Lisbon annual report
Boutique firms have vital role advising clients
investing in highly regulated sectors
With banks having stricter lending requirements, clients need specialist lawyers who advise them on
all stages of a project, including advice on how public bodies will react
Boutique law firms are playing an
increasingly important role in helping
companies invest in heavily regulated
sectors in Portugal, as it is crucial
that clients are informed about all
the possible outcomes of each stage
of a project in order to satisfy the
requirements of lenders, says José Luís
Esquivel, managing partner at Esquivel
Advogados in Lisbon.
“In contrast to a few years ago,
Portuguese banks are now more
conservative, selective and restrictive
[with regard to providing finance]” he
says. “It used to be only necessary to
have a project, but now there is only
money available if you can present
a real project with a guarantee that
profit will come.” Esquivel continues:
“This makes a huge difference when
you’re conducting any kind of business
development or investment. The banks
just aren’t so open to financing projects
with an element of risk.”
Esquivel attributes this new approach
to Portuguese banks’ lack of finance as
well as the fact that ownership of the
country’s banking sector is increasingly
passing into foreign hands. “Not only
are public banks having problems in
terms of their financing capacity and
having to wait for financial help from
the state,” he explains. “But for the
first time in banking history, there are
no private banks in Portugal with real
capacity – we’re now facing the prospect
of them all belonging to foreign banks
outside of Iberia.”
Banks less competitive
As a result, Portuguese banks that
previously would have gone to
corporate clients to show them potential
business opportunities are now passive
as they do not have the money to finance
projects, says Esquivel. “In contrast
to other countries with investments
abroad, Portugal’s banking sector has
currently lost its competitive edge,
which isn’t good as it means we can’t
do business,” he adds. Furthermore,
those local companies that would have
traditionally sought investment from
Portuguese banks are now having to
develop projects that long-term, have an
international and European perspective,
Esquivel says. “Foreign investors
are unlikely to be open to financing
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something local – they will only invest
in Portugal if it’s attractive to their
business,” he explains.
So, with Portuguese banks
becoming ever more risk-averse and
foreign investors mainly seeking out
international opportunities, it is now
crucial for clients that want financial
investment to identify all the various
steps that need to be taken to complete
a project, and all the possible outcomes
that each step may be. “This means
banks want to know everything
before and everything after, so it’s
about knowing the critical elements of
each transaction and all the possible
outcomes,” says Esquivel. He adds that
even when a project is up and running,
companies need to regularly check the
details of any elements that may be in
doubt in order to be prepared in case
something goes wrong. “Imagine if
you are investing in an energy plant
in Portugal, you don’t just want to
know all the regulatory frameworks,”
explains Esquivel, by way of example.
“You want to know what the real critical
steps are, what the conduct of the
public administration will be through
the preparatory phase and then the
execution of the phase – clients need to
think of what comes next at every stage
of the project.”
José Luís Esquivel
Boutiques ‘well placed’
As a firm that advises international and
national clients that want to invest in
regulated sectors – such as transport,
the environment and industry – within
Portugal, Esquivel says its work is
now more focused and intense, as
“companies are hiring us to consider
every part of the transaction and
check everything in greater detail”.
He believes that boutique firms are
well placed to give the level of support
now required, because in order to
give specialist advice and facilitate
the transaction, “you need to have
a full understanding of the business
and how the sector is going to evolve
going forward, and we continually pay
attention”, he says. “At the end of the
day, it is more demanding, but when
clients hire us and then go on to do
the business, they tend to stick with us
so we can give that specialist advice
throughout the life of the project.”
September / October 2016 • IBERIAN LAWYER • 35