PORTUGAL Law and Practice Contributed by: Miguel Durham Agrellos, Paulo da Rocha Pichel and Ricardo Pereira Amaro, Durham Agrellos
ing regime to bank accounts containing more than EUR50,000 held by Portuguese tax residents. In 2020, Portugal took several measures to transpose Council Directive (EU) 2018/822 of 25 May 2018, oth - erwise known as DAC 6. Domestic legislation establishes a mechanism for the exchange of information not only in the context of cross-border tax-planning arrangements (as imposed by the Directive) but has also extended this burden to internal arrangements. Generic and specific hallmarks (some of which are linked to the main benefit test) are identified in the Portuguese legislation, which enable the identification of cross-border arrangements sub - ject to reporting requirements. Finally, with regard to privacy concerns, it should be noted that Regulation (EU) 2016/679, of 27 April (“General Data Protection Regulation” or GDPR) is directly applicable in Portugal and lays down the rules and principles governing the processing of personal data. All Portuguese public entities are bound by the GDPR. These data protection concerns prompted the recent amendment of the rules governing access to the central register of beneficial owners: the register is no longer accessible to the general public, and access is now conditional upon the demonstration of a legiti - mate interest. 2. Succession 2.1 Cultural Considerations in Succession Planning Although each family has its own characteristics, some trends are still recognisable in the Portuguese market. • Resistance to succession – in a significant number of family-owned businesses, the founder is still a member of the board and demands to take part in the current decision-making process; some resist - ance to innovation or alternative financing sources may, consequently, be identified. • First real generation crisis – a significant number of family-owned businesses in Portugal were founded in the 1980s; thus, families are now facing the chal -
lenge of turning over the firm to the third genera - tion. • Lack of succession planning – although there has been a shift in recent years, a significant number of families still do not invest in preparation for the succession process. • Informality – most families do not constitute family councils or family business agreements to dis - cuss the management of the family businesses or assets; although this is beginning to change, there is still a certain degree of informality that threat - ens the stability and rationality of decision-making processes. 2.2 International Planning The transnational dimension of succession planning implies additional concerns regarding the applicable laws, the coherence of the succession process and the tax implications in the different jurisdictions. International succession planning is simultaneously a challenge and an opportunity to choose the applicable law in accordance with the best interests of the testa - tor. Determining the applicable law (when possible) is therefore an important part of the succession planning process. As different jurisdictions may be involved, avoiding clashes is of the utmost importance, particularly in ensuring the smooth transition of the assets. If pos - sible, submitting the regulation of the succession to the same jurisdiction is preferable. That goal may jus - tify the modification of the assets’ detention struc - ture or its location. Other areas of law should also be considered in this context, particularly family law and company law. Regarding tax concerns, see 1. Tax . 2.3 Forced Heirship Laws Descendants and spouses (notwithstanding the mari - tal property regime) and – in the absence of descend - ants – ascendants, are forced heirs. The percentage of the value of the assets they are entitled to varies between one third and two thirds. Nevertheless, since August 2018, it has been pos - sible for spouses to enter into a prenuptial agreement
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