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Good asset management is essential to ensure a link between investors looking for a profitable investment and the financial needs of the real economy. If a fund has shown a stable high return for several years, this indicates the high professionalism of its managers.

If you consider establishing a pooled fund in Portugal, we recommend reading this material.

This can be a corporate investment fund or mutual investment fund carrying out activities related to the pooling (attraction) of investors' funds in order to obtain profit from their investment in chain securities of other issuers, corporate rights and property.

One can set up a fund in Portugal using one of the following structures:

  1. A unit structure without legal personality under the management of a separately hired manager;
  2. UCI, with legal personality. UCI registration in Portugal requires SEC approval. If the fund is self-governing, then the required minimum initial capital must be at least 300,000 euros. Management can be performed by a third party. Then the capital requirements are higher - at least 50,000 euros.

Portugal has a special regime applicable to entities that plan to establish a Portuguese fund investing in equity instruments for a limited period of time. This regime also covers the UCI and other similar structures.

Those planning to obtain a Portuguese pooled fund manager's license should familiarize themselves with the main legislation that regulates this area of ​​activity. These include:

  • Law on Collective Investment.
  • Portugal Securities Code.

Both legal entities and individuals are allowed to invest in shares of a Portugese pooled fund without any restrictions.

Key requirements to this kind of funds:

  • must be managed by an authorized manager;
  • must have a board of directors;
  • must have an audit group. 

All members of the board and audit group must be pre-approved by the financial regulator.

Obtaining a pooled fund manager license in Portugal 

This requires implementing policies aimed at addressing issues such as:

  • managed assets assessment; 
  • risk management and reducing;
  • AML;
  • election of members of the board and the audit group.

An investor can obtain information from open sources about the number of shares owned by the respective investor and additional data on the financial position. An investor should also review non-financial information that could impact a fund's return, such as the state of the economy, the quality of the funds's management, etc.

The Portugese fund must regularly disclose:

  1. Annual reporting.
  2. Accounts for a period of 2 years.
  3. Results of checking the fund's portfolio of assets.

Lisbon is the first destination for real estate investment. If you are planning to start investing in Portugal, please note that the income tax exemption may apply to non-retail funds, which mainly operate in the real estate market. Foreign investors who mainly invest in property can count on a reduced income tax rate. 

Expert consultation

Portugal has gained a reputation of one the most attractive EU countries for foreign investment providing a high standard of investment protection. However, the unexpected COVID-19 outbreak has caused major shockwaves across the globe and Portugal is not immune. Its recent performance, resilience and attractiveness are also being put to the test for adaptivity to the new reality. 

Before establishing a Portuguese non-retail fund, you can contact the experts at IQ Decision UK and request advice on investment regulation in Portugal.