Newsletter August 2020

Legal Updates

Extraordinary Incentive for the Normalisation of Business Activity - How to Obtain it?

Ordinance No. 170 – A /2020 was published in July, which regulates the procedures and access conditions to the extraordinary incentive for normalisation of the business activity.

This incentive, to be granted by the IEFP, is aimed at companies, that having benefited from the extraordinary support for the maintenance of an employment contract or of the extraordinary training plan, under the terms of Decree-Law No. 10-G/2020, of March 26th, have the conditions to return to their normal activity, consists of the following:

a) Support in the amount of a minimum guaranteed monthly pay (“RMMG”) per employee covered, paid in one single instalment, within 10 working days from the date of communication of acceptance of the application;

b) Support in the amount of two RMMG, paid in two instalments, of equal value, the first within the period mentioned in the previous subparagraph and, the second, within 180 days from the effective implementation of the measures.

The application shall be submitted electronically, on the IEFP website, upon the presentation of the required documentation which attests the compliance with the material requirements for granting the incentive.


Insolvency caused by COVID-19? Get to know the new Extraordinary Process for Companies’ Viability.

It has been approved the Council of Ministers Resolution no. 41/2020, which proposes the adoption of a wide range of exceptional measures, known as the “Economic and Social Stabilisation Programme”, among which is included the new extraordinary process for company viability (“PEVE”), focused on the support to companies, on an exceptional and temporary basis.

PEVE can be used by any company which, not having pendent a special revitalisation procedure, is in a difficult economic situation or in an imminent or current insolvency situation as a result of the economic crisis caused by the covid-19 disease pandemic, providing that the company is still likely to become viable.

The purpose of this process is the celebration of an extrajudicially agreement between the company and its creditors and approved by a judge. This process has an urgent nature, and therefore priority over the proceedings and trials of cases with a similar nature.


Business Updates

5G Auction in Portugal

Following the Covid-19 epidemic outbreak, the world and the economy faced a multiplicity of changes and delays regarding the expectations for the current year.

Nevertheless, it was announced that ANACOM has already set a new date for the launch of 5G in Portugal (the regulator intends to approve the frequency auction regulation in September, start it in October and end it in December of the current year).

Therefore, the allocation of rights of use of frequencies should take place between January and February of the next year.

The public consultation of the regulation concerning this auction counted with more than 500 contributions, including the participation of government bodies, of the two Regional Governments, regulators, public institutions, local authorities, providers of electronic communications services, manufacturers, as well as the general public.

The scope of this frequency auction is to allocate to operators, as well as to other interested parties, the necessary spectrum for the provision of the fifth generation of electronic communication services.

As a result of what has been stated here, the estimate is that the auction will trigger profits of EUR 238 million for the State.


New Community supports for Portuguese companies

In response to the extraordinary situation caused by COVID-19, the European Commission is investing in a new instrument of support to viable companies, which, in principle, will be available in 2020.

Specifically, a solvency support instrument should be agreed for viable companies, which have been affected by the current pandemic crisis, with the aim of supporting their equity. This financial support will be of EUR 31 billion and it will be available to all Member States, especially to those that have been the most affected by the pandemic and that have a lower capacity to intervene in the most disadvantaged sectors, through national state aids.

In addition, the initiative of reinforce cohesion – REACT-EU, in the amount of EUR 55 billion, should also be available this year. The REACT-EU will allow additional funding to the most important economy sectors, through investments to support the maintenance of jobs, job creation measures for young people and the financing of working capital and investment support for small and medium-sized enterprises (“PMEs”).

With these supports, a few more steps are taken towards economic recovery, fundamental for the rebuilding of the Portuguese economy.