Portugal has two time zones and observes daylight saving time. Continental Portugal and Madeira use UTC+00:00, while the Azores use UTC–01:00. Daylight saving time (locally known as Hora de Verão, meaning 'summer time') is observed nationwide from the last Sunday in March to the last Sunday in October, so that every year, continental Portugal and Madeira temporarily use UTC+01:00, and the Azores temporarily use UTC+00:00.
In the early 19th century, Portugal adopted mean solar time. Navy (located in Lisbon) and Coimbra Astronomical Observatories calculated solar time to be used as legal time in their longitude regions. In 1861, the Astronomical Observatory of Lisbon was founded and, in 1878, it was tasked with the exclusive competence of calculate its mean solar time and to transmit it to rest of the country’s public services. Thus, in practice, Portuguese standard time was defined as the mean solar time at Lisbon Observatory longitude, which was later calculated as being GMT–00:36:44.
In 1911, it was agreed that standard time in Portugal should be defined in accordance with the 1884 prime meridian system. By the Decree of 26 May 1911, a reform was approved regarding standard time in Portugal and in its overseas Empire: although almost all continental Portugal is located west of the 7.5°W meridian (i.e. in the theoretical zone of GMT–01:00 time zone), for mainland Portugal it was adopted GMT+00:00 as its time zone. By the same law, GMT–02:00 time zone was adopted for the Azores and Cape Verde, GMT–01:00 for Madeira and Portuguese Guinea, GMT for São Tomé and Príncipe and São João Baptista de Ajudá, GMT+01:00 for Angola, GMT+02:00 for Mozambique, GMT+05:00 for Portuguese India and GMT+08:00 for Macau and Portuguese Timor. These time zones were adopted on 1 January 1912.