Venture capital and “business angels”

The activities of 'angel investors'
or 'angels', commonly referred
to in Europe (where they have
been recognised for some time)
as 'business angels', were finally given
their long awaited statutory recognition in
Portugal by Decree-Law n.º 375/2007 of 8
November 2007.

Los Business Angels son
individuos con gran
patrimonio que ofrecen
su capital como
préstamo a fin de
impulsar la creación de
nuevos negocios,
normalmente a cambio
de deuda convertible o
participación económica
en el nuevo grupo o
empresa. Ahora bien,
tal y como explican las
abogadas Teresa
Baptista y Catarina
Silva Gomes, del bufete
Barrocas Sarmento
Neves, sus actividades
tienen reconocimiento
estatutario y están
enmarcadas dentro del
Decreto Ley portugués
375/2007, de 8 de

Los inversores de
capital riesgo deben ser
incorporados como
unipersonales, por
cuota y a través del

unipersonal por
naturaleza, el miembro
es una persona fí­sica;
no obstante, el inversor
de capital riesgo queda
regulado internamente
por los estatutos

The activities of 'angel investors'
or 'angels', commonly referred
to in Europe (where they have
been recognised for some time)
as 'business angels', were finally given
their long awaited statutory recognition in
Portugal by Decree-Law n.º 375/2007 of 8
November 2007.

In short, business angels are affluent
individuals who provide capital and
invest in business start-ups, usually in
exchange for convertible debt or equity
holdings in the company or group. Decree-Law n.º 375/2007, which
revoked Decree-Law n.º 319/2002 of 28
December 2002, was published on 8
November 2007 and regulates the
activities of business angels. It sets out a
framework which governs venture capital
investment activities through venture
capital companies, venture capital funds
and venture capital investors.

The legislation seeks to simplify and
streamline the activities, and thereby
promote an increase in venture capital
activity as a means of supporting startups,
restructuring and entrepreneurial
growth in the scientific and technological
sectors, amongst others.

The above legislation introduces a
number of investor principles which are
new to Portugal, one of which is the
acknowledgement of the existence of
venture capital investors ('VCI’s')
(investidores em capital de risco, or ICR),
or business angels.

Under Portuguese law, VCI's are
typically special venture capital
companies, which must be incorporated
as single-member companies (sociedade
unipessoal por quotas). This obligation
arises out of the need to keep the venture
capital assets separate from the remaining
personal assets of the shareholder, in
order to comply with applicable
transparency requirements. The single
member must be a natural person (i.e. an
individual as opposed to a corporate
entity). A VCI is, like any other company,
regulated internally by its articles of

It is worth noting that, in order to
commence its trading activities, a VCI
need only comply with a single
administrative formality, namely prior
registration with the Portuguese Securities
Market Commission (Comissão do
Mercado dos Valores Mobiliários –
'CMVM'), a quick and simplified
procedure. Furthermore, setting up a VCI
which does not permit the public to
subscribe for its shares and which is held
only by qualified investors or subscribers
in an amount equal to or exceeding
€500,000.00, requires only a
straightforward prior notification to the
Portuguese Securities Market

The CMVM is the entity responsible for
supervising VCI´s and which regulates all
matters relating to their activities.

The main corporate object of a VCI is to
make venture capital investments.

may, while carrying out their activities, do
the following:

• Invest in debt and equity capital
instruments, as well as in securities or
convertible instruments, which are
exchangeable or which grant an option
to purchase;

• Give guarantees for the benefit of the
companies in which they invest;

• Use their surplus cash to invest in
financial instruments such as hedging
instruments, required to pursue their
respective activities.

We would also highlight that VCI´s are
typically investors who invest in start-ups
or new companies, whose financial needs
are often not met by institutional venture

VCI´s also add value to new
ventures in other ways, for example by
contributing their business experience and
business networks, thereby giving a
significant boost to many sectors of the

Finally, we note that VCI´s now benefit
from specific tax incentives and
advantages in Portugal.

Teresa Baptista is a partner and Catarina Silva
Gomes is an associate at Barrocas Sarmento
Neves and can be reached via and

Venture capital and “business angels”


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