In case a company closes down, either fully or partially, due to a shutdown order by the authorities, or faces a drop of more than 40% of the revenue, or needs to suspend, fully or partially, its activities due to the Covid-19, then it can opt for a simplified lay off. In the simplified lay off, the employees have 2/3 of their salaries covered, 30% by the company and 70% by Social Security. In addition, during lay-off, companies are exempted to pay the employer´s share of social security taxes.

• The employers which benefited from the Financial Support, regarding the employees and members of the corporate bodies; covered by the simplified layoff;
• The independent workers that are eligible for the Financial Support and their respective spousal, even though it does not exempt them from filing their quarterly declaration;

Quarentine Subsidy
The quarantine is treated in the same terms as disease by the Social Security. The amount of the subsidy is 100% of the compensation. Waiting period (10 days) does not apply.

Extraordinary support to the family and to support reduction of business
For independent workers who have paid contributions to the social security for 3 consecutive months in the last 12 months and can´t resume its activity, there are two supports available:

Support to the family in the amount of 1/3 of the monthly compensation for the 2020 quarter, up to the amount of 2,5 “IAS” (€ 1.097,02) and a minimum of 1 IAS (€ 438,81);

Extraordinary support for the reduction of business, which lasts for a month and it is renewable up to six months; the support is capped at 1 IAS (€ 438,81) and will be paid from the month following the request; The supports are not cumulative and contributions to the social security are still due but the independent workers may defer its payment.

Companies, including single proprietary companies, that comply with the defined requirements, can benefit from the following measures:

• • Financial institutions cannot terminate the revolving facilities nor the loans granted until March 28^th, 2020 while these measures are applicable;
  • Deferral of the ongoing financings as of March 28^th, 2020, with principal payment in the end of the contract, for a period at least equal of the measure;
  • Suspension, between March 28^th and September 30^th of 2020, of the payment of principal, rents and interest with cut off time until September 30^th, 2020 for the loans that allow for a principal partial repayment or other cash payments in instalments. The payment dates for the principal, rents, interest, commissions and other expenses are automatically delayed for a period equal to the suspension.

In case of commercial establishments or service providers whose activity has been suspended or restricted by the state of emergency, the following protective rules may apply:

• The closing of those establishments and the non-payment of rents during the state of emergency cannot be invoked as a reason for the termination of the non-residential lease nor for eviction;
• The tenants may defer the payment of rents due during the state of emergency and in the month immediately after and only pay within 12 (twelve months) after the end of that period in instalments on a monthly base, never lower than 1/12 of the total amount in debt, to be paid with the regular rent of the relevant month;
• No penalty, default interest or indemnity for deferring the payment according to the conditions mentioned above may be imposed.

The commercial establishments that were not covered by the restrictive measures of the state of emergency but have nonetheless closed, will need to invoke the general rules of law, to claim for rent suspension or reduction.

In relation to lease agreements or real estate issues, are also suspended (i) all types of eviction procedures when it may cause the tenant to lose his/her residential home; (ii) the production of effects of any termination or nonrenewal notices of lease agreements, residential or not, made by the landlord, unless in case of acceptance from the tenant and (iii) mortgage´s execution over the property which is the home of the executed.

Renegotiation implies an agreement between both parties, but it has the advantage of avoiding the need to resource to the court. This should be the main mechanism to be used by the parties.

It is commonly deemed that there is no fault of the party for the non-fulfilment of its obligations, in case of a force majeure.

Force majeure applies to cases when performance of the obligations by the parties is impossible, so the duties will be legally extinguished without creating any duty to pay damages for the non-performance.

Pandemics, like Covid-19, have been considered force majeure cases by the Portuguese courts.

Therefore, the companies who have had the performance of their obligations made impossible as a direct and necessary consequence of Covd-19, must inform the counterparty and explain why it is impossible to perform their obligations under the agreement.

The Credit Line “Capitalizar 2018- Covid-19”, in a total amount of € 400M (four hundred million euros) is already available and is allocated as follows:

Working Capital: € 320M (three hundred and twenty million euros), to fund companies’ needs of working capital;

Cash Flow Plafond: € 80M (eighty million euros), to fund cash flows needs.

Each company may be granted up to € 3M (three million euros), € 1.5 (one and a half million euros) for each line (working capital and cash flow).

This credit line is in the global amount of € 60M (sixty million euros) and is available for micro tourism companies to cover their working capital and cash flow needs. The amounts are made available by Turismo de Portugal as follows: up to € 750 (seven hundred and fifty euros) per month per employee and for a three-months term up to the global amount of € 20,000 (twenty thousand euros) per company.

Who is eligible?

• A micro company with less than 10 employees and with a balance sheet lower than € 2M (two million Euros);
• Has an electronic certificate issued by IAPMEI
• Carries out tourism activity in Portugal.

Cada empresa poderá receber um montante máximo de financiamento de 3 milhões de euros, 1,5 milhões de euros por cada linha, nas finalidades de fundo de maneio e tesouraria.

Specific Line Covid-19 for restaurants and similar business: € 600M (six hundred million euros);
Specific Line Covid-19 for travel agencies, touristic animation companies, and organization of events business and similar: € 200M (two hundred million euros);
Specific Line Covid-19 for tourism companies, including tourist accommodations, tourist projects and similar)- € 900M (nine hundred million euros);
Specific Line Covid-19 for industry companies: € 1.300M (one billion and three hundred million euros)

The loans may have a maturity of up to 4 years and a grace period of 1 year for the payment of the principal and interest. These loans will be made by banks.

• Special Payment on behalf of Corporate Income Tax “Pagamento especial por conta”: (March 31st) until June 30th, 2020;
• Form Model 22 (May 31st): until July 31st, 2020;
• First Payment on behalf of Corporate Income Tax and Additional Payment on behalf of State Surtax “Primeiro Pagamento por Conta e Primeiro Pagamento Adicional por Conta” (July 31st) Until August 31st.

Option to pay: (i) payment within the usual deadlines, (ii) payment in three monthly instalments; (iii) payment in six monthly instalments, in both (ii) and (ii) without the need to provide collateral or interest.

The option to pay in instalments is applicable to VAT and personal and corporate income taxes withheld and are to be delivered to the Portuguese tax authorities in the second quarter of 2020.

Employers: social security contributions due by employers by reference to March, April and May can be paid in instalments, with no need to submit a request or payment of interest, as follows:

• 1/3 in the due date
• 2/3 in equal instalments in July, August and September or from July to December. The application for each of these payment schedules must be filed with social security in July.

Self-employed: they are eligible regarding the months of April, May and June of 2020 on the same terms as above.