PORTUGAL Law and Practice Contributed by: João Nóbrega, Bernardo Marques and Francisco Miguel Gomes, EY Law – Sociedade de Advogados, SP, S.A.
Credit AIFs Credit AIFs are the only category expressly author - ised to originate loans. They may lend exclusively to corporate borrowers and are prohibited from granting credit to (i) natural persons, (ii) credit institutions, (iii) unitholders of the AIF, (iv) the AIFM or any entity within its group, (v) the depositary or its group, and (vi) other collective investment undertakings. These funds must adhere to borrower and sector concentration limits (no more than 20% of total assets per borrower or group after 12 months) and an overall leverage cap of 60% of total assets. AIFMs managing loan-originating funds must comply with disclosure obligations similar to those imposed on financial intermediaries, providing borrowers with clear information regarding risks, costs and condi - tions. They are also entitled to access the Central Credit Register maintained by the Bank of Portugal to monitor exposures. Other AIFs The “other AIF” category offers broad flexibility, allowing exposure to both financial and non-financial assets. In principle, these funds may extend financing or acquire loans, provided that such activities align with their stated investment policy and risk manage - ment framework, and do not violate prudential restric - tions applicable to their management company. 2.6 Non-Traditional Assets Under Portuguese law, AIFs may in principle invest across a wide range of financial and non-financial assets, provided that the selected assets meet the eligibility and prudential requirements applicable to their category and align with the fund’s investment policy. The only significant exception is real estate AIFs, which are restricted to investing solely in real estate assets or shares of qualifying real estate com - panies. Digital Assets Portugal has no specific regime governing AIF invest - ment in crypto-assets or other digital assets. However, “other AIFs” may invest directly in such assets, pro - vided that:
• Private Equity and Credit AIFs: These AIFs are fully exempt from corporate income tax (CIT) on income of any nature, including interest, dividends, capital gains and other investment returns. As a result, they operate as tax-neutral vehicles, with taxation deferred to investors at distribution or redemption. • Real Estate and Other AIFs: Real estate AIFs and “other AIFs” are formally subject to CIT but enjoy a broad exclusion from taxable income covering (i) capital income, (ii) rental income and (iii) capi - tal gains, together with related expenses. These entities are also exempt from municipal and state surtaxes. In practice, this framework ensures that most income earned by real estate or mixed-asset AIFs remains outside the scope of taxation at fund level, maintain - ing near tax neutrality. Only income not qualifying for exclusion – such as non-core or ancillary income – remains taxable at the general CIT rate of 20% (in force since 2025). 2.5 Loan Origination Under Portuguese law, an AIF’s ability to grant loans is contingent upon its statutory type. The regime dif - ferentiates between (i) the origination of loans in the strict sense and (ii) shareholder loans or quasi-equity financing provided to portfolio companies. Real Estate AIFs Real estate AIFs are restricted to investing in real estate assets, shares in qualifying real estate com - panies, and units in other real estate AIFs. Loan origi - nation is not included in their statutory investment scope, and they are not permitted to extend credit or Private equity AIFs may invest in equity, hybrid or debt instruments of portfolio companies with high growth potential. The law explicitly permits them to provide shareholder loans or similar financing to companies in which they hold, or intend to acquire, an equity stake. Such lending must be ancillary to and consistent with the fund’s equity investment strategy. shareholder loans as a regular activity. Private Equity/Venture Capital AIFs
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