 2 Doing Business 2019 Portugal About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business offers detailed subnational reports, which exhaustively cover business regulation and reform in different cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The first Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has benefited from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. More about Doing Business (PDF, 5MB) Page 3 Doing Business 2019 Portugal Ease of Doing Business in DB 2019 Rank Region OECD high income 190 1 Portugal Income Category High income 34 DB 2019 Ease of doing business score Population 10,293,718 0 100 City Covered Lisbon 76.55 DB 2019 Ease of Doing Business Score 0 100 82.65: United Kingdom (Rank: 9) 78.90: Germany (Rank: 24) 77.80: Regional Average (OECD high income) 77.68: Spain (Rank: 30) 77.29: France (Rank: 32) 76.55: Portugal (Rank: 34) Note: The ease of doing business score captures the gap of each economy from the best regulatory performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s ease of doing business score is reflected on a scale from 0 to 100, where 0 represents the lowest and 100 represents the best performance. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Portugal 1 1 16 28 32 36 35 39 57 60 55 64 82 Rank 112 109 136 163 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Ease of Doing Business Score on Doing Business topics - Portugal 100.00 100 90.89 86.45 83.75 78.36 80.01 80 73.17 67.91 60.00 Score 60 45.00 40 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Page 4 Doing Business 2019 Portugal Starting a Business This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and formally operate To make the data comparable across economies, several assumptions about the a company (number) business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes. • Preregistration (for example, name verification or reservation, notarization) The business: • Registration in the economy’s largest business - Is a limited liability company (or its legal equivalent). If there is more than one type city of limited liability company in the economy, the most common among domestic firms • Postregistration (for example, social security is chosen. Information on the most common form is obtained from incorporation registration, company seal) lawyers or the statistical office. - Operates in the economy’s largest business city. For 11 economies the data are • Obtaining approval from spouse to start a business or to leave the home to register the also collected for the second largest business city. company - The entire office space is approximately 929 square meters (10,000 square feet). - Is 100% domestically owned and has five owners, none of whom is a legal entity; • Obtaining any gender specific document for has a start-up capital of 10 times income per capita and has a turnover of at least company registration and operation or national 100 times income per capita. identification card - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does not perform foreign trade Time required to complete each procedure activities and does not handle products subject to a special tax regime, for example, (calendar days) liquor or tobacco. It does not use heavily polluting production processes. • Does not include time spent gathering - Leases the commercial plant or offices and is not a proprietor of real estate and the information amount of the annual lease for the office space is equivalent to the income per capita. • Each procedure starts on a separate day (2 procedures cannot start on the same day) - Does not qualify for investment incentives or any special benefits. - Has at least 10 and up to 50 employees one month after the commencement of • Procedures fully completed online are recorded operations, all of whom are domestic nationals. as ½ day - Has a company deed that is 10 pages long. • Procedure is considered completed once final document is received The owners: • No prior contact with officials - Have reached the legal age of majority. If there is no legal age of majority, they are assumed to be 30 years old. Cost required to complete each procedure (% of - Are sane, competent, in good health and have no criminal record. income per capita) - Are married and the marriage is monogamous and registered with the authorities. - Where the answer differs according to the legal system applicable to the woman or • Official costs only, no bribes man in question (as may be the case in economies where there is legal plurality), the • No professional fees unless services required by answer used will be the one that applies to the majority of the population. law or commonly used in practice Paid-in minimum capital (% of income per capita) • Funds deposited in a bank or with third party before registration or up to 3 months after incorporation Page 5 Doing Business 2019 Portugal Starting a Business - Portugal Standardized Company Legal form Sociedade por Quotas Paid-in minimum capital requirement EUR 0 City Covered Lisbon Indicator Portugal OECD high Best Regulatory income Performance Procedure – Men (number) 6 4.9 1 (New Zealand) Time – Men (days) 6.5 9.3 0.5 (New Zealand) Cost – Men (% of income per capita) 2.0 3.1 0.0 (Slovenia) Procedure – Women (number) 6 4.9 1 (New Zealand) Time – Women (days) 6.5 9.3 0.5 (New Zealand) Cost – Women (% of income per capita) 2.0 3.1 0.0 (Slovenia) Paid-in min. capital (% of income per capita) 0.0 8.6 0.0 (117 Economies) Figure – Starting a Business in Portugal and comparator economies – Ranking and Score DB 2019 Starting a Business Score 0 100 94.58: United Kingdom (Rank: 19) 93.27: France (Rank: 30) 91.19: Regional Average (OECD high income) 90.89: Portugal (Rank: 57) 86.91: Spain (Rank: 86) 83.58: Germany (Rank: 114) Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. Page 6 Doing Business 2019 Portugal Figure – Starting a Business in Portugal – Procedure, Time and Cost Time (days) Cost (% of income per capita) 2.5 6 Cost (% of income per capita) 2 5 Time (days) 4 1.5 3 1 2 0.5 1 0 0 1 2 3 4 5 *6 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Page 7 Doing Business 2019 Portugal Details – Starting a Business in Portugal – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Register at the one-stop shop (Empresa na Hora) 1 day EUR 360 or EUR 220 Agency : One-Stop Shop (Empresa na Hora) There are two ways of starting a business in Portugal: 1) "On the Spot Firm" (Empresa na Hora). This is currently the most common way to register a business. This service enables to set up a company in less than an hour at a single contact point. As long as the partners have all of necessary documents, the company is set up immediately at one of the desks of the On the Spot Firm offices, available throughout the country, regardless of the location of the company’s headquarters. The first step is to choose a name from the list of pre-approved names available online or to submit a name of its choice and obtain a company name certificate. This certificate can be requested online and it is valid for 3 months. If the name of the company is composed by the name of its shareholders, it may be approved at the moment of incorporation of the company at the one-stop shop. Then entrepreneurs need to choose one of the pre-approved standard company deeds, available at Empresa na Hora. The company founders need to present their identification cards. At the service desk, it is possible to get both the articles of association and commercial registration. Partners will receive a temporary code to access the certificate of incorporation, the corporate identification card, the Social Security number, and the original by-laws. 2) "Online company setting up” (Empresa Online): This service enables to set up a company through the Internet in 1 to 2 days. The access to the service On-Line Company (‘Empresa Online’) can be made through the Business Portal (www.portaldaempresa.pt). The costs are the following Incorporation under "Empresa na Hora": EUR 360; Incorporation under "Empresa on-line": (i) EUR 360 if not incorporated with pre- approved by-laws, or (ii) EUR 220 if incorporated with pre-approved by-laws. 2 Open a bank account and obtain a Bank Identification Number (IBAN) 1 day no charge Agency : Bank Business founders must open a bank account and obtain a Bank Identification Number (IBAN). 3 File the declaration of commencement of activity with the Tax Authority and 1 day no charge register for VAT Agency : Tax Authority The declaration of commencement of activity has to be submitted at the Tax Authorities’ Offices along with evidence that the company was incorporated. Business founders must provide the Tax Authority with their Bank Identification Number (IBAN) and their corporate identification card. VAT registration can be done when submitting the declaration of commencement of activity. 4 Register with Social Security 2 days no charge Agency : Social Security Agency The employers shall communicate the admission of employees to the Portuguese Social Security services of the area of the employee's workplace online at www.seg-social.pt within (i) 24 hours preceding the employment agreement’s entry into force; or (ii) 24 hours following the beginning of the activity, whenever – due to exceptional and duly justified reasons in connection with the conclusion of very short term employment agreements or due to shift work – such notice cannot be served within the set out deadline. The non-compliance with this obligation implies the assumption that the relevant employee started to work for the company on the 1st working day of the sixth month prior to the occurrence of the infringement. In case the relevant employee is receiving sickness or unemployment benefits there is also an assumption that the employ started to work for the company on the date in which those benefits were granted, whereby the company will be severally liable for returning the whole amounts unduly received by the employee by the Portuguese Social Security. Moreover, the non-compliance with the above mentioned obligation may result in a minor or a serious misdemeanor, depending on its compliance within 24 hours after the deadline or after that, corresponding to a fine from € 75 up to € 4,800. Pursuant to the enacted Law No. 83-C/2013, of 31 December 2013, the above mentioned communication will now have to be made online. Page 8 Doing Business 2019 Portugal 5 Register for the workers' accident insurance at a private insurer 1 day no charge Agency : Private Insurer In order to guarantee an effective compensation of damages arising from work accidents covering employees, trainees and paid managers, the Portuguese legislator requires from the employer the transfer of all its responsibility to insurance companies, before the entry into force of the relevant agreements. In case not all the responsibilities are transferred by the employer to the insurance company, the first one will be solely responsible in the extent of the non transferred responsibilities. Furthermore, the non-compliance with the above mentioned obligation may trigger a very serious misdemeanor, implying the payment of a fine between € 3,264 and € 19,380. 6 Register employees with the Labor Compensation Funds (FCT and FGCT) Less than one day no charge Agency : Labor Compensation Funds (Fundo de Compensação do Trabalho - (online procedure) FCT and Fundo de Garantia de Compensação do Trabalho - FGCT) According to the Portuguese labor law (Law 70 of August 30, 2013), employees shall be registered in two Labor Compensation Funds (Fundo de Compensação do Trabalho - FCT and Fundo de Garantia de Compensação do Trabalho - FGCT). Registration at FGCT takes place automatically once one registers with FCT online. The contribution to these funds is intended to enable the payment of part of the compensation eventually due in case of termination of the employment agreement. The employer is responsible for the monthly payment of the amount of 0.925% to FCT and of 0.075% to FGCT, both calculated on the amount of base salary and seniority premiums due to each employee. Takes place simultaneously with previous procedure. Page 9 Doing Business 2019 Portugal Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2018. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse To make the data comparable across economies, several assumptions about the (number) construction company, the warehouse project and the utility connections are used. • Submitting all relevant documents and obtaining The construction company (BuildCo): all necessary clearances, licenses, permits and certificates - Is a limited liability company (or its legal equivalent) and operates in the economy’s largest business city. For 11 economies the data are also collected for the second • Submitting all required notifications and receiving largest business city. all necessary inspections - Is 100% domestically and privately owned; has five owners, none of whom is a • Obtaining utility connections for water and legal entity. Has a licensed architect and a licensed engineer, both registered with sewerage the local association of architects or engineers. BuildCo is not assumed to have any other employees who are technical or licensed experts, such as geological or • Registering and selling the warehouse after its completion topographical experts. - Owns the land on which the warehouse will be built and will sell the warehouse Time required to complete each procedure upon its completion. (calendar days) The warehouse: • Does not include time spent gathering information - Will be used for general storage activities, such as storage of books or stationery. - Will have two stories, both above ground, with a total constructed area of • Each procedure starts on a separate day— approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 though procedures that can be fully completed meters (9 feet, 10 inches) high and will be located on a land plot of approximately online are an exception to this rule 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the • Procedure is considered completed once final warehouse is valued at 50 times income per capita. document is received - Will have complete architectural and technical plans prepared by a licensed architect. If preparation of the plans requires such steps as obtaining further • No prior contact with officials documentation or getting prior approvals from external agencies, these are counted Cost required to complete each procedure (% of as procedures. income per capita) - Will take 30 weeks to construct (excluding all delays due to administrative and regulatory requirements). • Official costs only, no bribes The water and sewerage connections: Building quality control index (0-15) - Will be 150 meters (492 feet) from the existing water source and sewer tap. If there • Quality of building regulations (0-2) is no water delivery infrastructure in the economy, a borehole will be dug. If there is • Quality control before construction (0-1) no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. • Quality control during construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average • Quality control after construction (0-3) wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300 • Liability and insurance regimes (0-2) gallons) a day. • Professional certifications (0-4) - Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Page 10 Doing Business 2019 Portugal Dealing with Construction Permits - Portugal Standardized Warehouse Estimated value of warehouse EUR 917,285.10 City Covered Lisbon Indicator Portugal OECD high Best Regulatory income Performance Procedures (number) 14 12.7 None in 2017/18 Time (days) 160 153.1 None in 2017/18 Cost (% of warehouse value) 1.2 1.5 None in 2017/18 Building quality control index (0-15) 11.0 11.5 15.0 (3 Economies) Figure – Dealing with Construction Permits in Portugal and comparator economies – Ranking and Score DB 2019 Dealing with Construction Permits Score 0 100 80.29: United Kingdom (Rank: 17) 79.30: France (Rank: 19) 78.16: Germany (Rank: 24) 75.41: Regional Average (OECD high income) 73.17: Portugal (Rank: 60) 70.60: Spain (Rank: 78) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators. Figure – Dealing with Construction Permits in Portugal – Procedure, Time and Cost Time (days) Cost (% of warehouse value) 160 0.9 140 0.8 Cost (% of warehouse value) 0.7 120 0.6 Time (days) 100 0.5 80 0.4 60 0.3 40 0.2 20 0.1 0 0 1 2 3 *4 5 6 7 *8 9 10 11 12 13 14 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Page 11 Doing Business 2019 Portugal Figure – Dealing with Construction Permits in Portugal and comparator economies – Measure of Quality 15 14.0 11.0 11.0 11.5 Index score 9.5 10 9.0 5 0 Portugal France Germany Spain United Kingdom OECD high income Details – Dealing with Construction Permits in Portugal – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Obtain approval of project designs from Municipality and other relevant 75 days EUR 379 entities Agency : Municipality The land-use regime in the area of the site is regulated by a detail plan in force or an approved allotment project. A building notice procedure should then be followed to obtain approval of the building design. BuildCo submits an application for a building permit to the municipality. The application must comply with a statutory list of submission requirements. The architectural design and liability declarations of the designers are among the elements that must be submitted. The municipality verifies whether the application complies with the administrative requirements and the architectural design complies with the detail plan or approved allotment project and building regulations. The municipality also assess if external public entities must be consulted. If that is the case, the municipality forwards the application to the coordination and regional development commission that sends it to the external public entities that have to be consulted. Their appraisals must be sent back to the commission within 20 or 40 days, depending on nature of the external public entity. The applicant may also choose to consult directly with the external public entities for a forehand approval/appraisal of the design and submit their answers together with the application to the municipality, as it is the case with BuildCo. The municipality must decide on the application within 20 days of its submission, or 60 days if external public entities are consulted. The cost to obtain the approval of the building design is EUR 378.5. The legal basis of the above is the following: 1. Decree-Law No. 555/99 with amendments (Art 4.4.c, 10.1, 10.2, 11.2. 11.3, 13-B.2, 13-B.3, 34.5, 35.4 and 35.7) 2. Ordinance No. 113/2015 (Annex I, no. 1 to 6 and 15) 3. Ordinance No. 228/2015 (August 3, 2015) 4. Regulation of Permissions, Taxes and Other Revenues of the Municipality of Oeiras, Art 191.1. 5. Table of Fees and Other Revenues of the Municipality of Oeiras (2014), Art 16.7 2 Obtain building permit and pay fee 30 days EUR 2,235 Agency : Municipality Within one year from the date of notification of final approval of the building design, BuildCo must request the building permit to be issued and pay the relevant taxes. The municipality issues the building permit within 30 days of the date of the request. There are statutory requirements on how to request the building permit certificate and also on the content of the certificate. BuildCo posts an announcement at the construction site within 10 days after a building permit is obtained. This announcement must follow a standardised format and content established by law and remain visible until the end of the construction works. The cost to obtain the building permit is EUR 388.58 for building permit issuance plus EUR 1.42 per sq. meter. The legal basis of the above is the following: 1. Decree-Law No. 555/99 with amendments (Art 34.2, 34.3, 35.8, 35.9, 78.5 and 80.2) 2. Ordinance 228/215 3. Regulation of Permissions, Taxes and Other Revenues of the Municipality of Oeiras, Art 191.1. 4.Table of Fees and Other Revenues of the Municipality of Oeiras (2014), Art 5. This procedure can only be actioned once the building approval has been granted. For that reason it cannot be a simultaneous process with the previous one. Page 12 Doing Business 2019 Portugal 3 Inform the Municipality about the beginning of construction 1 day no charge Agency : Municipality Based on Article 80-A of Decree-Law No. 555/99 with amendments, BuildCo has until five days before the start of the construction works on the site to inform the municipality of his intentions, as well as of the identity of the technical director responsible for the works. This procedure can only be actioned upon the start of the construction, thus it cannot be a simultaneous process with the previous one. 4 Inform the Labor Conditions Agency about the new construction site 1 day no charge Agency : Labor Conditions Agency According to Art 15.1, 15.2 and 15.3 of Decree-Law 273/2003, BuildCo must inform the Labor Conditions Agency before starting construction work. This is only necessary if one of the following conditions occur: 1. Construction work takes longer than 30 days and have more than 20 workers simultaneously on the site at any moment; or 2. Construction work takes more than 500 man days of work. There are statutory requirements on the content of the notice to the Labor Conditions Agency. Since this procedure can be addressed in the Labor Conditions Agency, it can be a simultaneous one. 5 Receive inspection from the Labor Conditions Agency 1 day no charge Agency : Labor Conditions Agency The Labor Conditions Agency may perform on-site inspections during construction. The Agency has been conducting more inspections in recent years. The inspections mainly examine health and safety conditions. The agency will also check for employment contracts and the legal status of workers. A construction site can be inspected more than once during the term of a building permit. Source:Activity of Labor Conditions Agency: 2015 report, pp. 133-135, Decree-law 273/2003, Art. 15, 29 October. This procedure can only be actioned once the request to the Labor Conditions Agency has been done. For that reason it cannot be a simultaneous process with the previous one. 6 Receive inspection from Municipality 1 day no charge Agency : Municipality According to Art. 93, 94, 95 and 96 of Decree-Law no. 555/99 with amendments, during construction, other public authorities may also carry out unscheduled inspections to the site to accomplish their supervision role. The municipality may carry out site inspections without notifying the developer beforehand. All aspects of the construction works can be checked during inspections, including the construction log book. Construction works are selected randomly, except if complaints have been made. Such cases are more likely to undergo a site inspection by municipal building inspectors. The Real Estate and Construction Institute may also carry out site inspections. This procedure can only be actioned once the construction has started. For that reason it cannot be a simultaneous process with the previous one. 7 Receive inspection from Institute of Public Markets, Real Estate and 1 day no charge Construction (IMPIC - Instituto dos Mercados Públicos, do Imobiliário e da Construção) Agency : Institute of Public Markets, Real Estate and Construction (Instituto dos Mercados Públicos, do Imobiliário e da Construção). The construction site might also receive unscheduled inspections from the Institute of Construction and Real Estate (Instituto da Construção e do Imobiliário - INCI) to check if BuildCo has the “alvara” and the construction permit. The legal basis is Decree Law no. 232/2015, October 13 Law no. 41/2015, June 3. This procedure can only be actioned once the construction has finished. For that reason it cannot be a simultaneous process with the previous one. 8 Submit application for a water and sewage connection at the Water and 1 day no charge Sanitation Authority Agency : Municipal Water and Sanitation Authority This procedure can only be actioned once the occupancy permit has been granted. For that reason it cannot be a simultaneous process with the previous one. 9 Receive inspection by Water and Sanitation Authority 1 day EUR 451 Agency : Municipal Water and Sanitation Authority This procedure can be done once the request for these services has been submitted. For this reason, it cannot be a simultaneous one with the previous step. Page 13 Doing Business 2019 Portugal 10 Obtain water and sewerage connection 31 days EUR 7,571 Agency : Municipal Water and Sanitation Authority The steps for obtaining a water and sewerage connection are as follows: – BuildCo informs the utility until 5 working days before the beginning of the construction works on the water and sewerage networks. –During construction, the utility, directly or through a certified entity, can carry out site inspections whenever deemed appropriate and without notifying the developer beforehand. –BuildCo informs the utility when the construction works on the water and sewerage networks are complete and asks for a final site inspection. Liability declarations of the technicians responsible for construction of the water and sewage networks must then be submitted. – Within 7 days the utility, or a certified entity on its behalf, carries out a final inspection of the water and sewerage networks. Pipes must not be covered before being inspected. –If construction was done according to the approved design and the network met the test conditions, the utility considers the construction works on the water and sewerage networks complete. –BuildCo demands the permanent connection to the public water and sewerage networks. The water connection is carried out by the water utility within 15 days. The sewerage connection is carried out by BuildCo. –BuildCo and the water utility celebrate a water supply contract and the water meters are installed within 3 days. Usually these tasks are carried out before the construction of the building is complete. A water and sewerage connection is required to get an occupancy permit. BuildCo must pay a total of EUR 7,570.50 to obtain water and sewerage connection. The cost breakdown is the following: 1. Connection to the water network: For distances until 20 m – no charge. For distances greater than 20 m: 13.29 € / meter 2. Connection to the sewerage network: 37.18 € / meter This procedure can only be actioned once request for these services has been donet. For that reason it cannot be a simultaneous process with the previous one. 11 Submit application for occupancy permit 1 day no charge Agency : Municipality Once the building has been completed, BuildCo requests the municipality to issue an occupancy permit for the building. There is a statutory list of submission requirements to request an occupancy permit. If the actual construction works executed on the site differ from the approved designs, an updated set of design documents must be presented to the municipality with the request for the occupancy permit. The construction log book, and a liability declaration by the construction director must be presented as well. In this declaration, the construction director states that the construction works were carried out according to the approved design, and, where applicable, changes comply with the relevant legal and regulatory requirements. Within 10 days of the submission of the request the municipality informs BuildCo if the occupancy permit will be granted on the basis of the liability declaration mentioned above. No site inspection is required, unless the municipality has doubts about whether the construction works comply with the approved design. If a site inspection is determined, it takes place within 15 days. 12 Obtain occupancy permit 10 days EUR 387 Agency : Municipality Once BuildCo has been notified that the occupancy permit will be issued, it has one year to request it from the City Hall. There are statutory requirements for applying for the occupancy permit and for the content of the permit. The occupancy permit is granted by the City Hall within 5 days of the submission of the request. The building can start being legally used only after the occupancy permit is issued. According to Article 7 of Fee Schedule (2014) from Oeiras, the occupancy permit costs EUR 88.68 + 11.49 per 50m2 per section. Page 14 Doing Business 2019 Portugal 13 Register the building with the Tax Authority 1 day no charge Agency : Tax Authority Once the occupancy permit has been granted, BuildCo has 60 days to inform the tax authority. There is an official form for this purpose. The architectural design, updated with any modification carried out during construction, is attached to the official form. The tax authority updates the description of the property in the tax authority registry. A site inspection is only required if there are not enough elements to assess the taxable value of the property. The legal basis of the above is the following: 1- Decree-Law No. 287/2003 with amendments, Art 13.1.d., 13.3, 37.1 and 37.2 2- Declaration for enrollment or updating of urban buildings in the array (Model 1) This procedure can be done in parallel with the registration. For that reason it can be a simultaneous process with the previous one. 14 Register the building with the Real Estate Registry 5 days EUR 60 Agency : Real Estate Registry Once the description of the property in the tax authority has been updated, BuildCo requests the update of the description in the Real Estate Registry. The update is done within 5-10 days. If the request is deemed urgent, the registration takes place within 1 day. The cost to register the building with the Real Estate Registry is EUR 60. The legal basis is the following: 1- Decree-Law No. 224/84 with amendments, Art 75.1 2- Decree-Law No. 322-A/2001 with amendments. Art 21.3.1 This procedure can only be actioned once the water and sewage connection have been installed. For that reason it cannot be a simultaneous process with the previous one. Takes place simultaneously with previous procedure. Page 15 Doing Business 2019 Portugal Details – Dealing with Construction Permits in Portugal – Measure of Quality Answer Score Building quality control index (0-15) 11.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly specified in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer; Private firm. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during construction? Inspections by in- 1.0 (0-2) house engineer; Unscheduled inspections. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a final inspection required by law to verify that the building was built in accordance Yes, in-house 2.0 with the approved plans and regulations? (0-2) engineer submits report for final inspection. Do legally mandated final inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 1.0 Which parties (if any) are held liable by law for structural flaws or problems in the building Architect or 1.0 once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Professional in charge of the supervision; Construction company. Which parties (if any) are required by law to obtain an insurance policy to cover possible No party is 0.0 structural flaws or problems in the building once it is in use (Latent Defect Liability Insurance required by law or Decennial Insurance)? (0-1) to obtain insurance . Professional certifications index (0-4) 2.0 What are the qualification requirements for the professional responsible for verifying that the University degree 1.0 architectural plans or drawings are in compliance with existing building regulations? (0-2) in architecture or engineering; Being a registered architect or engineer. Page 16 Doing Business 2019 Portugal What are the qualification requirements for the professional who supervises the construction University degree 1.0 on the ground? (0-2) in engineering, construction or construction management; Being a registered architect or engineer. Page 17 Doing Business 2019 Portugal Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions about the (number) warehouse, the electricity connection and the monthly consumption are used. • Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. • Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the data are receiving all necessary inspections also collected for the second largest business city. • Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is in an purchasing material for these works area with no physical constraints. For example, the property is not near a railway. - Is a new construction and is being connected to electricity for the first time. • Concluding any necessary supply contract and - Has two stories with a total surface area of approximately 1,300.6 square meters obtaining final supply (14,000 square feet). The plot of land on which it is built is 929 square meters Time required to complete each procedure (10,000 square feet). (calendar days) The electricity connection: • Is at least 1 calendar day - Is a permanent one with a three-phase, four-wire Y connection with a subscribed • Each procedure starts on a separate day capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 • Does not include time spent gathering kilowatt (kW). information - Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution network and is either overhead or underground, whichever is more • Reflects the time spent in practice, with little common in the area where the warehouse is located and requires works that involve follow-up and no prior contact with officials the crossing of a 10-meter road (such as by excavation or overhead lines) but are all Cost required to complete each procedure (% of carried out on public land. There is no crossing of other owners’ private property because the warehouse has access to a road. income per capita) - Does not require work to install the internal wiring of the warehouse. This has • Official costs only, no bribes already been completed up to and including the customer’s service panel or • Value added tax excluded switchboard and the meter base. The reliability of supply and transparency of The monthly consumption: tariffs index (0-8) - It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 • Duration and frequency of power outages (0–3) p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that • Tools to monitor power outages (0–1) there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 kWh. • Tools to restore power supply (0–1) - If multiple electricity suppliers exist, the warehouse is served by the cheapest • Regulatory monitoring of utilities’ performance supplier. (0–1) - Tariffs effective in January of the current year are used for calculation of the price of electricity for the warehouse. Although January has 31 days, for calculation • Financial deterrents limiting outages (0–1) purposes only 30 days are used. • Transparency and accessibility of tariffs (0–1) Price of electricity (cents per kilowatt-hour)* • Price based on monthly bill for commercial warehouse in case study *Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor the ranking on the ease of getting electricity. Page 18 Doing Business 2019 Portugal Getting Electricity - Portugal Standardized Connection Price of electricity (US cents per kWh) 25.2 Name of utility EDP Distribuição - Energia, SA City Covered Lisbon Indicator Portugal OECD high Best Regulatory income Performance Procedures (number) 5 4.5 3 (25 Economies) Time (days) 65 77.2 18 (3 Economies) Cost (% of income per capita) 34.5 64.2 0.0 (3 Economies) Reliability of supply and transparency of tariff index (0-8) 8 7.5 8.0 (27 Economies) Figure – Getting Electricity in Portugal and comparator economies – Ranking and Score DB 2019 Getting Electricity Score 0 100 98.79: Germany (Rank: 5) 96.45: United Kingdom (Rank: 7) 92.01: France (Rank: 14) 86.45: Portugal (Rank: 32) 85.47: Regional Average (OECD high income) 83.00: Spain (Rank: 48) Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity. Page 19 Doing Business 2019 Portugal Figure – Getting Electricity in Portugal – Procedure, Time and Cost Time (days) Cost (% of income per capita) 40 60 35 Cost (% of income per capita) 50 30 Time (days) 40 25 20 30 15 20 10 10 5 0 0 1 *2 3 *4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Figure – Getting Electricity in Portugal and comparator economies – Measure of Quality 8 8 8 8 8 8 7.5 7 6 Index score 5 4 3 2 1 0 Portugal France Germany Spain United Kingdom OECD high income Page 20 Doing Business 2019 Portugal Details – Getting Electricity in Portugal – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Submit application to EDP and await estimate 18 calendar days EUR 6,235.59 Agency : EDP ​Distribuição The customer must submit to the utility an application for a new connection ('pedido de ligação à rede'). The location map of the warehouse needs to be attached to the application, along with information on the requested capacity. An application fee must also be paid. The utility then reviews the application and presents a cost estimate to the client. 2 Receive a site visit by EDP for preparation of the cost estimate 1 calendar day EUR 0 Agency : EDP ​Distribuição A representative from the utility visits the site of the warehouse to determine the location of the external connection works and to verify if the client's connection point is ready. The client's engineer or technician is normally present to discuss any necessary items with the utility. 3 Receive external works from EDP 45 calendar days EUR 0 Agency : EDP ​Distribuição In Lisbon the external connection works are usually carried out by the utility, but they can also be done by the client's contractor. Costs charged by the utility are regulated by ERSE, the national energy regulator, but costs can be negotiated if works are done by a private contractor. If works are carried out by the utility, the excavation permit for works crossing a road will be obtained by the utility without the client's involvement. 4 Obtain internal inspection and certificate from certifying entity 12 calendar days EUR 99.4 Agency : Private Inspection Utility Once the internal wiring is completed, the client must hire a private certifying entity to carry out an inspection of the warehouse. Upon a successful inspection, the entity will issue a certificate stating that the internal wiring is ready to be used ('certificate de exploração da instalação elétrica'). The certificate is required to apply for the meter installation and final connection. The list of entities providing inspections includes the Instituto Eletrotécnico Português (IEP), Laboratório Industrial da Qualidade (LIQ) and Instituto de Soldadura e Qualidade (ISQ). 5 Conclude supply contract and receive meter installation by EDP 2 calendar days EUR 0 Agency : EDP ​Comercial The customer must choose an electricity supplier and sign a supply contract before the meter installation. The client must present the supply contract and the internal wiring certificate to request the meter installation and final connection. Takes place simultaneously with previous procedure. Page 21 Doing Business 2019 Portugal Details – Getting Electricity in Portugal – Measure of Quality Answer Reliability of supply and transparency of tariff index (0-8) 8 Total duration and frequency of outages per customer a year (0-3) 3 System average interruption duration index (SAIDI) 0.6 System average interruption frequency index (SAIFI) 0.6 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of Yes supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages Yes exceed a certain cap? Communication of tariffs and tariff changes (0-1) 1 Are effective tariffs available online? Yes Link to the website, if available online www.erse.pt Are customers notified of a change in tariff ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Page 22 Doing Business 2019 Portugal Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on To make the data comparable across economies, several assumptions about the immovable property (number) parties to the transaction, the property and the procedures are used. • Preregistration procedures (for example, The parties (buyer and seller): checking for liens, notarizing sales agreement, paying property transfer taxes) - Are limited liability companies (or the legal equivalent). - Are located in the periurban area of the economy’s largest business city. For 11 • Registration procedures in the economy's largest economies the data are also collected for the second largest business city. business city. - Are 100% domestically and privately owned. • Postregistration procedures (for example, filling - Have 50 employees each, all of whom are nationals. title with municipality) - Perform general commercial activities. Time required to complete each procedure The property (fully owned by the seller): (calendar days) - Has a value of 50 times income per capita, which equals the sale price. • Does not include time spent gathering - Is fully owned by the seller. information - Has no mortgages attached and has been under the same ownership for the past • Each procedure starts on a separate day - 10 years. though procedures that can be fully completed - Is registered in the land registry or cadastre, or both, and is free of title disputes. online are an exception to this rule - Is located in a periurban commercial zone, and no rezoning is required. - Consists of land and a building. The land area is 557.4 square meters (6,000 • Procedure is considered completed once final square feet). A two-story warehouse of 929 square meters (10,000 square feet) is document is received located on the land. The warehouse is 10 years old, is in good condition, has no • No prior contact with officials heating system and complies with all safety standards, building codes and legal requirements. The property, consisting of land and building, will be transferred in its Cost required to complete each procedure (% of entirety. property value) - Will not be subject to renovations or additional construction following the purchase. • Official costs only (such as administrative fees, - Has no trees, natural water sources, natural reserves or historical monuments of duties and taxes). any kind. - Will not be used for special purposes, and no special permits, such as for • Value Added Tax, Capital Gains Tax and illicit residential use, industrial plants, waste storage or certain types of agricultural payments are excluded activities, are required. - Has no occupants, and no other party holds a legal interest in it. Quality of land administration index (0-30) • Reliability of infrastructure index (0-8) • Transparency of information index (0–6) • Geographic coverage index (0–8) • Land dispute resolution index (0–8) • Equal access to property rights index (-2–0) Page 23 Doing Business 2019 Portugal Registering Property - Portugal Indicator Portugal OECD high Best Regulatory income Performance Procedures (number) 1 4.7 1 (4 Economies) Time (days) 10 20.1 1 (New Zealand) Cost (% of property value) 7.3 4.2 0.0 (Saudi Arabia) Quality of the land administration index (0-30) 20.0 23.0 None in 2017/18 Figure – Registering Property in Portugal and comparator economies – Ranking and Score DB 2019 Registering Property Score 0 100 78.36: Portugal (Rank: 36) 77.17: Regional Average (OECD high income) 75.34: United Kingdom (Rank: 42) 71.74: Spain (Rank: 58) 65.70: Germany (Rank: 78) 63.33: France (Rank: 96) Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators. Figure – Registering Property in Portugal – Procedure, Time and Cost Time (days) Cost (% of property value) 10 8 7 Cost (% of property value) 8 6 Time (days) 5 6 4 4 3 2 2 1 0 0 1 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Page 24 Doing Business 2019 Portugal Figure – Registering Property in Portugal and comparator economies – Measure of Quality 30 25.5 25 24.0 23.0 22.0 22.5 Index score 20.0 20 15 10 5 0 Portugal France Germany Spain United Kingdom OECD high income Details – Registering Property in Portugal – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Register the property at the Real Property Registry 10 days EUR 67,336.81; Agency : Land Registry (Registo Predial) (6.5% of the of the It is possible to register a property transfer in Portugal at any of the locations of the one- property’s fiscal value stop shop “On the spot house” (Casa pronta, www.casapronta.pt) in person. In April or sale price, 2010, there were 33 locations in Lisboa, and 346 locations in all of Portugal. Banks can whichever is higher + request that a public employee comes with a laptop with secured access to the database to 0.8% stamp duty and complete the property transfer in the bank (for free) without going to a Casa pronta 375 EUR as a Land location. Also real estate agents can request that a public employee comes with a laptop Registration fee) with secured access to the database to complete the property transfer in their office. At the one-stop shop, the public employee will verify the following aspects: • Identity of parties • Powers of attorney (stating that the individuals are legal representatives of the firms) • Verify the legality of the transaction (that all laws are fulfilled) • Verify the ownership and the encumbrances (with access to the “predial” database) • Verify that all taxes have been paid (with access to the Tax administration’s database) Once all the checks are completed, if there are any outstanding taxes, those can be paid at Casa pronta, though a specific agreement between the Tax Authorities and Casa pronta. A receipt is issued to show that the taxes have been paid. The deed is prepared and submitted, and the transaction is completed. Property registration is mandatory in Portugal and the one stop shop process is available since July 2008, and its use is gradually increasing. As an alternative to using the Casa pronta, it is possible to use the services of a notary or a lawyer (lawyers can do so only since 2008) to prepare and authenticate the deed and verify tax payments. The authenticated deed can be submitted to the Predial (land registry, www.predialonline.pt). Only an authenticated deed can be submitted to the Predial. Predial has 334 property registries (in each municipality) all connected to a central database. Casa pronta is an interface with the buyers and sellers that is connected to the central database managed by the “Registo Predial” (land registry). Preemption rights exist in Portugal but are not mandatory, unless the property is located in special areas (old town, cultural, or close to airport or near railways). In many commercial areas there is no need for such a waiver. In addition to «On the spot house» (that works as describe above), land registry requests can be performed online. When people prefer to perform a public deed, instead of the simplified procedure, they can apply for the registry sending the deed through a web site (http://www.predialonline.pt/PredialOnline/). In this case the applicant needs to be authenticated with a qualified digital certificate, as the one every Portuguese citizen as in his/her citizens card. The online procedure however may take up to a week to be processed. Takes place simultaneously with previous procedure. Page 25 Doing Business 2019 Portugal Details – Registering Property in Portugal – Measure of Quality Answer Score Reliability of infrastructure index (0-8) 6.0 What is the institution in charge of immovable property registration? Any Registo Predial in Portugal In what format are the majority of title or deed records kept in the largest business city—in a Computer/Fully 2.0 paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for checking for encumbrances (liens, mortgages, restrictions Yes 1.0 and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Autoridade Tributaria In what format are the majority of maps of land plots kept in the largest business city—in a Computer/Fully 2.0 paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the cadastral Separate 0.0 or mapping agency kept in a single database, in different but linked databases or in separate databases databases? Do the immovable property registration agency and cadastral or mapping agency use the No 0.0 same identification number for properties? Transparency of information index (0–6) 4.5 Who is able to obtain information on land ownership at the agency in charge of immovable Freely accessible 1.0 property registration in the largest business city? by anyone Is the list of documents that are required to complete any type of property transaction made Yes, online 0.5 publicly available–and if so, how? Link for online access: http://www.predia lonline.pt Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available–and if so, how? Link for online access: http://www.irn.mj. pt/IRN/sections/ir n/legislacao/docs - legislacao/regula mento- emolumentar/ Does the agency in charge of immovable property registration commit to delivering a legally Yes, online 0.5 binding document that proves property ownership within a specific time frame–and if so, how does it communicate the service standard? Link for online access: http://www.predia lonline.pt Is there a specific and separate mechanism for filing complaints about a problem that Yes 1.0 occurred at the agency in charge of immovable property registration? Contact information: http://www.sires.g ov.pt/inserirRESP asso1.do?tipo=r Are there publicly available official statistics tracking the number of transactions at the Yes 0.5 immovable property registration agency? Number of property transfers in the largest business city in 2017: In Portugal, 360,285 transfers occurred in 2017. Page 26 Doing Business 2019 Portugal Who is able to consult maps of land plots in the largest business city? Anyone who 0.5 pays the official fee Is the applicable fee schedule for accessing maps of land plots made publicly available— Yes, in person 0.0 and if so, how? Link for online access: Does the cadastral or mapping agency commit to delivering an updated map within a No 0.0 specific time frame—and if so, how does it communicate the service standard? Link for online access: Is there a specific and separate mechanism for filing complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 4.0 Are all privately held land plots in the economy formally registered at the immovable property No 0.0 registry? Are all privately held land plots in the largest business city formally registered at the Yes 2.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 5.5 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private guarantee? Yes 0.5 Is there a specific compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a property Yes 0.5 transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Notary; Lawyer; Does the legal system require verification of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Notary; Lawyer; Is there a national database to verify the accuracy of identity documents? Yes 1.0 For a standard land dispute between two local businesses over tenure rights of a property The Judicial worth 50 times gross national income (GNI) per capita and located in the largest business Court of Lisbon city, what court would be in charge of the case in the first instance? (Tribunal Judicial da Comarca de Lisboa - Instância Central) How long does it take on average to obtain a decision from the first-instance court for such a Between 2 and 3 1.0 case (without appeal)? years Are there any statistics on the number of land disputes in the first instance? No 0.0 Number of land disputes in the largest business city in 2017: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes Do married men and married women have equal ownership rights to property? Yes 0.0 Page 27 Doing Business 2019 Portugal Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions through 2 sets of • Rights of borrowers and lenders through indicators. The depth of credit information index measures rules and practices collateral laws (0-10) affecting the coverage, scope and accessibility of credit information available • Protection of secured creditors’ rights through through a credit registry or a credit bureau. The strength of legal rights index bankruptcy laws (0-2) measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first Depth of credit information index (0–8) determined whether a unitary secured transactions system exists. Then two case • Scope and accessibility of credit information scenarios, case A and case B, are used to determine how a nonpossessory security distributed by credit bureaus and credit registries interest is created, publicized and enforced according to the law. Special emphasis (0-8) is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a Credit bureau coverage (% of adults) secured lender, BizBank. • Number of individuals and firms listed in largest In some economies the legal framework for secured transactions will allow only case credit bureau as a percentage of adult population A or case B (not both) to apply. Both cases examine the same set of legal provisions Credit registry coverage (% of adults) relating to the use of movable collateral. • Number of individuals and firms listed in credit Several assumptions about the secured borrower (ABC) and lender (BizBank) registry as a percentage of adult population are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Page 28 Doing Business 2019 Portugal Getting Credit - Portugal Indicator Portugal OECD high Best Regulatory income Performance Strength of legal rights index (0-12) 2 6.1 12 (5 Economies) Depth of credit information index (0-8) 7 6.7 8 (42 Economies) Credit registry coverage (% of adults) 100 21.8 100.0 (4 Economies) Credit bureau coverage (% of adults) 7.9 65.3 100.0 (25 Economies) Figure – Getting Credit in Portugal and comparator economies – Ranking and Score DB 2019 Getting Credit Score 0 100 75.00: United Kingdom (Rank: 32) 70.00: Germany (Rank: 44) 64.12: Regional Average (OECD high income) 60.00: Spain (Rank: 73) 50.00: France (Rank: 99) 45.00: Portugal (Rank: 112) Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Portugal and comparator economies 8 7 7 6 6.1 6 Index Score 5 5 4 4 3 2 2 1 0 Portugal France Germany Spain United Kingdom OECD high income Page 29 Doing Business 2019 Portugal Details – Legal Rights in Portugal Strength of legal rights index (0-12) 2 Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without No requiring a specific description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a No specific description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and No replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be Yes secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by No asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed No online by any interested third party? Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency No procedure? Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? No Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization No procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow Yes the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Portugal and comparator economies 8 8 8 7 7 7 6.7 6 6 Index Score 5 4 3 2 1 0 Portugal France Germany Spain United Kingdom OECD high income Page 30 Doing Business 2019 Portugal Details – Credit Information in Portugal Depth of credit information index (0-8) Credit Credit Score bureau registry Are data on both firms and individuals distributed? Yes Yes 1 Are both positive and negative credit data distributed? Yes Yes 1 Are data from retailers or utility companies - in addition to data from banks and No No 0 financial institutions - distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries Yes No 1 that distribute more than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes Yes 1 By law, do borrowers have the right to access their data in the credit bureau or Yes Yes 1 credit registry? Can banks and financial institutions access borrowers’ credit information online Yes Yes 1 (for example, through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help Yes No 1 banks and financial institutions assess the creditworthiness of borrowers? Total Score ("yes" to either public bureau or private registry) 7 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 508,736 7,404,520 Number of firms 16,664 429,864 Total 525,400 7,834,384 Percentage of adult population 7.9 100 Page 31 Doing Business 2019 Portugal Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions • Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related- party transactions The business (Buyer): • Extent of director liability index (0–10): Ability - Is a publicly traded corporation listed on the economy’s most important stock of minority shareholders to sue and hold exchange. If there are fewer than ten listed companies or if there is no stock interested directors liable for prejudicial related- exchange in the economy, it is assumed that Buyer is a large private company with party transactions; Available legal remedies multiple shareholders. (damages, disgorgement of profits, fines, - Has a board of directors and a chief executive officer (CEO) who may legally act on imprisonment, rescission of the transaction) behalf of Buyer where permitted, even if this is not specifically required by law. • Ease of shareholder suits index (0–10): - Has a supervisory board in economies with a two-tier board system on which Mr. Access to internal corporate documents; James appointed 60% of the shareholder-elected members. Evidence obtainable during trial and allocation of - Has not adopted bylaws or articles of association that go beyond the minimum legal expenses requirements. Does not follow codes, principles, recommendations or guidelines that are not mandatory. • Extent of conflict of interest regulation index - Is a manufacturing company with its own distribution network. (0–10): Simple average of the extent of disclosure, extent of director liability and ease of The transaction involves the following details: shareholder indices - Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two • Extent of shareholder rights index (0-10): directors to Buyer’s five-member board. Shareholders’ rights and role in major corporate - Mr. James also owns 90% of Seller, a company that operates a chain of retail decisions hardware stores. Seller recently closed a large number of its stores. • Extent of ownership and control index (0-10): - Mr. James proposes that Buyer purchase Seller’s unused fleet of trucks to expand Governance safeguards protecting shareholders Buyer’s distribution of its food products, a proposal to which Buyer agrees. The price from undue board control and entrenchment is equal to 10% of Buyer’s assets and is higher than the market value. - The proposed transaction is part of the company’s principal activity and is not • Extent of corporate transparency index (0-10): outside the authority of the company. Corporate transparency on ownership stakes, - Buyer enters into the transaction. All required approvals are obtained, and all compensation, audits and financial prospects required disclosures made—that is, the transaction was not entered into fraudulently. • Extent of shareholder governance index (0– - The transaction causes damages to Buyer. Shareholders sue Mr. James and the 10): Simple average of the extent of shareholders executives and directors that approved the transaction. rights, extent of ownership and control and extent of corporate transparency indices • Strength of minority investor protection index (0–10): Simple average of the extent of conflict of interest regulation and extent of shareholder governance indices Page 32 Doing Business 2019 Portugal Protecting Minority Investors - Portugal Indicator Portugal OECD high Best Regulatory income Performance Extent of disclosure index (0-10) 6.0 6.5 10 (13 Economies) Extent of director liability index (0-10) 5.0 5.3 10 (Cambodia) Ease of shareholder suits index (0-10) 7.0 7.3 10 (Djibouti) Extent of shareholder rights index (0-10) 4.0 6.4 10 (Kazakhstan) Extent of ownership and control index (0-10) 6.0 5.4 None in 2017/18 Extent of corporate transparency index (0-10) 8.0 7.6 10 (6 Economies) Figure – Protecting Minority Investors in Portugal and comparator economies – Ranking and Score DB 2019 Protecting Minority Investors Score 0 100 75.00: United Kingdom (Rank: 15) 70.00: Spain (Rank: 30) 66.67: France (Rank: 38) 64.21: Regional Average (OECD high income) 60.00: Portugal (Rank: 64) 58.33: Germany (Rank: 72) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conflict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Portugal and comparator economies – Measure of Quality Portugal 8 5 6 6 4 7 France 10 3 8 8 5 6 Germany 7 5 5 6 7 5 Spain 9 6 7 5 9 6 United Kingdom 8 7 10 5 7 8 OECD high income 7.4 5.5 6.5 5.2 6.3 7.4 0 5 10 15 20 25 30 35 40 45 50 Sub-Indicator Score Extent of corporate transparency index (0-10) Extent of director liability index (0-10) Extent of disclosure index (0-10) Extent of ownership and control index (0-10) Extent of shareholder rights index (0-10) Ease of shareholder suits index (0-10) Page 33 Doing Business 2019 Portugal Details – Protecting Minority Investors in Portugal – Measure of Quality Answer Score Extent of conflict of interest regulation index (0-10) 6 Extent of disclosure index (0-10) 6.0 Whose decision is sufficient to approve the Buyer-Seller transaction? (0-3) Board of 2.0 directors excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his conflict of interest to the board of directors? (0-2) Existence of a 1.0 conflict without any specifics Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2) Disclosure on the 2.0 transaction and on the conflict of interest Must Buyer immediately disclose the transaction to the public? (0-2) Disclosure on the 1.0 transaction only Extent of director liability index (0-10) 5.0 Can shareholders representing 10% of Buyer's share capital sue for the damage the Yes 1.0 transaction caused to Buyer? (0-1) Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0- Liable if negligent 1.0 2) Can shareholders hold the other directors liable for the damage the transaction caused to Liable if negligent 1.0 Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay profits made from the transaction upon a successful claim by No 0.0 shareholders? (0-1) Is Mr. James disqualified upon a successful claim by shareholders? (0-1) Yes 1.0 Can a court void the transaction upon a successful claim by shareholders? (0-2) Only in case of 0.0 fraud or bad faith Ease of shareholder suits index (0-10) 7.0 Before suing, can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plaintiff request categories of documents from the defendant without identifying No 0.0 specific ones? (0-1) Can the plaintiff directly question the defendant and witnesses at trial? (0-2) Preapproved 1.0 questions only Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plaintiffs recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 6.0 Extent of shareholder rights index (0-10) 4.0 Does the sale of 51% of Buyer's assets require shareholder approval? No 0.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? No 0.0 Page 34 Doing Business 2019 Portugal Do shareholders automatically receive preemption rights every time Buyer issues new No 0.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the affected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require No 0.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all or almost all members consent to add a No 0.0 new member? Assuming that Buyer is a limited company, must a member first offer to sell their interest to No 0.0 the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 6.0 Is it forbidden to appoint the same individual as CEO and chairperson of the board of No 0.0 directors? Must the board of directors include independent and nonexecutive board members? No 0.0 Can shareholders remove members of the board of directors without cause before the end Yes 1.0 of their term? Must the board of directors include a separate audit committee exclusively comprising board No 0.0 members? Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Yes 1.0 Buyer? Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender offer to No 0.0 all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute profits within a maximum Yes 1.0 period set by law? Extent of corporate transparency index (0-10) 8.0 Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and No 0.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? Yes 1.0 Must a detailed notice of general meeting be sent 21 days before the meeting? Yes 1.0 Can shareholders representing 5% of Buyer’s share capital put items on the general meeting Yes 1.0 agenda? Must Buyer's annual financial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? Yes 1.0 Assuming that Buyer is a limited company, can members representing 5% put items on the Yes 1.0 meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual financial statements be No 0.0 audited by an external auditor? Page 35 Doing Business 2019 Portugal Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2018 covering for the Paying Taxes indicator calendar year 2017 (January 1, 2017 – December 31, 2017). See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory contributions a 2017 (number per year adjusted for electronic medium size company must pay in a year, and measures the administrative burden and joint filing and payment) of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of filing and payments, time taken to comply with tax • Total number of taxes and contributions paid or laws, time taken to comply with the requirements of postfiling processes and time withheld, including consumption taxes (value waiting. added tax, sales tax or goods and service tax) • Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: - TaxpayerCo is a medium-size business that started operations on January 1, 2016. Time required to comply with 3 major taxes It produces ceramic flowerpots and sells them at retail. All taxes and contributions (hours per year) recorded are paid in the second year of operation (calendar year 2017). Taxes and • Collecting information, computing tax payable mandatory contributions are measured at all levels of government. • Preparing separate tax accounting books, if The VAT refund process: required - In June 2017, TaxpayerCo. makes a large capital purchase: the value of the • Completing tax return, filing with agencies machine is 65 times income per capita of the economy. Sales are equally spread per month (1,050 times income per capita divided by 12) and cost of goods sold are • Arranging payment or withholding equally expensed per month (875 times income per capita divided by 12). The Total tax and contribution rate (% of commercial machinery seller is registered for VAT and excess input VAT incurred in June will be fully recovered after four consecutive months if the VAT rate is the same for inputs, profits) sales and the machine and the tax reporting period is every month. Input VAT will • Profit or corporate income tax exceed Output VAT in June 2017. • Social contributions, labor taxes paid by The corporate income tax audit process: employer - An error in calculation of income tax liability (for example, use of incorrect tax • Property and property transfer taxes depreciation rates, or incorrectly treating an expense as tax deductible) leads to an • Dividend, capital gains, financial transactions incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. taxes discovered the error and voluntarily notified the tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax liability • Waste collection, vehicle, road and other taxes due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period. Postfiling Index • Time to comply with a VAT refund (hours) • Time to obtain a VAT refund (weeks) • Time to comply with a corporate income tax correction (hours) • Time to complete a corporate income tax correction (weeks) Page 36 Doing Business 2019 Portugal Paying Taxes - Portugal Indicator Portugal OECD high Best Regulatory income Performance Payments (number per year) 8 11.2 3 (Hong Kong SAR, China) Time (hours per year) 243 159.4 49 (Singapore) Total tax and contribution rate (% of profit) 39.8 39.8 26.1% (32 Economies) Postfiling index (0-100) 92.71 84.41 None in 2017/18 Figure – Paying Taxes in Portugal and comparator economies – Ranking and Score DB 2019 Paying Taxes Score 0 100 87.14: United Kingdom (Rank: 23) 84.58: Spain (Rank: 34) 83.75: Portugal (Rank: 39) 83.32: Regional Average (OECD high income) 82.11: Germany (Rank: 43) 79.31: France (Rank: 55) Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax and contribution rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Portugal and comparator economies – Measure of Quality 97.67 100 92.71 92.40 93.60 84.41 80 71.00 Index score 60 40 20 0 Portugal France Germany Spain United Kingdom OECD high income Page 37 Doing Business 2019 Portugal Details – Paying Taxes in Portugal Tax or Payments Notes on Time Statutory Tax base Total tax Notes on mandatory (number) Payments (hours) tax rate and TTCR contribution contribution rate (% of profit) Social 1.0 online 90.0 23.75% gross salaries 26.79 security contributions Corporate 1.0 online 63.0 17% for first taxable profit 11.58 income tax EUR15,000 and 21% thereafter Municipal 0.0 jointly 1.5% taxable 0.88 business tax income Interest tax 1.0 online 25% interest 0.64 included in (withholding income other taxes tax) Property tax 1.0 0.8% property 0.44 value Vehicle tax 1.0 fixed fee 0.07 depending on type of vehicle Withheld 0.0 11% gross salaries 0.00 withheld contributions Fuel tax 1.0 28 cents fuel 0.00 consumption in liters Value added 1.0 online 90.0 23% value added 0.00 not included tax (VAT) Tax on check 1.0 online EUR 0.05 per check 0.00 transactions Totals 8 243 39.8 Page 38 Doing Business 2019 Portugal Details – Paying Taxes in Portugal – Tax by Type Taxes by type Answer Profit tax (% of profit) 12.5 Labor tax and contributions (% of profit) 26.8 Other taxes (% of profit) 0.5 Page 39 Doing Business 2019 Portugal Details – Paying Taxes in Portugal – Measure of Quality Answer Score Postfiling index (0-100) 92.71 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process None Percentage of cases exposed to a VAT audit (%) 0% - 24% Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) 4.0 92 Time to obtain a VAT refund (weeks) 14.2 78.83 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Time to comply with a corporate income tax correction (hours) 1.0 100 Time to complete a corporate income tax correction (weeks) No tax audit per 100 case study scenario Notes: Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction. N/A = Not applicable. Page 40 Doing Business 2019 Portugal Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: • Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 days are or border handling in origin economy recorded as 22×24=528 hours). If customs clearance takes 7.5 hours, the data are • Obtaining, preparing and submitting documents recorded as is. Alternatively, suppose documents are submitted to a customs agency required by destination economy and any transit at 8:00a.m., are processed overnight and can be picked up at 8:00a.m. the next day. economies The time for customs clearance would be recorded as 24 hours because the actual procedure took 24 hours. • Covers all documents required by law and in practice, including electronic submissions of Cost: Insurance cost and informal payments for which no receipt is issued are information excluded from the costs recorded. Costs are reported in U.S. dollars. Contributors Border compliance are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. Contributors are private sector • Customs clearance and inspections experts in international trade logistics and are informed about exchange rates. • Inspections by other agencies (if applied to more than 20% of shipments) Assumptions of the case study: - For all 190 economies covered by Doing Business, it is assumed a shipment is in a • Handling and inspections that take place at the warehouse in the largest business city of the exporting economy and travels to a economy’s port or border warehouse in the largest business city of the importing economy. - It is assumed each economy imports 15 metric tons of containerized auto parts (HS Domestic transport 8708) from its natural import partner—the economy from which it imports the largest • Loading or unloading of the shipment at the value (price times quantity) of auto parts. It is assumed each economy exports the warehouse or port/border product of its comparative advantage (defined by the largest export value) to its • Transport between warehouse and port/border natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. • Traffic delays and road police checks while - The mode of transport is the one most widely used for the chosen export or import shipment is en route product and the trading partner, as is the seaport or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 41 Doing Business 2019 Portugal Trading across Borders - Portugal Indicator Portugal OECD high Best Regulatory income Performance Time to export: Border compliance (hours) 0 12.5 1 (19 Economies) Cost to export: Border compliance (USD) 0 139.1 0 (19 Economies) Time to export: Documentary compliance (hours) 1 2.4 1 (26 Economies) Cost to export: Documentary compliance (USD) 0 35.2 0 (20 Economies) Time to import: Border compliance (hours) 0 8.5 0 (25 Economies) Cost to import: Border compliance (USD) 0 100.2 0 (28 Economies) Time to import: Documentary compliance (hours) 1 3.4 1 (30 Economies) Cost to import: Documentary compliance (USD) 0 24.9 0 (30 Economies) Figure – Trading across Borders in Portugal and comparator economies – Ranking and Score DB 2019 Trading Across Borders Score 0 100 94.21: Regional Average (OECD high income) 93.76: United Kingdom (Rank: 30) 91.77: Germany (Rank: 40) 100.00: Spain (Rank: 1) 100.00: France (Rank: 1) 100.00: Portugal (Rank: 1) Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import. Figure – Trading across Borders in Portugal – Time and Cost Time (hours) Cost (USD) 1.2 1.2 1 1 1 1 Time (hours) Cost (USD) 0.8 0.8 0.6 0.6 0.4 0.4 0.2 0.2 0 0 0 0 0 0 0 0 Export Export Import Import - - - - Border Documentary Border Documentary Compliance Compliance Compliance Compliance Page 42 Doing Business 2019 Portugal Details – Trading across Borders in Portugal Characteristics Export Import Product HS 87 : Vehicles other than railway or HS 8708: Parts and accessories of motor tramway rolling-stock, and parts and vehicles accessories thereof Trade partner Germany Germany Border Portugal-Spain border crossing Portugal-Spain border crossing Distance (km) 350 350 Domestic transport time (hours) 6 6 Domestic transport cost (USD) 598 598 Details – Trading across Borders in Portugal – Components of Border Compliance Time to Complete (hours) Associated Costs (USD) Export: Clearance and inspections required 0.0 0.0 by customs authorities Export: Clearance and inspections required 0.0 0.0 by agencies other than customs Export: Port or border handling 0.0 0.0 Import: Clearance and inspections required 0.0 0.0 by customs authorities Import: Clearance and inspections required 0.0 0.0 by agencies other than customs Import: Port or border handling 0.0 0.0 Page 43 Doing Business 2019 Portugal Details – Trading across Borders in Portugal – Trade Documents Export Import Packing list Packing list Commercial invoice Commercial Invoice CMR waybill CMR waybill Intrastat Intrastat Page 44 Doing Business 2019 Portugal Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract between 2 courts (calendar days) domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt • Time to file and serve the case enforcement. • Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses several • Time to enforce the judgment assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller and courts (% of claim) Buyer), both located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. • Attorney fees - The buyer orders custom-made goods, then fails to pay alleging that the goods are • Court fees not of adequate quality. - The value of the dispute is 200% of the income per capita or the equivalent in local • Enforcement fees currency of USD 5,000, whichever is greater. - The seller sues the buyer before the court with jurisdiction over commercial cases Quality of judicial processes index (0-18) worth 200% of income per capita or $5,000. • Court structure and proceedings (-1-5) - The seller requests the pretrial attachment of the defendant’s movable assets to secure the claim. • Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. • Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. • Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Page 45 Doing Business 2019 Portugal Enforcing Contracts - Portugal Standardized Case Claim value EUR 35,088 Court name Juízo Local Cível de Lisboa City Covered Lisbon Indicator Portugal OECD high Best Regulatory income Performance Time (days) 755 582.4 None in 2017/18 Cost (% of claim value) 17.2 21.2 None in 2017/18 Quality of judicial processes index (0-18) 13.5 11.5 None in 2017/18 Figure – Enforcing Contracts in Portugal and comparator economies – Ranking and Score DB 2019 Enforcing Contracts Score 0 100 74.89: France (Rank: 12) 70.90: Spain (Rank: 23) 70.39: Germany (Rank: 26) 68.69: United Kingdom (Rank: 32) 67.91: Portugal (Rank: 35) 67.65: Regional Average (OECD high income) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators. Figure – Enforcing Contracts in Portugal – Time and Cost Time (days) Cost (% of claim value) 800 755 45.7 50 Cost (% of claim value) 700 582.4 40 600 Time (days) 499 510 500 437 30 395 400 21.2 300 17.4 17.2 17.2 20 14.4 200 10 100 0 0 France Germany OECD Portugal Spain United high Kingdom income Page 46 Doing Business 2019 Portugal Figure – Enforcing Contracts in Portugal and comparator economies – Measure of Quality Portugal 2.5 5 2.5 3.5 France 2.5 3 2 4.5 Germany 3 1.5 1.5 4.5 Spain 3 2.5 2.5 3.5 United Kingdom 2 5 3.5 4.5 OECD high income 2.5 3.1 2.3 3.6 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5) Details – Enforcing Contracts in Portugal Indicator Time (days) 755 Filing and service 30 Trial and judgment 545 Enforcement of judgment 180 Cost (% of claim value) 17.2 Attorney fees 10.7 Court fees 6 Enforcement fees 0.5 Quality of judicial processes index (0-18) 13.5 Court structure and proceedings (-1-5) 3.5 Case management (0-6) 5.0 Court automation (0-4) 2.5 Alternative dispute resolution (0-3) 2.5 Page 47 Doing Business 2019 Portugal Details – Enforcing Contracts in Portugal – Measure of Quality Answer Score Quality of judicial processes index (0-18) 13.5 Court structure and proceedings (-1-5) 3.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? No 0.0 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, automatic 1.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 5.0 1. Time standards 1.0 1.a. Are there laws setting overall time standards for key court events in a civil Yes case? 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) time to Yes 1.0 disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the Yes 1.0 competent court? 5. Are there any electronic case management tools in place within the competent court for Yes 1.0 use by judges? 6. Are there any electronic case management tools in place within the competent court for Yes 1.0 use by lawyers? Court automation (0-4) 2.5 1. Can the initial complaint be filed electronically through a dedicated platform within the yes 1.0 competent court? 2. Is it possible to carry out service of process electronically for claims filed before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? Yes 1.0 4. Publication of judgments 0.5 4.a Are judgments rendered in commercial cases at all levels made available to the No general public through publication in official gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in official gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.5 1. Arbitration 1.5 Page 48 Doing Business 2019 Portugal 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.0 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there financial incentives for parties to attempt mediation or conciliation No (i.e., if mediation or conciliation is successful, a refund of court filing fees, income tax credits or the like)? Page 49 Doing Business 2019 Portugal Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are used: • Measured in calendar years • Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties. Cost required to recover debt (% of debtor’s - The value of the hotel is 100% of the income per capita or the equivalent in local estate) currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s • Measured as percentage of estate value real estate. The hotel cannot pay back the loan, but makes enough money to • Court fees operate otherwise. • Fees of insolvency administrators In addition, Doing Business evaluates the quality of legal framework applicable to • Lawyers’ fees judicial liquidation and reorganization proceedings and the extent to which best • Assessors’ and auctioneers’ fees insolvency practices have been implemented in each economy covered. • Other related fees Outcome • Whether business continues operating as a going concern or business assets are sold piecemeal Recovery rate for creditors • Measures the cents on the dollar recovered by secured creditors • Outcome for the business (survival or not) determines the maximum value that can be recovered • Official costs of the insolvency proceedings are deducted • Depreciation of furniture is taken into account • Present value of debt recovered Strength of insolvency framework index (0- 16) • Sum of the scores of four component indices: • Commencement of proceedings index (0-3) • Management of debtor’s assets index (0-6) • Reorganization proceedings index (0-3) • Creditor participation index (0-4) Page 50 Doing Business 2019 Portugal Resolving Insolvency - Portugal Indicator Portugal OECD high Best Regulatory income Performance Recovery rate (cents on the dollar) 64.5 70.5 None in 2017/18 Time (years) 3.0 1.7 0.4 (Ireland) Cost (% of estate) 9.0 9.3 1.0 (Norway) Outcome (0 as piecemeal sale and 1 as going concern) 1 .. .. Strength of insolvency framework index (0-16) 14.5 11.9 None in 2017/18 Figure – Resolving Insolvency in Portugal and comparator economies – Ranking and Score DB 2019 Resolving Insolvency Score 0 100 90.12: Germany (Rank: 4) 80.27: United Kingdom (Rank: 14) 80.01: Portugal (Rank: 16) 79.10: Spain (Rank: 19) 75.21: Regional Average (OECD high income) 74.08: France (Rank: 28) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Portugal – Time and Cost Time (years) Cost (% of estate) 3.5 11.0 12 3.0 3 9.3 10 Cost (% of estate) 9.0 9.0 8.0 Time (years) 2.5 8 2 1.9 1.7 6.0 1.5 6 1.5 1.2 1.0 4 1 0.5 2 0 0 France Germany OECD Portugal Spain United high Kingdom income Page 51 Doing Business 2019 Portugal Figure – Resolving Insolvency in Portugal and comparator economies – Measure of Quality Portugal 5.5 3 3 3 France 6 3 1 1 Germany 6 3 3 3 Spain 6 3 1 2 United Kingdom 5 3 2 1 OECD high income 5.3 2.8 2.2 1.9 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3) Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Figure – Resolving Insolvency in Portugal and comparator economies – Recovery Rate Recovery rate(cents on the dollar) 100 85.3 80.4 77.3 80 73.8 70.5 64.5 60 40 20 0 Portugal France Germany Spain United Kingdom OECD high income Page 52 Doing Business 2019 Portugal Details – Resolving Insolvency in Portugal Indicator Answer Score Proceeding liquidation (after As there is an interest maintaining Mirage in operation, it may opt to initiate a "Processo Especial an attempt at de Revitalização" (Special Recovery Proceeding) foreseen under articles 17.º-A to 17.º-I of the reorganization) Insolvency Code. This will suspend all enforcement actions and force BizBank into negotiations. During the negotiation period, no decision on insolvency will be made. Under the case assumptions, BizBank is not willing to restructure the loan. Therefore, it is expected that it will not cooperate in the elaboration and approval of a reorganization plan. After the reorganization plan is rejected by BizBank, which accounts for the majority of votes due to the amount of the credit, the insolvency representative will likely ask the court to declare Mirage insolvent and commence liquidation proceedings. Outcome going concern It is possible to keep the hotel operating during insolvency proceedings by using the cash flow, which is sufficient to cover operating expenses. BizBank will be interested in selling the hotel as a going concern, because this will maximize the sale value. Time (in years) 3.0 Taking into consideration the court in which the proceedings have to be claimed and with the presumption that the proceedings will take their natural due course and will not be subject to claim disputes, the special recovery proceedings and insolvency proceedings, together, will take about 3 years from filing to closing. Cost (% of 9.0 Major expenses include remuneration of the administrator, attorneys' fees and fees of other estate) professionals involved in the insolvency proceedings, such as accountants and assessors. Recovery rate 64.5 (cents on the dollar) Page 53 Doing Business 2019 Portugal Details – Resolving Insolvency in Portugal – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 14.5 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency proceedings? (a) Debtor may 1.0 file for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (a) Yes, a creditor 1.0 may file for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (c) Both (a) and 1.0 insolvency framework? (b) options are available, but only one of them needs to be complied with Management of debtor's assets index (0-6) 5.5 Does the insolvency framework allow the continuation of contracts supplying essential goods Yes 1.0 and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit after Yes 1.0 commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (a) Yes over all 0.5 pre- commencement creditors, secured or unsecured Reorganization proceedings index (0-3) 3.0 Which creditors vote on the proposed reorganization plan? (b) Only creditors 1.0 whose rights are affected by the proposed plan Does the insolvency framework require that dissenting creditors in reorganization receive at Yes 1.0 least as much as what they would obtain in a liquidation? Are the creditors divided into classes for the purposes of voting on the reorganization plan, Yes 1.0 does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 3.0 Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial Yes 1.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request information No 0.0 from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to decisions Yes 1.0 accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Page 54 Doing Business 2019 Portugal Labor Market Regulation Doing Business presents detailed data for the labor market regulation indicators on the Doing Business website (http://www.doingbusiness.org). The report does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business. The most recent round of data collection was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions about the (i) whether fixed-term contracts are prohibited for worker and the business are used. permanent tasks; (ii) maximum cumulative duration of fixed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether - Operates a supermarket or grocery store in the economy’s largest business city. nonpregnant and nonnursing women can work For 11 economies the data are also collected for the second largest business city. same night hours as men; (v) length of paid annual - Has 60 employees. leave. - Is subject to collective bargaining agreements if such agreements cover more than 50% of the food retail sector and they apply even to firms that are not party to them. Redundancy rules - Abides by every law and regulation but does not grant workers more benefits than (i) whether redundancy can be basis for terminating those mandated by law, regulation or (if applicable) collective bargaining workers; (ii) whether employer needs to notify agreements. and/or get approval from third party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of five fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Page 55 Doing Business 2019 Portugal Labor Market Regulation - Portugal Details – Labor Market Regulation in Portugal Answer Hiring Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single fixed-term contract (months) 36.0 Maximum length of fixed-term contracts, including renewals (months) 36.0 Minimum wage applicable to the worker assumed in the case study (US$/month) 731.0 Ratio of minimum wage to value added per worker 0.3 Maximum length of probationary period (months) 3.0 Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 25.0 Premium for work on weekly rest day (% of hourly pay) 50.0 Premium for overtime work (% of hourly pay) 31.3 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? Yes Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 22.0 Paid annual leave for a worker with 5 years of tenure (working days) 22.0 Paid annual leave for a worker with 10 years of tenure (working days) 22.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 22.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party notification if one worker is dismissed? Yes Third-party approval if one worker is dismissed? No Third-party notification if nine workers are dismissed? Yes Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? Yes Priority rules for redundancies? No Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 4.3 Notice period for redundancy dismissal for a worker with 5 years of tenure 8.6 Notice period for redundancy dismissal for a worker with 10 years of tenure 10.7 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 7.9 Severance pay for redundancy dismissal for a worker with 1 year of tenure 1.7 Page 56 Doing Business 2019 Portugal Severance pay for redundancy dismissal for a worker with 5 years of tenure 8.6 Severance pay for redundancy dismissal for a worker with 10 years of tenure 17.1 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 9.1 Job quality Equal remuneration for work of equal value? Yes Gender nondiscrimination in hiring? Yes Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 120.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? No Unemployment protection after one year of employment? Yes Minimum contribution period for unemployment protection (months)? 12.0 Page 57 Doing Business 2019 Portugal Business Reforms in Portugal In the past year, Doing Business observed a peaking of reform activity worldwide. From June 2, 2017, to May 1, 2018, 128 economies implemented a record 314 regulatory reforms improving the business climate. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more difficult to do business. DB2019 Registering Property: Portugal made registering property more burdensome by reducing the number of officials that can register property transfers. DB2017 Getting Electricity: Portugal made getting an electricity connection faster by reducing the time required to approve electrical connection requests. Paying Taxes: Portugal made paying taxes easier and less costly by using better accounting software and enhancing the online filing system of taxes and decreasing the corporate income tax rate. Labor Market Regulation: Portugal reduced the maximum duration of fixed-term contracts. DB2016 Paying Taxes: Portugal made paying taxes less costly for companies by reducing the corporate income tax rate and increasing the allowable amount of the loss carried forward. At the same time, Portugal slightly increased the vehicle tax. Labor Market Regulation: Portugal introduced priority rules for redundancy dismissals and new regulations for collective bargaining agreements. DB2015 Paying Taxes: Portugal made paying taxes less costly for companies by reducing the corporate income tax rate and introducing a reduced corporate tax rate for a portion of the taxable profits of qualifying small and medium-size enterprises. Enforcing Contracts: Portugal made enforcing contracts easier by adopting a new code of civil procedure designed to reduce case backlogs, streamline court procedures, enhance the role of judges and speed up the resolution of standard civil and commercial disputes. Labor Market Regulation: Portugal reduced the amount of severance pay per year of service and increased the maximum cumulative duration of fixed-term contracts. DB2014 Starting a Business: Portugal made starting a business easier by eliminating the requirement to report to the Ministry of Labor. Labor Market Regulation: Portugal reduced the wage premium for weekly holiday work and abolished priority rules for redundancy dismissals. DB2013 Dealing with Construction Permits: Portugal made obtaining construction permits easier by implementing strict time limits to process urban projects and simplifying the associated procedures. Trading across Borders: Portugal made trading across borders easier by implementing an electronic single window for port procedures. Resolving Insolvency: Portugal made resolving insolvency easier by introducing a new insolvency law that expedites liquidation procedures and creates fast-track mechanisms both in and out of court. Labor Market Regulation: Portugal increased the maximum duration of fixed-term contracts and reduced the severance pay applicable in cases of redundancy dismissals. DB2012 Starting a Business: Portugal made starting a business easier by allowing company founders to choose the amount of minimum capital and make their paid-in capital contribution up to 1 year after the company’s creation, and by eliminating the stamp tax on company’s share capital subscriptions. Dealing with Construction Permits: Portugal made dealing with construction permits easier by streamlining its inspection system. Page 58 Doing Business 2019 Portugal DB2011 Dealing with Construction Permits: Portugal made it easier dealing with construction permits by implementing the 95 day time limit for the approval of project designs. Registering Property: Portugal established a one-stop shop for property registration. Paying Taxes: Portugal introduced a new social security code and lowered corporate tax rates. Labor Market Regulation: Portugal approved a new Labor Code. DB2010 Dealing with Construction Permits: Portugal made dealing with construction permits easier by introducing an improved fire safety appraisal system for new construction projects and faster registration of new buildings. Registering Property: Portugal speeded up property registration through computerization at the registry backed by an amendment to the registry code making the use of notaries optional. Trading across Borders: Portugal reduced the time required for customs clearance through staff training and improvements in customs procedures. Enforcing Contracts: Portugal reduced the time and improved the procedures for contract enforcement by allowing electronic filing for the initiation of a suit and by reducing the need for intervention by the judge in the enforcement of a judgment. Labor Market Regulation: Portugal increased both the notice period for redundancy dismissals and the maximum cumulative duration of fixed-term contracts. DB2009 Dealing with Construction Permits: Portugal made dealing with construction permits easier by allowing online applications for building permits, assigning officers to each application and simplifying approvals—though it also introduced stricter control of labor regulations, adding a new procedure for inspection during construction. Enforcing Contracts: Portugal reduced procedural complexity in enforcing contracts through the courts by raising the monetary threshold for cases going through summary proceedings. Resolving Insolvency: Portugal made resolving insolvency easier by eliminating the formality of publishing insolvency notices in newspapers, introducing a fast-track procedure for debtors with less than €5,000 in assets, implementing new procedures to accelerate payments to insolvency administrators and limiting appeals. DB2008 Starting a Business: Portugal made starting a business easier by eliminating outdated formalities, simplifying requirements for company registration and implementing an online incorporation system for use by lawyers. Registering Property: Portugal reduced the time required to register property through continued computerization of real estate registries in Lisbon. Protecting Minority Investors: Portugal strengthened investor protections by clarifying directors’ duties, introducing a statutory provision on the business judgment rule and lowering the minimum shareholding threshold relating to the right of action against directors on behalf of listed companies. Paying Taxes: Portugal made paying taxes less costly for companies by reducing the corporate income tax rate. Enforcing Contracts: Portugal made enforcing contracts easier by simplifying the rules for small claims and improving the case management system. Resolving Insolvency: Portugal made resolving insolvency easier through legislation creating fast-track procedures for the voluntary liquidation of commercial enterprises. Page 59 Doing Business 2019 Portugal Page 60