The New Portuguese Law on Private Foundations

Abstract

Foundations or similar bodies have existed in Portugal almost since the birth of nationality (in the twelfth century), having their first apogee during the fifteenth and sixteenth centuries and the second in the last quarter of the twentieth century when the majority of the almost 500 foundations operating in Portugal were incorporated. Despite their social impact, they lack public appraisal of their economic and social significance which somehow resonated in the inadequacy of the former legal regime, which was commonly considered as outdated, state driven, and not properly translating neither the foundation’s private nature nor their contribution to the public good. In July 9, 2012, the Portuguese Parliament approved, with minor amendments, the Law 24/2012, which was submitted by the Portuguese Government and comprised both a new framework-law (“lei-quadro”) on foundations and modifications to the chapter on legal persons of the Civil Code, more specifically to the articles relating to private foundations. Considering this reform, which just increased the traditional mistrust towards foundations, this chapter is going to be exclusively or mainly focused on private foundations and how the new Portuguese law affects their formation, governance structure, activities, reporting, and supervision.