Portugal has been developing and implementing a consistent and structured approach to investment in innovation and entrepreneurship, taking into account the positive impact that innovative services and products have in promoting social and economic progress and the transition to a sustainable economy. In this context, the creation of conditions for Portugal to lead the regulation of emerging technologies (autonomous vehicles and artificial intelligence) was foreseen, allowing the hosting of national and international projects for the development of products related to emerging technologies.

Given the rapid pace of technological development, the pursuit of this goal is only possible by testing and experimenting with new technologies, their applications and the business models to be adopted. Experimentation - especially in a real environment - therefore plays a central role in the research, development and implementation of innovative services and products. It is therefore essential to create a legal and regulatory framework that promotes and facilitates the testing of innovative technologies, services, products and processes. Such a legal framework will contribute to the acceleration of research, demonstration and testing processes and, consequently, the country's competitiveness and attractiveness for foreign investment in research and innovation projects, as well as the transition of new products and services to the market and their appropriate regulation. It is in this context that several countries have advanced with the creation of "regulatory sandboxes", "innovation spaces", "experimentation spaces", "living labs", among others.

In this context, the Council of Ministers Resolution no. 29/2020, of April 21^st, which establishes the general principles for the creation and regulation of the TFZs. Decree-Law No. 67/2021 of July 30_th establishes the basic legal framework for the constitution of TFZs in Portugal, as established in the aforementioned Resolution of the Council of Ministers. The decree-law does not create the TFZs as of now, but determines the conditions for their creation to set up several TFZs in Portugal, each one of them specially geared towards certain technologies or sectors and which thus contribute to the dynamisation of the regions of Portugal by leveraging their specific characteristics.

The process of creating a Technology Free Zone is permanently open and can be initiated:

• Through an Expression of Interest;
• Without an Expression of Interest (directly, by submitting an application)

The submission of the Expression of Interest is neither compulsory nor binding on the process of creating a particular TFZ. It aims to ensure a moment to sound out the innovation potential and public interest of a proposal to create a Technology Free Zone, by the Testing Authority and Regulatory Entities.

• Regulation of Technology Free Zones
• Application and Evaluation Guide

What is the Test Authority and what does it do?

• The Test Authority is responsible for coordinating and managing the Technological Free Zones (ZLTs) network;
• The Test Authority is responsible for approving the establishment of new ZLTs, as well as their regulations, and for supporting, supervising and auditing innovation programmes' tests;
• It is also in charge of receiving requests for legislative or regulatory revision.

What are Regulatory Entities?

• Regulatory entity of the Sector where the ZLT is located;
• It has the power to legislate, regulate and supervise the areas or sectors;
• It is required to issue opinions regarding the creation of ZLTs, supporting the Test Authority in its duties, as well as collaborate with the managing entity on innovation programmes.

Who are the Promoters?

• Public or private entities that carry out experimentation tests and activities under the innovation programmes;
• 'Promoter' is defined rather broadly in order to allow any person, natural or legal, public or private, regardless of their legal nature, to request testing in ZLTs.

Who are the Participants?

• Entities or persons collaborating or participating in the testing;
• Any entity with legal nature that collaborates with the promoter, with the need to obtain consent from the participants.

What is a regulatory sandbox?

• It is a regulatory regime that allows the testing of innovative technologies, products, services and processes, through the establishment of a set of derogations or modifications to the applicable regulatory framework, always safeguarding fundamental rights and interests such as health, physical integrity, safety of people and goods or environmental protection.

• Resolution of the Council of Ministers No. 29/2020 - General principles for the creation and regulation of Technological Free Zones
• Decree-Law No. 67/2021 - Scheme and governance model for the promotion of technology-based innovation through the creation of Technological Free Zones