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Newsletter July 2019

Legal Updates

Accessible lease program

An Affordable Rental Program was published in Diário da República on the 22nd of May and will take effect on the 1st of July.

The purpose of the program is to boost the rental market by seeking to introduce into the market more affordable leases compared to the current ones.

Any person, family or group of students or trainees enrolled in vocational training courses, even if they do not earn any income (the payment of their part of the rent must be guaranteed by a person who qualifies for the program), can access the “Affordable Rental”.

Rents must be at least 20% lower than the reference value of the rental price applicable to each accommodation, and lessees should not have to endure an effort rate of more than 35%.

This program grants tax benefits over the IRS or IRC of the landlords (exemption from taxation on the property income derived from the contracts included in this scope). It is also required the obligation to underwrite insurance (with more favorable conditions). In short, this is a fiscally atractive measure.

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The decrease of plastic products in the environment

The Official Journal of the European Union published on the 5th of June 2019 Directive 2019/904 of the European Parliament and of the Council laying down measures to reduce the impact of plastic on the environment with a special focus on the aquatic environment and human health.

This Directive applies not only to the ten single use plastic products which are accounted for on European beaches (such as straws, swabs and cutlery and plastic cups) but also to fishing gear containing plastic, in a total of 70 % of marine litter counted.

With clear targets for preventing the dangers of plastic, the Directive also promotes a paradigm shift in theeconomy, with a view to the presence of sustainable products in the markets of the various Member States.

In this sense, Member States will have to monitor possible infringements of national legislation adopted following this Directive, imposing sanctions and encouraging consumers to carry out a more responsible behavior.

The Directive will enter into force on the 25th of June 2019, and it will be transposed into national legislation by the 3rd of July, 2021.

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Business Updates

Facebook will launch a new crypto-currency

Facebook has announced plans to create a crypto-currency, the “Libra,” and an e-wallet to save it, “Calibra”. These should be ready by the year 2020 and their goal is to process payments and transfers online from applications such as Messenger and WhatsApp, without relying on traditional banks.

The «Libra» will be run by an association of 28 companies and nongovernmental organizations, which also includes payment companies such as PayPal and Mastercard, with Facebook managing its digital porftolio
«Calibra», running in its own application and in various applications held by Facebook (Messenger,WhatsApp).

The plan is to create a way for those who do not have instant access to a bank account, simply and with low or no cost, to make transfers and payments only through their smartphone, via this digital currency.

This new crypto-currency, according to experts, has a high potential for financial inclusion, considering the significant number of Facebook users and the speed and low cost of transferring digital money through their
applications, without other intermediaries.

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Progessive Portugal issues “Panda Bonds” in China

Portugal was the first country in the euro zone to issue public debt in Chinese currency.

In an effort to diversify the ranks of investors and position itself first in the face of Chinese investors, the Treasury and Public Debt Management Agency has issued three-year bonds worth two billion RMB (€ 260 million) and paying an interest rate (coupon) of 4.09%.

Demand surprisingly surpassed the offer by 3.165 times, demonstrating the great potential and interest of the Chinese market.

This transaction allowed Portugal to enter the third largest bond market in the world, making the country known to the Asian market, diversifying the geographical base of investors, financing the Portuguese State and opening a door that could serve as an example for other European debt markets.

This is yet another sign of the confidence that Portugal has placed in China, Chinese investors and the growing good relations maintained by both States. The growth and emergence of new Chinese investment opportunities in Portugal is expected.

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