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Newsletter February 2019

Legal Updates

Medicinal cannabis already has a legal framework in portugal

On January 15th 2019 a decree law which regulates the use of cannabis-based medicines, mixtures and substances in Portugal was published.

The publication of this diploma was foreseen since the entry in force, on August 2018, of the Law 33/2018 that legally framed the plant for medical purposes in Portugal.

The Decree Law n. 8/2019 details the procedures and competences of the authorisation processes for the activities associated with medicinal cannabis. It also foresees aspects related with advertisement, prescription, dismissal and monitoring of adverse reactions.

Unsurprisingly the prescription of cannabis-based medicines, mixtures and substances goes through a special medical prescription and it is allowed only in the cases where the conventional treatments do not produce the expected effects or provoke relevant adverse effects. The dismissal is reserved to pharmacies.

The diploma will enter into force on February 1st 2019.

The changes to the legal framework emerge in a moment when Portugal has shown great interest in foreign investors, namely, for the production and export of cannabis from Portugal.

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New tax incentives to renting

On the past January 9th 2019, Law number 3/2019, which modified the Personal Income (IRS) Tax Code, was published, creating the conditions to access to tax incentives in programmes of housing construction for affordable rent.

The Government will define the maximum rents to be charged and the remaining requisites of the construction programmes, regardless of the real cost of the construction. These shall be considered as housing with controlled costs for the purpose of the applicable VAT tax.

These programmes shall guarantee the allocation of the real estate to that purpose for the minimum period of 25 years.

Regarding the real estate earnings resulting from renting contracts, a percentage reduction of the respective autonomous rate (currently of 28%) will be applied in accordance with the duration of the contract. Between 2 and 5 years, the reduction will be of 2%; between 5 and 10 years, the reduction will be of 5%; between 10 and 20 years, the reduction will be of 14% and when superior to 20 years of 18%.

Lastly, the new law excludes the Personal Income (IRS) taxation of the compensations legally owned for the termination of open-ended contracts, regarding real estate figuring as the permanent residence of the taxable subject.

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Business Updates

EU predicts large growth for azores and madeira

The EU predicts a financing of more than 2,000 million euros for Azores and Madeira, until 2020, within an economic investment strategy in the ultra-peripheral regions. This measure is meant to revitalize the Autonomous Regions, promoting the business investment and the creation of jobs.

According to data from Brussels, there are 1,45 million euros reserved for Azores, while 595 million euros are budgeted for Madeira in view of the objective of doubling the public investment in GDP percentage.

To these values shall be added the financings within the cooperation protocol between Azores, Madeira and the Canary Islands (127 million euros), the European Maritime and Fisheries Fund (102 million euros), Agriculture Funds (106 million euros), European Social Fund (14,6 million euros), European Regional Development Fund (4,4 million euros) and the European Fund for Strategic Investments (2,2 million euros of investment mobilized for the ultra-peripheral regions).

The disclosure of this information occurred in the Ultra-Peripheral Regions Annual Convention and they substantiate a great opportunity for investment in a territory in full development

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Security measure for the “May Storm”

Considering the possible impact of Brexit in Lusitanian lands, the Government took the initiative of providing a funding of 50 million euros to support the two thousand national companies, which export more than 15% to the United Kingdom.

The creation of this line of support was approved by the Council of Ministers on the 17th of the current month, within the contingency plan elaborated by the Government due to the arrival of the “Brexit hurricane” and with the intent of settling the repercussions of the “May storm” in the companies with exports depending substantially on the United Kingdom.

Within this framework, the Secretary of State for the Internationalization of the Economy elucidated that the measure targets essentially small and medium enterprises that export goods and services, encompassing the tourism sector – where the majority are British – and it may even finance the treasury of the companies, their promotion in other markets and the adaption of their products and services.

This is another effort to sustain the national companies, which are also going to enjoy the support of the Competitive and Innovation Agency (IAPMEI), incentives to the analysis of the impact of the Brexit and training sessions on this theme.

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