LATEST NEWS: New Insolvency Law Harmonisation Directive

Directive (EU) 2026/799 on the harmonisation of insolvency law was published on 1 April 2026.

The aim of this directive is to contribute to the smooth functioning of the internal market and the Capital Markets Union and to remove obstacles to the exercise of fundamental freedoms, such as the free movement of capital and freedom of establishment, due to differences between national laws in the field of insolvency.

The significant differences, recognised by Regulation (EU) 2015/848 of the European Parliament and of the Council, between substantive insolvency laws have contributed to increased legal uncertainty and unpredictability regarding the outcome of insolvency proceedings. The wide divergences in the recovery value and the time needed to finalise insolvency proceedings in the European Union have negative repercussions on the predictability of costs for creditors and investors in cross-border situations in the internal market.

The European Parliament believes that differences between Member States' rules reduce the attractiveness of cross-border investments, thus creating obstacles and affecting the cross-border movement of capital within the European Union to and from third countries. Therefore, the harmonisation of certain aspects of insolvency law may require changes to the laws of the Member States.

This Directive promises to improve the efficiency of the functioning of the capital markets, in particular to allow greater access to financing for companies. It therefore considers it necessary to establish minimum requirements in specific areas of insolvency proceedings that have a significant impact on the efficiency and duration of such proceedings, especially in the case of cross-border insolvency proceedings.

In summary, the law establishes the harmonisation of six key issues:

1. paulian impugnation actions (Portuguese law has a resolution regime in favour of the insolvent estate);
2. asset tracing: the aim is to strengthen the instruments for identifying and localising assets, including in a cross-border context;
3. pre-pack proceedings: a process that includes a preparation phase and a liquidation phase and allows the sale of the debtor's company, in whole or in part, as a going concern to the best bidder, within the framework of insolvency proceedings;
4. directors' duties: when the legal person becomes insolvent, it requires its directors to file a petition within a specified period, under penalty of liability for damage caused to creditors (Portuguese law already enshrines the duty to file for insolvency and does so within a shorter period than that set by the new Directive);
5. creditors' committees: intended to strengthen the organised participation of creditors in the process, through minimum rules on constitution, composition and functions;
6. key information sheet: aimed at making the essential elements of national insolvency law accessible, comparable and intelligible to creditors and investors, especially across borders.

On the other hand, the law refrains from directly harmonising simplified winding-up procedures for microenterprises, leaving member states free to legislate on the matter.

The general perspective of the law is therefore one of harmonisation aimed primarily at satisfying the interests of creditors in the context of insolvency, either through the recovery and liquidation of assets in an efficient and timely manner, or through the sale of the debtor's company, in whole or in part, as a going concern.

For Portuguese law, the new Directive is a challenge, due to the potential legislative changes it implies, but also an opportunity to reform CIRE with a broader vision.

Member States have until 22 January 2029 to transpose this Directive.