PORTUGAL LAW AND PRACTICE Contributed by: João Gonçalo Galvão, Carolina Cardoso Alves and Miguel Paquete, CS’Associados
an injunction in the administrative courts against the municipality. 4.6 Agreements With Local or Governmental Authorities From a planning and zoning perspective, the developer may enter into planning agreements with the municipality for drafting, review and amendment of a specific municipal plan. In addition, the municipal plan may also contem - plate the transfer of development rights whereby a specific allowed construction level may be transferred to another property or plot. Finally, the municipal plan – typically through a planning and operation unit or, specifically, in the urbanisation or detailed plans – may establish an execution system whereby, within the framework of an urbanisation agreement entered into by and between the municipality and the developer, the general rights and duties to be complied with by each party are established. 4.7 Enforcement of Restrictions on Development and Designated Use The restrictions on developments and desig - nated use are enforced, firstly, in the stage of consultation of external entities within a licens - ing procedure, considering that these entities will be competent to issue an opinion, a deci - sion on an authorisation or an approval (eg, an environmental impact assessment declaration or a binding opinion for works carried out in a clas - sified building). In a later stage, such as during or after the exe - cution of the works, the municipality is entitled to apply any necessary measures or correction orders such as the embargo of works, their mod - ification or their demolition. If the developer does not comply with the aforementioned measures
or orders, the municipality may enforce them by administrative takeover of the property and by coercively carrying out the necessary measures or orders, charging to the developer all expenses arising therefrom. 5. Investment Vehicles 5.1 Types of Entities Available to Investors to Hold Real Estate Assets The most common entities to hold real estate assets are: • Private limited liability companies (Lda.): Typi - cally used for small to medium-sized invest - ments, offering limited liability and a stream - lined management structure. • Public limited liability companies (S.A.): Used for larger investments or public listing, facili - tating capital raising but requiring more com - plex governance and regulatory compliance. • Real estate investment funds/companies: These entities pool capital to invest in real estate, providing passive investment oppor - tunities with shared risks and returns. Funds can be closed or open-ended, offering liquid - ity and diversification, while companies are often used by institutional investors for large projects. • Real estate investment and management companies (SIGIs): See 5.3 REITs . 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity • Lda.: These are simple to set up, with a mini - mum of one investor and low administrative costs. Subject to a corporate income tax (CIT) rate of 16% for income up to EUR50,000 and 20% if higher. • S.A.: These have a more complex governance structure and regulatory obligations, with a
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