This content is from: Local Insights

Portuguese investment funds in corporate form

Mafalda Monteiro

Following recent turbulence in global financial markets and the current liquidity crisis in the domestic financial system, the Portuguese Government is paying special attention to the development of money-saving mechanisms. One of the most important mechanisms among them are investment funds, which have always been seen as a privileged instrument to attract savings at a national level.

Unlike what has happened in most EU member states for many years, until last June, Portuguese investment funds could only be incorporated into a contractual form (Ucits). By means of Decree-Law 71/2010, of June 18 2010, the Portuguese Government amended the existing regime to allow the incorporation of collective investment methods into a corporate form, such as the Securities Investment Companies and the Real Estate Investment Companies.

With these measures, the Government expects to create economic opportunities for the national investment funds industry, similar to those available in almost all EU countries and, consequently, drive the competition among Portuguese financial players.

This new decree-law will enable investors to take advantage of the benefits that only a corporate structure can provide, including the participation in shareholder's meetings and a greater involvement of investors in decision-making processes within Investment Companies. This is of a particular relevance to investors who, due to contractual form requirements, cannot do business as Ucits management companies.

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