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Open a Fund in Portugal

Open a Fund in Portugal

Retail funds can be established in Portugal, concerning the applicable laws and EU directives. UCITS are Undertakings for Collective Investment in Transferable Shares that can be easily established, a matter where our company formation specialists in Portugal can provide support and guidance. The same team can offer assistance for opening all sorts of entities, among which are limited liability companies in Portugal, joint venture companies, and sole proprietorships.

What types of investment funds are available in Portugal?

As mentioned above, UCITS are among the funds that can be established in Portugal and are meant for the investments of capital gained from the public. AIFs or Alternative Investment Funds can be opened in Portugal, and are publicly issued real estate investments, in respect with the EU Directive 2011/61. Open-ended and close-ended retail funds are also types of investment funds that can be in the attention of a domestic or foreign entrepreneur.

Details about open-ended retail funds

Open-ended retail funds are available in Portugal and can be created with the support of financial services groups registered in the country. The following information explains how open-ended retail funds work:

  • open-ended funds are useful investment tools that work with customers’ savings;
  • many financial institutions in Portugal deal with open-ended investment funds;
  • the Portuguese Fund Managers Association oversees the activities of funds established in this country;
  • one must have a management company when opening an open-ended fund in Portugal.

If you would like to open a fund in Portugal or if you are interested in company formation in Portugal, you can talk to one of our company formation representatives in Portugal.

Closed-ended retail funds in Portugal

Compared to open-ended retail fundsopen-ended funds are not that chosen by investors because the first ones can be easily transferred. According to recent statistics, this is why the market for closed-ended retail funds is smaller. However, if you are interested in such funds, feel free to ask for the support of our consultants.

Rules for establishing funds in Portugal

The regulatory framework for funds in Portugal is straightforward and based on the directives established by important authorities and bodies in the EU. The Portuguese Security Code which entered into force in 2000, alongside the Undertakings of Collective Investment Law, plus specific EU regulations are among the laws controlling the funds available in Portugal. The Securities Market Commission or CMVM in Portugal is the main regulatory body of retail funds in this country. This institution authorizes and supervises the funds in Portugal. Above all, the National Bank of Portugal oversees the activities of all financial institutions in this country.

What are the necessary documents for opening a fund in Portugal?

KIID is the Key Investor Information Document that must be drafted for opening a fund in Portugal. Also, the prospectus of the fund must comprise complete information about the fund regulation. These documents, alongside papers proving the approval of the activities of the fund by the parties involved, must be drafted for the authorization of CMVM. It is important to know that it takes around 20 days until the authorization is confirmed, however, there won’t be an announcement made in this sense, if the fund is accepted. In the case of a refusal from the CMVM, investors have the possibility of making a new application and revising the documents.

Can funds be marketed in Portugal?

Yes, funds can be promoted via local newspapers, on media channels, and the internet with the help of specialized websites, but not limited to these. Opening a fund in Portugal might seem complicated. Still, the support of our company formation agents in Portugal can prove necessary and mandatory because you can skip potential errors at the time of registration.

What are Golden Visa funds in Portugal?

Under the Portuguese Law, the innovation, capitalization, and development of Portugal can be made through the Golden Visa Funds. Here is how it works:

  • The Golden Visa Funds must be maintained in Portugal for at least 5 years.
  • Around 60% of the investment value must be directed to the companies established in Portugal.
  • Funds covering real estate assets are not accepted.
  • The Portuguese Capital Markets Board is the authority that manages the Golden Visa Funds.
  • Together with the investments made through Golden Visa Funds, a temporary residence permit can be issued in Portugal. The condition is that these investment funds must be maintained for at least 5 years.
  • Those who open Golden Visa Funds in Portugal can manage the portfolio on their own, with the help of a single-shareholder LLC registered in this territory.

We recommend those interested in such an investment fund, as well as those who want to open a company in Portugal, to collaborate with one of our specialists. Company incorporation in Portugal is a relatively simple process and can be free of complexities if you benefit from specialized help in this direction.

Conditions for retail fund managers in Portugal

The legislation regarding investment funds in Portugal implies a fairly clear condition. The domicile of these funds must coincide with the registered office of the management company in charge. It can also be said that this fund is supervised and managed locally, with the intervention of a foreign administrator being prohibited.

Regarding foreign funds registered in Portugal, like non-UCITS funds, there are no restrictions regarding the manager or administrator of such funds. In addition, Portuguese Law offers the same protection as for local investment fund managers. As set out below, only certain types of entities can manage funds in Portugal.

Rules and protection for a portfolio of assets in Portugal

The Portuguese Law through its provisions also specifies the rules for retail funds and respective assets. For example, assets of such funds should be assigned in a single depositary, like a financial institution, specifying that this depositary must have funds of at least EUR 7.5 million and preferably located in Portugal. Here are other requirements in this case:

  • It must be ensured that the respective fund has its entity and distinct management.
  • The depositary, respectively financial institution in charge of the fund must act independently and take into account the interests and objectives of the investors of that fund.
  • The investors of the fund in question must be assured that the investment policies are respected and that the law is respected regarding the calculation method of the value of the units.

In matters of investments in Portugal, foreigners have numerous opportunities in most of the fields and can pay attention to a few facts and statistics in this direction:

  • Economic activity indicator for Q4 of 2023 registered a growth of more than 6%.
  • The retail sales sector in Portugal experienced an increase of approximately 2.3% in the same period of 2023.
  • Inflation in December 2023 decreased by approximately 1.4% in Portugal.
  • An increase of over 12% was recorded in terms of new properties, in Portugal, in Q3 of 2023.

Besides support for setting up a company in Portugal or an investment fund, you can benefit from other services too. For instance, you can collaborate with one of our accountants in Portugal and enjoy a personalized offer for your business. If you are an investor interested in opening a fund in Portugal, we recommend you contact our company formation specialists in Portugal.