PORTUGAL Law and Practice Contributed by: Pedro Cassiano Santos, Francisca César Machado, Chen Chen and Natalia Fedorova, VdA
2. Authorisation 2.1 Licences and Application Process Authorisation and Activities Authorisation to initiate banking activities in Portugal can be obtained through a request to incorporate a credit institution or a financing company, both defined in the Legal Framework of Credit Institutions and Financial Companies. Credit institutions cover several types of entities, the main type being banks. In Portugal, banks enjoy universal banking licence and are entitled to carry out operations such as: (i) acceptance of deposits or other repayable funds; (ii) credit operations, including the granting of guarantees and other commitments, financial leasing, and factoring; (iii) payment services; (iv) transactions, on their own account or on behalf of clients, involving money market and foreign exchange market instruments, financial futures instru - ments, options, and operations on currencies, interest rates, commodities, and securities; (v) advisory services, custody, administration, and management of securities portfolios; (vi) man - agement and consultancy in the management of other assets; and (vii) provision of investment services and activities, among others. Only credit institutions are allowed to receive deposits or other repayable funds from the pub - lic for use on their own account. Licence Process In Portugal, the process for obtaining a banking licence involves three key stages: (i) securing authorisation (which includes submission of the application along with supporting documenta - tion, evaluation of the application, and the final decision on authorisation); (ii) completing special registration with the Banco de Portugal; and (iii) initiating operations.
The process to set up a credit institution formal - ly starts with the submission of the respective application, either in Portuguese or in English, physically or via e-mail, to Banco de Portugal. No fee is due to the Banco de Portugal during this process. Following receipt of the application, Banco de Portugal, together with the ECB, reviews the information submitted to ensure that it is com - plete and sufficient for a comprehensive evalu - ation. The purpose of this review is to determine whether the proposed project fulfils all the condi - tions required by applicable legislation. A final decision (granting or refusing the authori - sation) is issued within six months from Banco de Portugal receiving a complete application or the additional information that may be request - ed, or within a maximum of 12 months of the initial application submission. The absence of notification of a decision by Banco de Portugal represents a tacit refusal of the application. The granting of authorisation enables the appli - cant to set up a credit institution, which must start its activities within 12 months of the approval decision (otherwise, the authorisation expires), without prejudice of a one-time exten - sion for another 12 months, as provided. To commence banking activities, the credit insti - tution must also have completed a special reg - istration with Banco de Portugal. Common Ancillary Activities and Additional Requirements It is typical for Portuguese credit institutions to carry out investment services and activities, including, among other ancillary services: (i) reception and transmission of orders on behalf of others; (ii) execution of orders on behalf of
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