New European Directive on the Harmonisation of Insolvency Law

The recent Directive (EU) 2026/799 of the European Parliament and of the Council of the European Union of 30 March 2026, published on 1 April 2026, establishes a framework for the harmonisation of certain substantive aspects of insolvency law.
Member States will be required to transpose this Directive into their domestic legal systems by 22 January 2029, which will entail a revision of our Insolvency and Corporate Recovery Code (CIRE).

Background

This Directive seeks to promote the proper functioning of the internal market and the Capital Markets Union, as well as to eliminate obstacles to the exercise of fundamental freedoms, namely the free movement of capital and freedom of establishment.
The Directive has the clear objective of contributing to the reduction of legislative divergences in insolvency matters among Member States, thereby strengthening legal certainty and making the outcomes of insolvency proceedings more predictable for international investors, rendering cross-border investments within the European Union more attractive.It is intended to improve the efficiency of capital markets, particularly in order to facilitate greater access to financing for companies. Consequently, it is imperative to establish minimum requirements in specific aspects of insolvency proceedings so that they may have a significant impact on both the duration and the efficient outcome of such proceedings.

Aspects to be Harmonised

The new instrument harmonises six central topics with a view to safeguarding creditors’ interests:
(i) Avoidance actions (Articles 6 et seq.);
(ii) The tracing of assets belonging to the insolvency estate (Articles 14 et seq.);
(iii) Pre-pack proceedings (Articles 21 et seq.);
(iv) The obligation of directors to file for the opening of insolvency proceedings (Articles 40 et seq.);
(v) Creditors’ committees (Articles 44 et seq.); and finally,
(vi) The preparation of a factsheet containing key information on national insolvency law (Articles 51 et seq.).

Impact on Domestic Law

Our legal system already contains solutions in some of the matters harmonised by the Directive; nevertheless, in other areas more extensive transposition will be required, thereby enabling an improvement of the CIRE.

With regard to the avoidance of acts detrimental to the insolvency estate, the expected impact on Portuguese legislation is not significant. Nevertheless, the Directive introduces minimum rules concerning the declaration of nullity, voidability or ineffectiveness of acts detrimental to creditors, establishing suspect periods and presumptions, namely in relation to transactions involving related parties.

As regards pre-pack proceedings, the Directive creates a framework for such procedures which does not (yet) exist in our domestic legal system.
This mechanism allows companies facing financial difficulties to organise the sale of the business prior to insolvency, thereby preserving its value and existing jobs.

Concerning the duty to file for insolvency, Article 18 of the CIRE already establishes such obligation, requiring the debtor to apply for a declaration of insolvency within 30 days of becoming aware of the insolvency situation (a shorter period than that indicated by the Directive). Even so, the Directive innovates by strengthening directors’ duties of care during the pre-insolvency stage, reducing the margin of discretion regarding the filing for insolvency.

With respect to creditors’ committees, these are also already provided for under our system. However, the Directive imposes their existence under certain circumstances, thereby reinforcing their role in the supervision, monitoring and access to information within insolvency proceedings.

Finally, regarding asset tracing, the Directive seeks to include access to bank account registers and beneficial ownership registers, in order to reduce information asymmetries and promote greater institutional cooperation and coordination, especially in cross-border contexts.

Conclusions

The CIRE regime is already, to a large extent, aligned with several principles enshrined in the new Directive. Nevertheless, for the Portuguese legal system, the main innovations are likely to consist of the introduction of pre-pack mechanisms, the effective strengthening of directors’ duties during the pre-insolvency phase, the enhancement of the role of creditors’ committees, and the expansion of instruments for asset identification and recovery.

In this context, the Directive emerges as a relevant opportunity to update and render the domestic insolvency framework more efficient, contributing to increased confidence among economic operators and to improved conditions for access to corporate financing.

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