AutorFranco Caiado Guerreiro & Associados
Cargo do AutorSociedade de advogados

Page 3

With this document Franco Caiado Guerreiro & Associados wishes to offer its friends and clients an objective set of key guidelines for investing in Portugal.

Our intention is to provide brief but systematic information on how to invest in Portugal from a corporate, tax and labor law point of view.

The information provided in this document obviously does not free the investor from the need to take further specific legal advice.

Please feel free to contact us in case you need any further information concerning this subject.

Lisbon, September 1, 2007

João Caiado Guerreiro

Managing Partner Page 4

1.1. Take a quick look at Portugal

Official Name - Portuguese Republic

Founding of the Portuguese State - 1143

Founding of the Republic - 1910

Political System - Parliamentary Democracy

Language - Portuguese

Constitutional System - A Republic ruled by a Constitution.

The President is the head of State and the Government is headed by a Prime Minister. The unicameral Parliament (Assembleia da República) comprises 230 elected Members. The President is directly elected every five years and Members of Parliament every four years.

Political Parties represented in Parliament - Social Democratic Party (Partido Social Democrata), Socialist Party (Partido Socialista), Popular Party (Partido Popular), Communist Party (Partido Comunista), Left Block (Bloco de Esquerda) and Ecologist Party, The Greens (Partido Ecologista, Os Verdes).

Territorial Organization - 18 districts in the Continent and two Autonomous regions (Azores and Madeira islands).

Capital - Lisbon (Lisboa)

Area - 92.142 km2

Population - 10.5 million

Working population - 5.5 million

Currency - Euro (divided into 100 cents)

Language - Portuguese is the third most widely spoken European language in the world and is mother tongue to about 200 million people. Page 5

Countries in which Portuguese is the official language: Angola, Cape Verde, Guinea-Bissau, Mozambique, S. Tome and Principe in Africa, Brazil in South America and East Timor in Asia. There are also Portuguese-speaking communities in other countries: important communities of recent immigrants in Europe (France, Luxembourg and Germany), the Americas (United States, Canada and Venezuela), Africa (South Africa) and Australia, as well as small groups of people in former colonies such as Goa and Macau.

In Portugal, most people in business circles speak at least one foreign language, typically, English, Spanish and French.

International Relations

United Nations - since 1945 (founding member)

NATO - since 1949 (founding member)

Council of Europe - since 1976

European Union - since 1986

Community of Portuguese Speaking Countries - since 1996 (founding member).

Portugal has established diplomatic relations with over 180 countries.

Economic Overview

Economic Environment

Portugal has strong economic fundamentals: GDP convergence with the EU average, a remarkable decrease in inflation, unemployment consistently lower than the EU average and sound public accounts. Page 6

Remarkable Convergence

According to the OECD, next to Ireland, Portugal was the country with the highest GDP growth rates in Europe over the last forty years.

Annual percentage changes 2004 2005 2006 2007* 2008*
GDP growth 1.3 0.5 1.3 1.5 1.7
Private Consumption 2.3 1.7 1.2 1.5 1.7
Government Expenditure 1.6 1.9 -0.2 0.0 0.3
Gross Fixed Capital

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