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In an open economy model, it is more important than ever to know what the legal risks are and how to minimise and overcome them. The better you know, the better you perform. In this article, we will summarise a clear and updated understanding of law and practice regarding guarantees.

Guarantees and securities
As a general rule, the debtor is liable in respect of his obligations. This rule affects all the debtor's assets, including future ones. The breach of an obligation, such as a payment, means that the debtor is liable to pay compensation.

Personal guarantees
By the contract, the parties may request additional guarantees besides existing assets to ensure the fulfilment of the obligation. One of these guarantees is "fiança." By entering into this kind of guarantee, a guarantor undertakes to pay on behalf of a third party in the event of this party not complying with the obligation of paying. The obligation depends on a principal debt and cannot exist without a valid principal obligation.

Like the other guarantees, the mortgage is designed to protect a creditor in the event of debtor's default. In this case, the creditor can recover payment from the judicial sale of the property. A mortgage aims to secure a defined sum of money that has to be clearly stated in the deed or contract. A mortgage is created by means of a deed made by a notary or contract before the land registry is duly registered.

The granting of certain securities will ensure that payment of a debt will be made by selling some specific assets of the debtor. Under Portuguese law, a pledge (penhor) may be created over cash or fungible securities. There are two types of pledge, civil and commercial. A commercial pledge is a pledge between entities or individuals subject to the regulations of the Commercial Code. These will be individuals with the capacity to carry out commercial acts and other entities that engage in commercial activities. In general, the requirements for a civil pledge are somewhat stricter than those for a commercial pledge. A civil or commercial pledge may be used depending on the status of the parties. In practice, a civil pledge is more likely to be used.

Bank guarantee
A bank guarantee is a guarantee from a lending institution ensuring that the liabilities of a debtor will be met. A first demand bank guarantee: is issued by a guarantor (a bank) on behalf of the applicant, assuming his responsibility to pay to the beneficiary under a complying demand; represents an independent and irrevocable payment undertaking; and is separate from the underlying contract obligations and thus opposed to the concept of a contract guarantee mentioned above. As there is no direct regulation in Portuguese law regarding bank guaranties, the "law" is what parties have agreed on. Accordingly, it is always advised to pay special attention to the agreement submitted by banks to the parties.

Other securities 
Generally, it is possible to secure an obligation, e.g. an obligation of payment, by cash deposits, securities, precious stones or metals, pledge, mortgage, or bank guarantee. This security works well, especially with cash deposits. However, it is difficult to obtain from a debtor. For amounts over €5,000, a bank guaranty is more commonly used than a "caução."



To make your registration in Portugal, you only have to apply for a Certificate of Registration of Citizen. The Certificate of Registration of Citizen of the European Union must be requested by any citizen of the European Union, Iceland, Liechtenstein, Norway, Andorra and Switzerland, wishing to remain in Portugal for a period exceeding three months. The request can be made to the City Hall, in person by completing a statement and delivering the necessary documents. The application can also be made by a lawyer, as long as he has the necessary powers to act on your behalf.


The price of the square meter in the country was valued at 1,141 euros, the highest value since May 2011. The banking valuation of houses has increased for seven consecutive months. The price at which banks evaluate households when granting housing loans doesn't stop rising. The trend of this indicator accompanies the upward trend in house prices in Portugal. According to the official data, the average value of the bank evaluation of the homes in October was 1,141 euros per square meter. This figure corresponds to an increase of six euros compared to the value registered in the previous month and is also the highest level since May 2011.


Golden Visa is a type of residence permit that allows entry and stay in Portuguese territory without the need for a residence visa. Foreign citizens, who intend to invest in Portugal or carry out an investment activity (personally or through a company incorporated in Portugal), can apply for Golden Visa. As for investment, can be made in any of the following possibilities: Capital transfer in the amount of 1 million euros or more; The creation of at least 10 jobs (no minimum investment amount is required), in any business area; The acquisition of real estate with a value equal to or greater than 500,000 euros; Acquisition of real estate, whose construction has been completed at least 30 years ago or located in an urban rehabilitation area and carrying out a renovation in the total amount equal to or greater than 350,000 euros; Capital transfer in the amount equal to or greater than 350,000 euros, which is applied in research activities carried out by public or private scientific resear


The most common debt collecting legal proceedings applicable in Portugal are as follows: Ordinary proceeding The ordinary proceedings in the first instance can be divided into declarative proceedings and enforcement proceedings. In a declarative proceeding, the court decides on the merit of the litigation between the parties. In an enforcement proceeding, the court enforces a judgment or an enforceable title such as a cheque. Declarative proceeding  After a claim is submitted to the court, it is served to the defendant. The service is generally carried out by registered mail. When it is shown to be impossible to serve the complaint via registered mail, the service is instead made through direct contact. The defendant then has 30 days to present his reply, where he can defend himself by alleging procedural objections, arguing that facts are not true, or stating other facts. The defendant may also file a counterclaim. However, it must be connected with the main claim or with the def


The enforcement proceeding (debt recovery through the courts) has been considered one of the major problems in Portuguese justice and also one of the barriers to the development of the Portuguese economy. In 2013 the cases for legal collection amounted EUR 5.6 billion, regarding 201,000 enforcement proceedings lodged in the courts. Between January and April 9 this year, 38,924 cases were filed, valued at EUR. 1.6 billion. Portuguese courts have pending something like EUR 7.2 billion to collect, which corresponds to 4.3% of GDP.