1. INVESTING IN MEDITERRANEAN REAL ESTATE PORTUGAL 1

2. Why Portugal? Member country of the EU High level of safety High quality infrastructures and good accessibility Cosmopolitan people with gentle attitude towards foreigners Very good food products, excellent wines Varied scenery Temperate climate 2

3. YES, but why investing in property? Property market highly developed and transparent High quality supply in all sectors (retail, offices, residences) Considerable presence of foreign occupiers Strong international contingent of developers and investors No foreign exchange risk vis a vis other European markets Annualised returns 2000/10 only outperformed in Europe by UK Fiscal framewok favourable to investment funds (FIIs) and property investment companies (SIIMOs) Tax benefits for rehabilitation projects Golden residence visa 3

4. Market evolution- Before 2008: Annual market growth of 30% to 150% due to high demand from domestic and foreign investors Annual asset transactions over $1,3 billion Market dominated by retail sector due to excellent performance Prime yields very high on relatively low asset values 4

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6. After 2008: Market progressive slow-down and decrease in value of annual transactions Scarcity of funding for the property sector Increase in industrial and hotel sectors demand Increased matureness and significant resilience of property market with owners reluctant to sell Market still generating better performance than some other European countries Main foreign investors: Germany, UK, Netherlands, USA, France, Spain and Brazil 6

7. Market opportunities- Assets at discount from peak prices Expected increase in distress sales over the next few months in the leisure & tourism sector Growth forecast in tourism of 4% p.a. until 2020 Trophy products in prime locations in great demand Returns in the long/medium term still very competitive 7

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9. Property Investment mostly used vehicles – Commercial companies (Plcs, Llcs ) A- Property Investment Funds (FIIs) B- Property Investment Companies (SIMOs) FIIs and SIMOs under the dual supervision of central bank and securities market authority (CMVM) 9

10. Commercial Companies – Plcs (minimum capital €50.000) Llcs (minimum capital €1) Common with Individual investments/family estates Small/mid size asset portfolios Self management Not subject to regulatory supervision 10

11. Property Investment funds (FIIs): Property investment funds industry in Portugal has currently around €12.3 billion ($16 billion) under management More than 250 investment funds (FIIs) Investment funds may be closed-end, open ended or mixed, depending on whether the number of investment units is variable, fixed or variable and fixed Closed-end funds (privately subscribed) most commonly used Management performed by third parties (property / securities management companies or credit institutions) Minimum €5million ($6,5 million) assets worth within first year 11

12. Property Investment Companies (SIIMOs): Shall take the form of a plc with variable capital (SICAVIs) or with fixed capital (SICAFIs). SICAVIs share capital equivalent at any point in time to net global value of its assets Assets under self-management of shareholders or outside management Minimum share capital €375.000 ($450.000) Minimum assets global net value of €5 million ($6,5 million) 12

13. Tax treatment of property investment funds (FIIs)and property investment companies (SIIMOs) – Open- ended FIIs and SICAVIs and closed end ones with public subscription are exempt from transfer tax (IMT) and stamp tax Closed-end FIIs and SICAVIs whose units are held by qualified investors or financing institutions pay only 50% of IMT and stamp tax. Income tax on net rents 20% (exempt in case of rehabilitated properties) Capital gains tax at the rate of 25% levied on 50% of the adjusted difference between aquisition and transfer values (except in case of rehabilitated properties) Income paid to non-residents not subject to taxation 13

14. General tax treatment of non-residents on property – Transfer tax (IMT) on property purchases at a rate of 6.5% (urban assets) on price value (plus 0.8% stamp tax) Property tax (IMI) annual payment at rates of 0.3%/0.5% on property’s taxable value (may be increased in case of properties left vacant or owned by residents in tax havens) Income tax on property obtained by non residents at a rate of 20% Capital gains tax obtained by non residents on the sale of property in Portugal at a rate 25% levied on the diference between adjusted aquisition value and transfer value 14

15. Tax treatment of rehabilitated properties – Land tax – exempt (for 2 years after conclusion of works or 5 years in case of residential use) Transfer tax – exempt ( if works start within 2 years of purchase) Income tax – 10% on units of property funds and 6% on rents received by residents from rehabilitated properties and exempt in case of property funds and companies (FIIs and SIIMOs) Capital gains tax – 6% and exempt in caseof property funds and companies (FIIs and SIIMOs) 15

16. Golden Residence Permit Foreign nationals from outside EU will be granted a residence permit in case of any of the following investments: Capital transfer of €1 million Creation of t least 30 jobs Purchase of real estate in a minimum value of €500.000 (20.750.000 RUB) Visa is valid for 1 year renewable for sucessive periods of 2 years if investment conditions are maintained After 5 years investor is entitled to a permanent residence permit 16

17. большое спасибо! Thank you for your attention! Speaker: António Alfaia de Carvalho Firm: Carvalho, Matias & Associados Website: www.cmasa.ptwww.cmasa.pt Tel: +351 21 8855440 Fax: +351 21 8855459 E-mail: acarvalho@cmasa.pt 17

18. Disclaimer This presentation was prepared for general guidance only and was not meant to constitute professional advice. Matters in it have been subject to simplifications and, therefore, information contained in here does not replace specific professional advice. No representation or warranty, express or implied, is given as to the accuracy and completeness of the information contained in this presentation and the firm does not accept any liability and disclaims all responsibility for the consequences of anyone acting or refraining to act in reliance on information in here, or for any decision based on it. Carvalho, Matias & Associados, Sociedade de Advogados RL. 18