The Nomenclature of Territorial Units for Statistics (NUTS) is developed by Eurostat, and employed in Portugal for statistical purposes. The NUTS branch extends from NUTS1, NUTS2 and NUTS3 regions, with the complementary LAU (Local Administrative Units) sub-categorization being used to differentiate the local areas, of trans-national importance.
Developed by Eurostat and implemented in 1998, the Nomenclature of Territorial Units for Statistics (NUTS) regions, which comprises three levels of the Portuguese territory, are instrumental in European Union's Structural Fund delivery mechanisms. The standard was developed by the European Union, and thus only covers the member states, and extensively used by national governments, Eurostat and other EU bodies for statistical and policy matters. Until 4 November 2002, the Sistema Estatístico Nacional (SEN) used a NUTS codification system that was distinct from the Eurostat system. With the enactment of Decree Law 244/2002 (5 November 2002), published in the Diário da República, this system was abandoned in order to harmonize the national system with that of Eurostat.
The NUTS system subdivides the nation into three levels: NUTS I, NUTS II and NUTS III. In some European partners, as is the case with Portugal, a complementary hierarchy, respectively LAU I and LAU II (posteriorly referred to as NUTS IV and NUTS V) is employed. The LAU, or Local Administrative Units, in the Portuguese context pertains to the 308 municipalities (LAU I) and 3092 civil parishes (LAU II) respectively. In the broadest sense, the NUTS hierarchy, while they may follow some of the borders (municipal or parish) diverge in their delineation.
The first and broadest subdivision of Portugal is between mainland Portugal and the two autonomous regions of the Azores and Madeira.
Although the districts are still the most socially relevant subdivision, their function is being phased in favour of locally oriented regional units, and regions are growing in importance. Portugal is divided into five regions, administered by the Commissions for Coordination and Regional Development (Portuguese: Comissões de Cooperação e Desenvolvimento Regional) in mainland Portugal, plus the two autonomous regions that are their own NUTS II regions.