Portugal The 21 st Century Hub for International Investments P - - PowerPoint PPT Presentation

Portugal

“The 21st Century Hub for International Investments”

PORTUGAL: A

GATEWAY TO INVESTMENT AROUND THE WORLD

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More than 600 years doing business and building a

relationship with the World - Africa, Brazil,

Macao, India, Japan, China and East Timor HISTORIC PERSPECTIVE

Historical Portuguese Presence in the world during the Discoveries age

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HISTORIC PERSPECTIVE

Today Portugal has a deep understanding of these countries’ environment in various dimensions:

• Linguistic
• Cultural
• Legal (some of the legal systems
• f these countries are based on

the Portuguese Law)

• Portuguese Speaking Countries

(spread out for nine countries):

A 240 million people Portuguese speaking market

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WHAT IS DIFFERENT

ABOUT PORTUGAL? Type of income Brazil Cape Verde Mozambique Guinea-Bissau Dividends 10/15% 10% 15% 10% Interest 15% 10% 10% 10% Royalties 15% 10% 10% 10%

• Double Tax Treaties (Portuguese Speaking Countries)
• Portugal has already entered into DTT s with Brazil, Cape Verde, Mozambique and Guinea-

Bissau

• However, there are several other DTT s being negotiated (namely the first DTT to be

concluded by Angola) and on the verge of being approved and entering into force. In September 2011, the DTT with East Timor was also negotiated.

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WHAT IS DIFFERENT

ABOUT PORTUGAL?

Portuguese African Countries have competitive measures focused on the attraction of foreign investment:

• New private investment laws
• Establishing relevant tax exemptions

to entities investing in such countries (e.g. Angola and Mozambique)

• Huge potential in different areas of

activity: Energy, Infra-structures, Telecommunications, Real Estate, Tourism and Agriculture

• Strong economic growth expected in the

following years

• Political stability consolidation in course

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WHAT IS DIFFERENT

ABOUT PORTUGAL? Type of income South Africa Algeria India Morocco Tunisia Macao Dividends 10%/15% 10%/15% 10%/15% 10%/15% 15% 10% Interest 15% 15% 10% 12% 15% 10% Royalties 10% 10% 10% 10% 10% 10%

• Double Tax Treaties (other Countries)
• Portugal has also entered into DTT s with South Africa, Algeria, India, Morocco, Tunisia and

Macao

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Type of income IRPJ / CSL (income taxes)

(Brazil)

Another Taxes

(Brazil)

Withholding Tax

(Brazil)

Corporate Income Tax

(Portugal)

Dividends Not subject to corporate income taxation in Brazil. However, dividend payment is not deductible to taxable profit (does not allow tax saving) Not applicable Not applicable 95% of the dividends are not subject to taxation (article 23 (2) of PT- BRA Double Tax Treaty) (effective taxation at a 1,325% rate) Share capital remuneration Borrower may deduct to the taxable profit the interest paid to the shareholders Not applicable 15% withholding tax Interest subject to a 26,5% general CIT rate, with a 15% deduct on account of the withholding taxation which occurred in Brazil (corresponds to an effective CIT rate of 11,5%)

• Focusing on Brazil
• Portugal has entered into a quite advantageous DTT with

Brazil

• Dividends are not subject to taxation in Brazil and the DTT

foresees a competitive rule on double taxation elimination

WHAT IS DIFFERENT

ABOUT PORTUGAL?

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Type of income IRPJ / CSL (income taxes)

(Brazil)

Another Taxes

(Brazil)

Withholding Tax

(Brazil)

Corporate Income Tax

(Portugal)

Interest on shareholders loans Borrower may deduct to the taxable profit the interest paid to the shareholders Not applicable 15% withholding tax Interest subject to a 26,5% general CIT rate, with a 15% deduct on account of the withholding taxation which occurred in Brazil (corresponds to an effective CIT rate

• f 11,5%)

Royalties The Brazilian entity may deduct to the taxable profit the royalties paid to the shareholders CIDE: 10% rate PIS: 1,65% rate COFINS: 7,6% rate (liability of the Brazilian entity) 15% withholding tax (to which will accrue ISS with a rate between 2% and 5%) Royalties subject to a 26,5% general CIT rate, with a 15% deduct on account of the withholding taxation which occurred in Brazil (corresponds to an effective CIT rate

• f 11,5%)
• Focusing on Brazil
• CIT rates in Portugal are lower and Portuguese entities are

entitled to a tax credit correspondent to the tax paid in Brazil

WHAT IS DIFFERENT

ABOUT PORTUGAL?

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WHAT IS DIFFERENT

ABOUT PORTUGAL? Brazil Cape Verde Mozambique Guinea- Bissau Angola São Tome and Principe East Timor DTT    

• Negotiated

Social Security  

• Economic

Cooperation





• 
• Turism



• 

 

• Industry



 

• 
• Reciprocal

Investment Protection



     

• Other treaties with Brazil and African Countries
• Portugal also has agreements with these countries on other

matters

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WHAT IS DIFFERENT

ABOUT PORTUGAL?

• Dividends distributed by Portuguese Speaking African

Countries

• Dividend distributions made by PSAC are exempted of

Corporate Income Tax

Angola

(no DTT)

Mozambique (DTT)

• Portuguese entity and Angolan entity must be subject to

corporate income tax

• Portuguese entity must held a minimum of 25% of the

Angolan entity share capital for at least 2 years

• Dividends are exempted from Portuguese Tax
• Portuguese entity and Mozambican entity must be subject to

corporate income tax

• Portuguese entity must held a minimum of 25% of the

Mozambican entity share capital for at least 2 years

• Dividends are exempted from Portuguese Tax

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WHAT IS DIFFERENT

ABOUT PORTUGAL?

• Portuguese holding companies tax regime
• Examples on dividend distribution from Brazil, Angola and

Mozambique:

Brazil (DTT) Angola

(no DTT)

Mozambique (DTT)

• Participation of at least 10%
• No withholding tax in Brazil
• 95% of the dividends are not subject to

taxation (DTT)

• SGPS exempted from capital gains

in Portugal

• Participation of at least 25%
• Participation hold for at least 2 years
• SGPS exempted from capital gains

in Portugal

• Participation of at least 25%
• Participation hold for at least 2 years
• SGPS exempted from capital gains

in Portugal

Hold Co Hold Co Hold Co

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WHAT IS DIFFERENT

ABOUT PORTUGAL?

• Madeira s International Business Center
• Entities licensed in Madeira are entitled to benefit from EU Directives and Regulations and

DTT s entered into by Portugal

• Qualified income of entities licensed to carry out an industrial, commercial or shipping

activity and other services shall be liable to CIT at a 4% rate until December 31st, 2011 and 5% thereafter, until December 31st, 2020

• Entities who intend to benefit from this regime is required to create jobs (subject to certain

plafonds) and to invest in fixed assets

• No Municipal surcharge applicable

Ideal for trading activities: low direct and indirect taxation, state-of-the-art infrastructure, efficient local support services, low operational costs, safety and quality

• f life.

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WHAT IS DIFFERENT

ABOUT PORTUGAL?

• Individuals – Non-habitual resident tax regime
• Applicable for ten years to individuals who are likely to establish a permanent or a temporary

residence in Portugal

• Flat income tax rate of 20% for some Portuguese source employment income and a tax

exemption for almost all foreign source income

• Nonresident individuals are eligible to benefit from this regime if

(i) Became resident, for tax purposes in the Portuguese territory (ii) Were not taxed under the rules of the PIT Code as residents for tax purposes in Portugal for the previous five years, and (iii) Develop high added value activities of a scientific, artistic or technical nature (e.g. engineers, computer technology and data processing activities, news service activities, scientific investigation activities and company’s top executive employees)

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PORTUGAL: THE 21ST

CENTURY HUB FOR INTERNATIONAL INVESTMENTS

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Through VdAtlas, our international platform for the provision of legal services, we support our clients abroad We are already present in Angola and Mozambique in association with local firms combining their local capabilities with VdA’s

know-how to provide clients with legal services of a very high

standard In Brazil, we have been working for more than 30 years with our Best

Best Friends in relevant investment transactions and providing legal

advice to European companies investing in the Brazilian market. Now, we partner with our Brazilian colleagues advising Brazilian companies in their investments in Europe, Africa, Asia and other

Portuguese speaking countries

Mozambique Angola

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CONTACTS Tiago Marreiros Moreira Tax Partner and Partner in charge of VdAtlas Vieira de Almeida & Associados, Sociedade de Advogados, R.L. E-mail: tm@vda.pt T: + 351 213 11 485 Avenida Duarte Pacheco, n.º 26 1070-110 Lisboa Portugal

A RIGHT TO EXCELLENCE O DIREITO

À EXCELÊNCIA

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